Page 189 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes variable cost per ton-mile, and electrification offers potential for more reductions. New labour
agreements have reduced workforce requirements, further decreasing variable costs.
Railways are composed of a traced path on which the vehicles are bound to run. Historically,
railways had accounted for the largest percentage of freight cargo in most of the countries. The
major advantage of railways is to efficiently transport large quantities of goods over long
distances. Given the high fixed cost and low variable cost of operation, the tariff of railways is
low, which encourages large shipments over a longer distance. That is why the bulk shipment of
products like fertilizer, cement, food grains, petroleum products, etc. are normally through
railways from the production plant to the bulk/central warehouses.

Railways have an average level of physical constrains linked to the types of locomotives and
affected by the gradient. Heavy industries are traditionally linked with rail transport systems.
Containerization has improved the flexibility of rail transportation by linking it with road and
maritime modes. Rising competition with other modes of transport have forced the railways
system over the world to be more competitive in its services, viz. speed, handling, freight and
improvement of overall efficiency.
Freight is one of the principal determinants of choice of the modes of transportation. The
Principle of freight fixation is generally the same the world over. Transportation is a field of a
number of national and international activities from village to district towns, from district
towns to state and provincial towns, from state towns to national towns and from national
towns to international towns. The means of transportation in above exercise vary from pedestrian
traffic to animal-drawn transport and finally to jumbo jet aircraft. In between these two extreme
modes of transport intermediaries such as cycles, rickshaws, auto rickshaws, scooters and motor
cycles, cars, jeeps, buses and rails finally leading to international travels by air or sea. The
transport industry, which undertakes nothing more than mere movement of persons and things
from one place to another has, constitutes one of the most important activities of men in every
stage of advanced civilisation. The whole structure of industry and commerce rests on well-laid
foundation of transport. No region or country can ever flourish if it lacks adequate transport
facilities.

Amongst the different modes of transport, railways take the uppermost place on account of the
fact that in India it carries the largest bulk (90% of passenger and goods traffic). The outlay on
railways during the first five-year plan was `423 crore. During the 2nd and 3rd plans the outlay
was `1044 crore and `1686 crore respectively. The fourth and fifth five year plans provided for
expenditures of `1575 crore and ` 2350 crore respectively. These amounts are quite substantial
and form bulk of the plan outlays on transport.
Railways have brought about many political, social and economic changes in the life of Indian
people:
1. Railways have united the people of different castes, religious customs and traditions.
2. Mobility of people has increased, thereby the congested areas can be relieved by congestion
and sparsely populated areas can be developed.
3. Mobility of labour has contributed to industrial development.
4. Speedy distribution of finished product is achieved through railways.

5. Railways provide employment to millions of people.
6. The role of railways during emergencies in mobilising troops and war equipment has
been very significant.

7. Railways have helped in the mass migration of the population.
8. Railways helped in cost saving in transportation of long haul bulk traffic.

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