Lack of business due to non-availability of cargo which has left vehicles idling is a major issue that is hurting truck operators. This has emerged a bigger problem than challenges such as driver shortage, Goods and Services Tax (GST) or toll-related issues that have haunted them in the past.
The current situation is not very good for the transport industry. In a bleak business environment, the first option for a transporter is to undercut freight rates and get whatever cargo is available in the market to keep the truck running, said Amit S Potdar, Director, Royal Transline Pvt Ltd, and a member of Nhava Sheva Container Operators’ Welfare Association.
He was participating in a panel discussion on the ‘Road Ahead’ for the Transport Sector organised by Business Line. This was a part of the Transporters Meet held in Mumbai last Friday (January 10). The second edition of this one-of-its-kind event is presented by Indian Oil Corporation and Powered by Mahindra Small Commercial Vehicles. The transporters meet brings together various stakeholders in the sector to discuss issues and suggest solutions to the problems they face.
Pravin Paithankar, President, Maharashtra Heavy Vehicles and Interstate Container Operators Association said, as part of cost cutting, clients target transporters first by cutting down freight rate. This situation needs to change. The government should fix the freight rate based on per km, per tonne, and set the minimum rate for trucks. This will also ensure the survival of the transport sector, he said.
Paithankar also blamed some of the financing companies for the market downturn. Lack of proper due diligence by them while providing funds has caused this crisis, he said. When a transporter requires finance, his repaying capacity, business reach and experience are not evaluated properly. A couple of decades ago, a transporter had to wait for two or three months, and had to pay interest of nearly 16 per cent to get finance. However, today, the interest rate depends on the type of ‘documents’ available. When this kind of financing happens, the way business is being done also changes, and there is no transparency, he said.
According to Subrat Kar, Chief General Manager (Retail Sales), IOC, the company is introducing digitisation and technology to remove pain points for transporters at fuel stations. From 2003, IOC has been trying to make it cashless through secured cards. Since then, not a single fraud transaction has been reported on IOC cards, he said.
IOC has also introduced, through Extra Power House, a fuel desk to help transporters monitor online fuel filling, driver management, and trips. The next move is to introduce telematics, he said. Kar also assured truckers that BS-6 fuel will be available on schedule.
Issues such as BS-6 fuel, FastTag, introducing driver education in school and college curriculum, and respect for drivers were also discussed at the event which saw as many as 150 fleet owners in attendance.