Indian Railways “Station to Station” (STS) Rates Scheme
The Ministry of Railways has introduced comprehensive guidelines for the Station to Station (STS) Rates scheme, designed to provide significant freight concessions for both new and existing traffic.
This initiative aims to boost rail’s share in freight transport by offering customer-specific and commodity-specific discounts. Here’s everything you need to know about how the STS scheme can benefit your business.
Table of Contents
What is the STS Scheme?
The STS scheme empowers Railway Administration to quote specific rates for the carriage of various commodities between specific originating and destination (O-D) pairs. Whether you are a consignor or a consignee, you may be eligible for these concessions.
Key Applicability:
- Specific Movement: The concession applies to a particular commodity moving between specific stations or points, including the DFCCIL network.
- New & Existing Traffic: Both are eligible, provided they cross the defined benchmark NTKM (Net Tonne Kilometers).
- Cluster Benefits: Concessions can also apply to a “cluster of stations”—points within close proximity (maximum 150 km apart).
How Much Can You Save?
The STS scheme offers percentage discounts over the Normal Tariff Rate (NTR). The level of discount depends on whether you are bringing in new traffic or retaining existing volume:
| Traffic Type | Maximum Discount |
| Incremental (New) Traffic | Up to 30% |
| Retention of Traffic | Up to 15% |
| Container Traffic (Notified Commodities) | Up to 15% |
Note: The net chargeable freight after all concessions cannot be less than the NTR of Class-100.
Understanding the “Benchmark NTKM”
To qualify for a discount, your traffic must exceed a “Benchmark.”
- Definition: The benchmark is generally the NTKM of the corresponding 12-month period from the previous year.
- Example: For a contract starting in November 2022, the benchmark would be the average NTKM from November 2021 to October 2022.
- Activation: The concession is applied from the very next Railway Receipt (RR) after the benchmark is crossed.
What Commodities are Excluded?
While the scheme is broad, certain commodities do not qualify for STS concessions:
- All commodities classified below Class-100.
- Coal & Coke.
- Iron Ore (all types).
- Military traffic, POL (Petroleum, Oil, and Lubricants), and RMC (Railway Material Consignment).
- Motor Vehicles or Automobile Traffic.
How to Apply
If you’re ready to take advantage of these rates, the process is straightforward:
- Application: Submit a proposal to the Divisional Railway Manager (DRM) with details of the commodity, O-D pairs, and previous traffic data.
- Verification: A Divisional Empowered Committee (DEC) will verify the application.
- Approval: Following DRM approval, the proposal is sent to Zonal Headquarters for final approval by the General Manager.
- Agreement: Once approved, an agreement is signed for a period of one to three years.+1
Timeline: The Railways aim for efficiency, with a target of 15 days for finalization at the Divisional level and 7 days at the Zonal level.
MCQ on Station to Station Scheme : Quiz –
1. Which section of the Railways Act, 1989 empowers the Railway Administration to quote Station to Station Rates?
- A) Section 12(b)
- B) Section 32(a)
- C) Section 45(c)
- D) Section 28(a)
Click for Answer & Explanation
Answer: B
Explanation: In terms of Section 32(a) of the Railways Act, 1989, the Railway Administration is empowered to quote Station to Station Rates[cite: 7].
2. What is the primary objective behind issuing the 2022 STS comprehensive guidelines?
- A) To increase passenger fares
- B) To decrease the number of freight trains
- C) To garner more traffic from road and other modes
- D) To privatize station maintenance
Click for Answer & Explanation
Answer: C
Explanation: The guidelines were issued because the rail share of freight has been declining, and the goal is to attract traffic back from roads[cite: 9].
3. To whom can the concession under the STS scheme be granted?
- A) Only the Consignor
- B) Only the Consignee
- C) Either the Consignor or the Consignee
- D) Only the Transport Agent
Click for Answer & Explanation
Answer: C
Explanation: Concession under STS can be granted either to the “Consignor” or the “Consignee”[cite: 46].
4. How is a “Cluster of Stations” defined under this policy?
- A) Stations within 50 km of each other
- B) Stations within 100 km of each other
- C) Stations within 150 km of each other
- D) Stations within the same City limits only
Click for Answer & Explanation
Answer: C
Explanation: A cluster is defined as stations/points within close proximity where the maximum distance between any two points does not exceed 150 km[cite: 36].
5. What is the maximum percentage discount for attracting incremental (new) traffic?
- A) 15%
- B) 20%
- C) 25%
- D) 30%
Click for Answer & Explanation
Answer: D
Explanation: The maximum percentage of discount granted for attracting incremental volume of traffic shall be up to 30%[cite: 66].
6. What is the maximum concession allowed for “retention of traffic”?
- A) 10%
- B) 15%
- C) 20%
- D) 30%
Click for Answer & Explanation
Answer: B
Explanation: For retention of traffic, the maximum concession that can be given is 15% only[cite: 67].
7. Which of the following commodities is EXCLUDED from the STS scheme?
- A) Cement
- B) Food Grains
- C) Coal & Coke
- D) Fertilizer
Click for Answer & Explanation
Answer: C
Explanation: All commodities under the Main Commodity Head “Coal & Coke” are excluded from the scheme[cite: 84].
8. Does “Motor Vehicle or Automobile Traffic” qualify for the STS scheme?
- A) Yes, up to 15% discount
- B) Yes, up to 30% discount
- C) No, it does not qualify
- D) Only if moved in block rakes
Click for Answer & Explanation
Answer: C
Explanation: Motor Vehicle or Automobile Traffic does not qualify for grant of concession under the STS Scheme[cite: 71].
9. What is the minimum and maximum period for an STS agreement?
- A) Min 6 months, Max 1 year
- B) Min 1 year, Max 3 years
- C) Min 1 year, Max 5 years
- D) Min 2 years, Max 4 years
Click for Answer & Explanation
Answer: B
Explanation: An agreement can be entered into for a maximum period of three years and for not less than one year[cite: 97].
10. After the benchmark NTKM is crossed, when does the concession start?
- A) From the very first RR of the year
- B) From the next financial year
- C) From the next ‘RR’ after the benchmark is crossed
- D) Retroactively from the start of the agreement
Click for Answer & Explanation
Answer: C
Explanation: Concession is given from the next ‘RR’ after the benchmark NTKM has been crossed (e.g., if achieved on the 9th RR, concession starts from the 10th)[cite: 56].
11. Who comprises the Divisional Empowered Committee (DEC) that verifies rail user applications?
- A) DRM and Sr. DCM
- B) Commercial Inspector (CMI) and Travelling Inspector of Accounts (TIA)
- C) PCOM and PCCM
- D) Station Master and Goods Supervisor
Click for Answer & Explanation
Answer: B
Explanation: The application is verified by a DEC comprising a Commercial Inspector (CMI) and a Travelling Inspector of Accounts (TIA)[cite: 89].
12. What is the floor rate for net chargeable freight after applying STS concessions?
- A) NTR of Class-80
- B) NTR of Class-90
- C) NTR of Class-100
- D) 50% of the original NTR
Click for Answer & Explanation
Answer: C
Explanation: The net chargeable freight after all concessions should not be less than the Normal Tariff Rate (NTR) of Class-100[cite: 64].
13. Which authority gives the final approval for an STS application?
- A) Divisional Railway Manager (DRM)
- B) General Manager (GM)
- C) Railway Board Chairman
- D) Station Director
Click for Answer & Explanation
Answer: B
Explanation: The DRM forwards applications to Headquarters for final approval by the General Manager through PCCM, PCOM, and PFA[cite: 91].
14. How often is the Benchmark NTKM reviewed?
- A) Every 6 months
- B) Every year
- C) Revised after a maximum period of two years
- D) Never revised once fixed
Click for Answer & Explanation
Answer: C
Explanation: The benchmark shall be reviewed as and when required and shall be revised after a maximum period of two years[cite: 99].
15. What is the prescribed timeline for finalizing a contract at the Zonal Level?
- A) 7 days from receipt of proposal
- B) 15 days from receipt of proposal
- C) 30 days from receipt of proposal
- D) 45 days from receipt of proposal
Click for Answer & Explanation
Answer: A
Explanation: The timeline for finalization at the Zonal Level is 7 days from the date of receipt of the proposal from the Division[cite: 96].
Frquently asked Question
What exactly counts as “New Traffic” under the STS scheme?
“New Traffic” is specifically defined as:
– Traffic offered to rail by a a completely new rail user, provided it crosses the benchmark NTKM for that commodity and station
– A new commodity offered by either an existing or a new rail user.
– An existing commodity offered for a new Origin-Destination (O-D) pair by an existing rail user.
Can I get a discount if I just move my loading point to a different station?
No. The policy strictly ensures that the traffic should not be “shifted.” If a customer moves traffic from station ‘A’ to station ‘B’ just to avail of the concession, it will not be treated as new traffic. Similarly, simply changing the name of the party from “Customer A” to “Customer B” for the same traffic stream does not qualify for the discount.
What is a “Cluster of Stations”?
A cluster is a group of loading points or stations located within close proximity, with a maximum distance of 150 km between any two points. This allows flexibility for businesses that operate across multiple nearby terminals, though booking is normally restricted to no more than two stations within that cluster.
How is the 12-month benchmark calculated?
The benchmark is generally the average NTKM of the corresponding 12-month period from the previous year.
Example: For a contract starting in November 2022, the benchmark is the average performance from November 2021 to October 2022.
If data is missing for some months, the available data can be extrapolated to reach a 12-month figure, which is then adjusted once actual data is received.
Can I combine STS with other freight discount schemes?
Generally, no. The STS concession is granted to volume that has not received any other concessions. The only exception is the 6% concession granted for traffic moving to and from the North East Region, which can be combined with STS
What happens if I want to renew my agreement after three years?
Agreements can be made for a maximum of three years. After the initial three-year period, the new benchmark will be calculated as the average NTKM of those preceding three years.
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