Rail-Sea-Rail (RSR) Mode Coal Movement Doubles

03 Mar 2025 CW Team

Over the past few years, the Ministry of Coal, in collaboration with Indian Railways, has made substantial progress in expanding the RSR network for coal evacuation. The results have been remarkable: coal transportation via RSR mode, which stood at 28 million tonnes (MT) in FY22, has nearly doubled to 54 MT in FY24. This upward trajectory underscores the growing efficiency and effectiveness of this transport model in India's coal supply chain.

To further incentivise coal movement via the RSR mode, Indian Railways has announced a key policy update in February 2025. The notification introduces a telescopic benefit in freight rates for coal transported to power houses from coal mines owned by Coal India Limited (CIL) and its subsidiaries. This policy change is expected to drive further growth in RSR coal movement, making coal logistics more cost-effective and competitive.

Currently, the transportation of domestic coal via RSR mode follows a two-leg rail system. The first leg involves moving coal from the mines to an unloading port, followed by a second leg where the coal is reloaded at another port and transported to power plants. Until now, both rail legs were charged independently, leading to higher transportation costs. However, the newly introduced telescopic benefit will allow for consolidated freight calculations, significantly reducing the overall cost of coal transportation.

By lowering rail freight charges, this policy will encourage greater adoption of RSR mode, easing the burden on railway networks and promoting coastal shipping as a viable logistics solution. The integration of coastal shipping into coal supply chains aligns with India’s broader objective of enhancing multimodal connectivity and reducing transportation emissions.

Market Outlook: Strengthening Coal Logistics for Energy Security As India continues its push for energy security, efficient coal transportation remains a critical focus area. The expansion of RSR mode is expected to play a vital role in meeting the rising energy demands of the nation. With coal remaining a dominant source of power generation, improving logistics through cost-effective and sustainable modes like RSR is imperative.

Additionally, the Indian logistics sector is undergoing a transformation, with an increasing emphasis on multimodal connectivity, automation, and digital tracking of shipments. The government's commitment to enhancing port infrastructure, coupled with policy support such as the telescopic freight benefit, will further accelerate the adoption of RSR mode. As the coal sector embraces these logistical advancements, India's overall supply chain efficiency is poised for significant improvement in the years to come.

The Ministry of Coal has been steadfast in promoting the Rail-Sea-Rail (RSR) mode of coal transportation, a multi-modal logistics system that integrates rail and coastal shipping to enhance efficiency. This strategic initiative is designed to streamline coal movement from mines to ports and, ultimately, to power plants, ensuring seamless delivery while reducing congestion on the all-rail route (ARR). Furthermore, the RSR mode offers a more sustainable alternative, significantly lowering the carbon footprint associated with coal transportation. Over the past few years, the Ministry of Coal, in collaboration with Indian Railways, has made substantial progress in expanding the RSR network for coal evacuation. The results have been remarkable: coal transportation via RSR mode, which stood at 28 million tonnes (MT) in FY22, has nearly doubled to 54 MT in FY24. This upward trajectory underscores the growing efficiency and effectiveness of this transport model in India's coal supply chain. To further incentivise coal movement via the RSR mode, Indian Railways has announced a key policy update in February 2025. The notification introduces a telescopic benefit in freight rates for coal transported to power houses from coal mines owned by Coal India Limited (CIL) and its subsidiaries. This policy change is expected to drive further growth in RSR coal movement, making coal logistics more cost-effective and competitive. Currently, the transportation of domestic coal via RSR mode follows a two-leg rail system. The first leg involves moving coal from the mines to an unloading port, followed by a second leg where the coal is reloaded at another port and transported to power plants. Until now, both rail legs were charged independently, leading to higher transportation costs. However, the newly introduced telescopic benefit will allow for consolidated freight calculations, significantly reducing the overall cost of coal transportation. By lowering rail freight charges, this policy will encourage greater adoption of RSR mode, easing the burden on railway networks and promoting coastal shipping as a viable logistics solution. The integration of coastal shipping into coal supply chains aligns with India’s broader objective of enhancing multimodal connectivity and reducing transportation emissions. Market Outlook: Strengthening Coal Logistics for Energy Security As India continues its push for energy security, efficient coal transportation remains a critical focus area. The expansion of RSR mode is expected to play a vital role in meeting the rising energy demands of the nation. With coal remaining a dominant source of power generation, improving logistics through cost-effective and sustainable modes like RSR is imperative. Additionally, the Indian logistics sector is undergoing a transformation, with an increasing emphasis on multimodal connectivity, automation, and digital tracking of shipments. The government's commitment to enhancing port infrastructure, coupled with policy support such as the telescopic freight benefit, will further accelerate the adoption of RSR mode. As the coal sector embraces these logistical advancements, India's overall supply chain efficiency is poised for significant improvement in the years to come.

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