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Mumbai. January 9th, 2022
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, has released the 4th edition of Railway Freight Activity Optimism Index (RFAOI), in collaboration with Jupiter Group, a premier manufacturer of railway wagons, passenger coaches, wagon components and castings.
The RFAOI survey of rail freight users (industry and service providers) gauges optimism levels for rail freight activity in the forthcoming quarter. The index comprises of 14 factors across four sub-indices of optimism – supply factors, operational efficiency, investment, and demand.
Railway Freight Activity Optimism Index, indicating optimism level of users; industries and logistic service providers towards transporting goods using railways, stands at 68 for Q4 2022, only one percentage point higher than Q3 2022.
The highest level of optimism is towards loading and unloading of goods (optimism index of 76). Businesses in the eastern region are the most optimistic with an overall optimism index of 77 in Q4, while optimism level fell for business in the southern region and western region.
Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet said: “Optimism levels for railway freight activity continues to improve in Q4 2022, although the pace has slowed down as businesses have become more cautious towards international trade. The survey also reveals optimism for domestic trade in Q4 2022 has remained unchanged from the previous quarter, reflecting resilient domestic demand.
The findings of the survey also mirror weak global demand, as several major economies face the risk of recession; which, in turn, is impacting emerging and developing markets. The fall in optimism levels for utilization of wagons/containers from the previous quarter also indicates freight activity could remain lower as compared to the levels witnessed during the earlier part of the year.
Given the current developments in the domestic and global economy, we expect the optimism level to remain subdued going ahead. The severity of recession and consequent reaction from central banks will have impact on global trade, thereby further impacting domestic freight movement.”
Vivek Lohia, Director, Jupiter Wagons said: “It is encouraging to gauge from the survey that businesses are optimistic about the investment activity in the railway sector. Optimism for investment activity in Q4 2022 is the highest amongst the four sub-indices, increasing from Q2 2022 by four points to 71. This bodes well not only for the sectors associated with Railways, but it also indicates a shift of freight from roads to rail, fall in logistics costs and, importantly, reduction in greenhouse gas emissions (GHG). In turn, this will make Indian firms more competitive.
The loan approved from the World Bank to modernize rail freight and logistics infrastructure, and the government’s own thrust in capital expenditure will further improve performance of railways. These will strengthen India’s multimodal transport hubs and terminals and will help in achieving first and last mile connectivity for which the increase in optimism was highest in Q4 2022, besides frequency of rakes on existing/new routes.
Going ahead, we expect the government to continue to place its thrust and increase its capital allocation for railways in the Union Budget for 2023-24.”
Key findings of the four sub-indices of RFAOI
Optimism around demand
Optimism around factors of supply
Optimism around operational efficiency
Optimism around investment activity
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