Indian businesses highly optimistic about transporting freight via rail in Q1 2022 compared to last year

2024-04-19 01:50:34 Government

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Mumbai March 29, 2022: Dun & Bradstreet, a leading global provider of business decisioning data and analytics, has released its inaugural all-India survey, 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 was conducted to measure the optimism levels of rail freight users (industry players and logistics service providers), to assess whether rail freight activity in India is expected to improve, remain steady or decline. The index is composed of 14 sub-parameters across four sub-indices - optimism around supply chain, operational efficiency, investment and demand.

Key findings
The Railway Freight Activity Optimism Index (RFAOI) for Q1 2022 stands at 60. The optimism index for demand was the lowest of the four sub-indices, siting at just five points above the neutral index point of 50. This can be attributed to the expected slowdown in economic activity and international supply chain challenges weighing upon the sentiment of companies importing goods.

The survey further highlights that businesses in the western region are the most optimistic regarding rail freight activity for Q1 2022, and that small businesses have indicated greater optimism (60) than the medium sized businesses (57). Large businesses are more optimistic about domestic activities, whereas medium sized companies are the least optimistic about domestic activities.

Avinash Gupta, Managing Director & CEO - India, Dun & Bradstreet said: ?Freight activity is expected to increase over the coming years, as India steps up to achieve its goal of becoming a US$5 trillion economy. To cater to the growing demand for freight, the shift in the modal share of transport from roads to railways has become more critical than ever.?
Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet said: ?The Railway Freight Activity Optimism Index (RFAOI) is unique as it aims to capture the optimism level of rail freight users, and will serve as important input in supply chain planning for service providers, supply side industries and government.?
Vivek Lohia, Director, Jupiter Wagons said: ?When we track the role of railways from the logistics supply side, it is pertinent to understand the pulse of the market, measuring the optimism levels of railway freight users about using railways to transport freight, and how various developments are facilitating the shift from roadways to railways.?

Key findings of the four sub-indices of RFAOI

Optimism around factors of supply
Companies are more optimistic about the supply chain scenario in terms of availability of wagons, labour and connectivity, with the optimism for factors of supply at 63
Optimism amongst businesses about availability of wagons (64) and connectivity (64) i.e., frequency of availability of rakes on existing and new routes, has upped the optimism for supply

Optimism around operational efficiency
The optimism index for operational efficiency stands at 61
The optimism level with respect to loading and unloading of goods in Q1 2022 is the highest of the sub-indices, at 65

Optimism around investment activity
The optimism index for investment activity stood at 60
User industries and service providers have indicated conditions for loading and unloading of wagons are expected to improve both in terms of investment and also with respect to operational efficiency as highlighted in the previous section

Optimism around demand
The optimism for demand sub-index was the lowest of the four sub-indices. The index is only five percentage points above the neutral level of 50
The survey shows that rail transport demand for import freight would remain weak in Q1 2022, and is the lowest optimism level of all the indices
Domestic trade is expected to gain more traction compared to external trade in Q1 2022

About the Index

Dun & Bradstreet conducted a pan India survey of more than 300 Large, Medium, Small, and Micro players to create the RFAOI index. This is a unique, forward looking index, capturing the optimism of user industries and logistics service providers on Rail Freight Activity for the forthcoming quarter. The index is composed of four sub-indices viz Optimism for Freight Demand, Optimism for Supply Factors, Optimism for Operational Efficiency and Optimism towards Investment Activity. Each of the sub-indices constitute of four parameters each, except for investment. There are a total of 14 parameters.

About Dun & Bradstreet:

Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet?s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.
Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions in domains of finance, risk, compliance, information technology and marketing. Working towards Government of India?s vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make In India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity.