Supply chain disrupted: Steel industry faces acute shortage of railway rakes
Officials from Tata Steel and Jindal Steel and Power confirmed that the sector was indeed facing a shortage of railway rakes.
Published: 31st December 2021 12:19 PM | Last Updated: 31st December 2021 12:19 PM | A+A A-
NEW DELHI: The steel sector is facing acute shortage of railway rakes for transportation of steel within the country. The shortage is felt mostly in the eastern part of the country, where most steel plants are located.
Industry sources told TNIE that the problem persists for the last four weeks without any respite. The industry insiders say that the shortage of railway rakes is as high as 70%.
“Supply chain has been disrupted. The freight cost through trucks is increasing. The steel prices are also shooting up due to shortage of steel in different regions,” an official from a steel manufacturer told TNIE.
Representatives of the steel industry recently raised the issue with additional secretary, ministry of steel, Rasika Chaube, who assured the industry that the government would take up the issue with Indian Railways.
Officials from Tata Steel and Jindal Steel and Power (JSPL) confirmed that the sector was indeed facing a shortage of railway rakes.
Managing director of JSPL VR Sharma told TNIE that steel production is increasing continuously but the railways’ capacity to handle that cargo is not increasing at the same pace.
According to Sharma, this year the production of steel is likely to go up by 15 million tonnes, and with each million tonne increase in production an additional 3 million tonne cargo of raw material is also needed to be handled.
He also said that in 2020-21, 40% of the production was exported but this year it has come down to 25%. So, the steel is being consumed internally.
“In case of exports, the transportation is point-to-point — from steel plants to ports. But in case of domestic consumption, steel goes to different parts of the country through trains,” he said.
An official from Tata Steel told TNIE that railway rakes were diverted for transportation of coal to power plants, and this led to shortage of railway rakes for steel. TNIE could not get any official response from Indian railways despite reaching out to them.