One of the most important aspects of business is to transport goods from one place to another. There are various methods to transport goods such as by rail, by road by air, and by sea. Usually, businesses use air and sea modes of transportation when they transport goods out of the country. Within India, the most common ways are to transport goods by train or by road. Each of these modes has its advantages and disadvantages. We shall see them in brief when we compare the methods of truck vs train to transport goods.
Advantages when you transport goods by train
There are many advantages when you transport goods by train in India. Let us look at them in brief.
Dependable: Rail goods transport is always dependable because it is not very affected by the vagaries of weather such as rain, fog, or snow. The goods are in the custody of the railways and hence, chances of pilferage are also low.
Quick: When you compare rail vs road transport in India, you find transporting goods by rail is definitely quicker. Trains move for longer distances at higher speed. Hence, the rail transport is the most favoured method when you have to transport goods to faraway destinations.
Organized service: Compared to any other internal transport in India, rail transport is the most organized. They have fixed routes and manageable schedules. The trains usually run on time. Hence, many businesses prefer to transport goods by train in India.
Capable of carrying heavy loads: Transporting heavy equipment by train is definitely easier than doing it by road. The railway engines are capable of hauling heavy loads from one part of the country to another. In addition, one can add more coaches to the train in case of heavier demand. Therefore they can carry larger loads.
Safe: Safety of the goods is of prime importance. Trains are less prone to suffer from accidents and breakdowns. Hence, you get an element of safety when you transport goods by train.
Economical: The overhead expenses in case of train travel are minimal. This translates into cheaper rates on rail goods transport. Rail transport does not include much labour costs. In fact, these rail freight trains have a couple of drivers and a guard.
Advantages when you transport goods by road:
Let us look at the advantages when you transport goods by road in India.
Door-to-door service: This is the biggest advantage when you transport goods by road. Businesses can transport goods from warehouses to warehouses directly when they use road transport.
Less investment: Individual trucks cost less as compared to investment in railways.
Flexibility: Trains run on fixed schedules. Trucks do not. You have the advantage of changing the routes and timings as per your convenience.
Best for shorter distances: When you transport goods over a shorter distance, it is always better to prefer road transport. Goods reach faster when they travel for shorter distances.
Savings in packing goods: You can transport goods with minimum packing when you use road transport. Some goods can be transported without packaging as well. This is not possible in rail goods transport. You can supervise the loading and unloading of goods. Hence, it is easy to ensure the safety of goods like glass and crockery.
Feeder to other modes: Road transport can go to every nook and corner of the country. Hence, the trucks can act as feeders to other modes of transport such as rail, air, or sea.
A broad comparison of rail vs road transport in India
There is a monopoly of the Indian Railways when you transport goods by rail. You cannot bargain for better rates. This is not the case when you use the roads for transporting your goods. The heavy competition ensures that you can bargain for better rates.
The onus of delivering and collecting the goods from the railway yards rests with you. When you use roadways to transport goods, you get door-to-door delivery.
Since trains carry more loads at a time, they are comparatively cheaper as compared to road transport. This benefits the poorer section of the society.
The roads have a larger reach when compared to railways. Roads can go deep into the rural as well as inhospitable areas. Trains do not.
When you compare rail freight vs road freight India, railways had the benefit in the pre-GST regime. They are beneficial in the post GST scenario as well. This was because there was an abatement of 70% in service tax when you transport goods by train in India. When you transport goods by road, service tax abatement was not available.
Under the GST regime, transporting goods by train attracts GST @ 5%. In addition, input tax credit is also available. When you transport goods by road, GST is 5% but you do not get the benefit of Input Tax Credit on transportation through Goods Transporting Agencies. The soon to be launched E-Way Bill also specifies road transport taxes.
Transporting goods by rail has environmental benefits because this mode of transport does not cause air pollution. Road transport leaves behind its carbon footprint.
Traffic jams can cause a delay in delivery of goods by road. While railways also face delays, these delays are resolved in a certain timeframe.
Rail transport is better when you consider the pilferage aspect. The chances of burglary on the roads are always higher. Similarly, roads are more prone to accidents as compared to the rail transport.
The insurance aspect – Goods in transit insurance explained
When you transport goods by rail, road, air, or sea, there is always a danger of damage to the goods, theft, and so on. This is why it is imperative to have a ‘goods in transit’ insurance policy in force whenever you transport goods.
There are two types of transit insurance. One is the cargo insurance taken out by the owner of the goods. This protects him from pilferage and damage to the goods while in transit. The transport operator takes out a ‘civil liability insurance’ policy to protect him when he is called upon to pay for the damage or loss to the goods he is transporting.
Taking these insurance policies when you transport goods is advisable.
Now that you have learnt that there are both advantages and disadvantages of roadways and railways mode of transportation and both are the safest mode of transport in India, you can choose wisely. However, you need to know that GST is levied on transport of goods in India.
When you compare rail vs road transport in India, statistics point out that road transport is preferable by businesses for obvious reasons. In case the shipment is for longer distances, rail goods transport is always preferred over road transport. Hence, you have healthy competition in the transport sector.