Rising freight cost may impact steel firms

The sharp rise in railway freight could hit the steel industry, which is already reeling under high raw material cost and weak demand. In the last six months, the logistics charges for the steel industry have gone up by 20 per cent to about Rs 2,400 a tonne, and companies are not able to pass on the incremental cost to the end user due to weak demand. To start with, the Railways increased freight rates by 6.5 per cent to 16.5 per cent in June. A few months back, it withdrew the discount given to transportation of goods on short distance even while increasing the short distance coverage to 125 km from 100 km.