A recent government study shows that heavy duty trailers offer the lowest logistics cost in India at Rs 1.51 per tonne per km (PTPK). The advantage comes from economies of scale and efficient first- and last-mile connectivity, giving road transport a strong edge over railways for shorter distances.
The study, Assessment of Logistics Cost in India by DPIIT, found that rail transport averages Rs 1.96 per tonne-km. Rail becomes cost-effective only when shipments cover long distances without factoring in first- and last-mile handling. Multimodal transport adds terminal-handling and trans-shipment costs, making short-haul shipments more expensive.
For axle weights above 55 tonnes, road transport often remains cheaper than rail, even over longer distances. The study identified a break-even point around 600 km, beyond which multimodal transport becomes economical. This point can shift to 1,000 km if first- and last-mile distances increase.
Despite this, road transport dominates many routes because it offers door-to-door service, requires less paperwork, and suits specialized cargo.
India’s logistics cost currently accounts for 7.97% of GDP, and the growth rate of logistics costs is gradually slowing compared with non-services output.
