Freight Corridors Drive Major Drop in India’s Logistics Costs

India’s logistics sector has witnessed a dramatic transformation as the Dedicated Freight Corridors (DFCs) have reduced logistics costs from 14% to 8–9% of GDP, according to the Dedicated Freight Corridor Corporation of India Limited (DFCCIL). The corporation said this achievement reflects a milestone in India’s efforts toward economic efficiency, industrial competitiveness, and self-reliance.

DFCCIL estimated India’s logistics costs at nearly Rs 24 lakh crore and credited the freight corridors for creating an affordable, efficient, and environmentally sustainable freight transport system. “The dedicated freight corridors are driving India’s economic growth by enabling a more efficient and sustainable logistics ecosystem,” the company said in a statement.

A joint report by DPIIT and NCAER in September reaffirmed that rail transport remains the most economical mode of goods movement in India. At an average cost of Rs 1.96 per kilometre, railways outperform other modes such as road (Rs 3.78), waterways (Rs 2.3), and air freight (Rs 72).

Progress on the Western Dedicated Freight Corridor (WDFC) is nearing completion, with the final stretch between Vaitarna and the Jawaharlal Nehru Port Trust (JNPT) almost ready. On October 29, DFCCIL conducted a successful trial run of a goods train between Vaitarna and Kharbao—covering around 37 kilometres. Only 67 kilometres now remain to be commissioned. “The remaining section will be ready within the next two months, marking the completion of a project that began nearly two decades ago,” a DFCCIL official said.

As of now, 96.4% of the entire 2,843-kilometre DFC network has been completed. The Eastern DFC, stretching 1,337 kilometres, is fully operational, while the WDFC, covering 1,506 kilometres, has achieved 93.2% completion.

The completion of the WDFC is expected to bring a major shift in goods traffic—especially container movement—from traditional rail and road networks to the DFC system. Currently, DFCCIL runs around 386 freight trains daily. Once connectivity to JNPT is operational, this figure is projected to rise to between 430 and 440 trains per day. Additionally, the average speed of freight rakes is expected to increase from 50–60 kmph to about 75 kmph.

During FY25, DFCCIL recorded a gross tonne kilometre (GTKM) of over 2,002 billion and a net tonne kilometre (NTKM) of 115 billion—signifying strong growth in network productivity. Despite operating just 4% of India’s overall rail network, DFCCIL now carries more than 13.4% of the nation’s total railway freight traffic.

The completion of the freight corridors marks a new chapter in India’s logistics journey—paving the way for faster, cost-effective, and sustainable freight movement that strengthens the backbone of the country’s industrial economy.