As sales move increasingly online, e-commerce has boomed globally. Shipping goods has become more complex, as more items must be individually delivered to consumers’ homes, compared with bulk delivery to a store. In New York City, for example, the average number of daily deliveries to households tripled to more than 1.1 million shipments from 2009 to 2017.
Online retail is expected to reach $4 trillion worldwide in 2020. Handling such large volumes of shipments through city roads will considerably strain road networks, further reducing space for passenger vehicle movement and potentially causing supply chain disruptions. This is over and above the impact on climate emissions and air pollution, as e-retail has a higher carbon footprint in comparison to other retail distribution models. Additionally, rerouting and delays in shipments mean losses that can impact the local and national economy.
Transitioning freight away from overtaxed road networks, especially in heavily congested and polluted places like India’s cities, is an enticing solution. Trucks and light commercial vehicles constitute half of the 22.5 million registered vehicles in the country. Rail, which transports 1.2 billion tonnes across the country annually, has historically been used primarily for commodities such as coal, fertilizer and iron ore.
Exploring new ways to use India’s extensive rail network for household goods could be a cost-effective and energy-efficient way to improve not only delivery service levels but the economics of the entire service chain. It could also mean fewer vehicles on roads, which is key to a building a sustainable and safe freight sector and thereby sustainable and safe cities.
Nationwide Supply Chains, Local Impact
In Mumbai, rail has the potential to become as integral to the city’s freight network as it has been for passenger transport (the suburban rail system alone serves 7.5 million riders a day). More than 6.4 million tonnes of cargo come through the financial capital of India’s two major ports. This translates to an average of 700 trucks that can carry 25 tonnes each on city roads daily. Establishing a system for more efficient disbursement of this cargo across the country is essential to reducing local impacts on traffic and air pollution too.
Though the rail system transports around 16.6 million tonnes of bulk cargo, it is yet to expand its reach in non-bulk consignments, such as e-commerce parcels, which urban distribution systems require. A transport company in Mumbai, which moves around 30,000 tonnes of goods annually between Mumbai and Delhi, estimated it takes 120 hours for a parcel in Mumbai to reach the capital by road. If dispatched by train, it would take only 24 hours.
Rail freight moved 0.4 million tonnes of parcels out of Mumbai in 2019-20, up from 0.36 million tonnes in 2017-18, removing the equivalent of 110 trucks (10 tonnes each) from Mumbai roads every day. To cover 1,400 km between Mumbai and Delhi, a medium-duty freight vehicle weighing less than 12 tonnes will emit 830 of kg CO2 while a vehicle heavier than 12 tonnes will emit 1,033 kg of CO2. Removing 110 trucks from the roads saved 91,300 kg of CO2 releasing into the atmosphere, as well as made space available for passenger vehicles, pedestrians and non-motorized transport.
The rail system holds additional untapped potential to reduce CO2 emissions and toxic air pollution in the freight sector. Currently, Indian Railways has electrified nearly 40,000 kms of routes, roughly 58% of total route kms, and plans to electrify all routes by 2024. Indian Railways is also looking to improve the energy efficiency of locomotives, train carriages and associated fixed installations through green-certified technologies and switching to renewable sources of energy to achieve net-zero carbon emissions.
Switching Systems to Non-Bulk Disbursement
The railway system in Mumbai already has a widespread network in the regional conurbation with seven lines and more than 140 stations. What’s required is a concerted effort to leverage this network and build mid- and last-mile logistics for non-bulk freight.
E-commerce warehouses located in Mumbai’s peripheral areas, such as Bhiwandi, Taloja and Kalyan, could be starting points for distribution into the city and its suburbs. Next would be dedicated spaces at passenger stations for transferring goods.
Mumbai’s Central Railways division (CR) has taken steps to help enable this transition by working with e-commerce companies like Amazon. According to conversations with Amazon and railway staff, the retailer may carry as little as 2% of its cargo volume by rail in India, but is looking to raise that number to 20% over the next few years.
Before the COVID-19 pandemic and continuing throughout it, CR initiated a pilot project with Amazon to carry parcels in the luggage compartments of suburban trains between Kalyan and Mumbai’s main Chhatrapati Shivaji Maharaj Terminus during non-peak hours. This reduced freight transit time from three hours on average to little more than one hour, according to CR. Pick-up and delivery kiosks were also established at stations in Thane, Chhatrapati Shivaji Maharaj Terminus, Kalyan and Dadar. With the suburban network in Mumbai spread widely over the metropolitan area, the kiosks are convenient pick-up locations for e-retail customers during their daily commutes – even with restricted commuting after lockdowns. On average, about 100 deliveries are done through these kiosks daily, saving at least 200 vehicle km. They also reduce the rate of last-mile delivery failures, parcel theft and overall logistics cost.
More recently, CR started a parcel freight train from Bhiwandi, a major warehouse hub. Within the first 10 days, around 800 tonnes were dispatched into the city, removing approximately 80 trucks from the roads in the Thane-Bhiwandi-Kalyan area. To facilitate integration with last-mile logistics, CR also allocated space for parking, loading of delivery vehicles and space for stacking and sorting near railway stations.
In a step towards further facilitating the integration of last-mile services, CR has invited “out agencies” or third-party agency offices to book freight delivery services. These agencies allow for a generally unorganized logistics ecosystem to align with the new rail freight services, integrating an assortment of last-mile delivery modes, like hand carts, three-wheeled light vehicles and two wheelers. Additionally, the railways are looking to enable other alternative, more energy-efficient distribution fleets, as was done in the Hamburg UPS pilot, where large delivery vehicles were replaced with a smaller, city-friendly electric fleet, including e-bikes.
Getting on Track
Railways need to broaden their horizons into parcel freight, not just for business but also for the positive impact it will have on reducing traffic congestion, improving road safety and eliminating toxic air pollution.
A stronger last-mile distribution network, by integrating existing modes and introducing new lower-carbon electric vehicles, can help decarbonize other portions of the distribution chain. Urban distribution centers can be established on vacant land near railway stations and last-mile delivery systems can be set up in many existing stations. These innovations will help in transshipment, sorting, and will reduce the vehicle kilometers traveled in urban freight networks.
Urban freight plays an invisible but integral part in helping consumers get their goods on time, and railways can become an important part of this ecosystem to facilitate urban logistics in an efficient, sustainable and safe manner.
Robin Kalia, IRTS, is a civil servant with the Government of India and is currently posted in Mumbai. His views are personal.
Sudeept Maiti is a Senior Manager with WRI India Ross Center for Sustainable Cities.