Analysis of Impediments Hindering FMCG Companies from Rail Freight Distribution in Sri Lanka

Abstract

As rail road multimodal transportation integrates economic, social and environmental advantages, rail freight transportation is considered as a vital and effective distribution solution for both bulk and non-bulk cargo in several countries of the world. But all most all of the freight in Sri Lanka is distributed using road transportation modes. Even the minor proportion of freight on rail mostly consist bulk cargo types. As the FMCG (Fast Moving Consumer Goods) which is a type of non-bulk cargo, is distributed fast to dispersed locations throughout the country, using rail as a main leg of distribution can be a potential opportunity. Unfortunately none of the FMCG companies in Sri Lanka today are using rail freight distribution and the main focus of the research is identifying the impediments that hinder the these companies to shift from road to rail. The research revealed five major impediments; lack of collaboration among government and private sector, cost consciousness, doubts on risk and control, unreliability of Sri Lanka Railway (SLR) services and facilities and lack of information available about rail freight distribution. Both SLR and FMCG companies must address these issues and stakeholder consultation is essential for the developments to rail industry to support FMCG distribution.