The Hindu Business Line January 11 news item- Slump in business and not
cash crunch hits Namakal truckers hard- only vindicates the Indian Foundation
of Transport Research and Training's assertion that a influential section of
transporters are now using the dislocation in supply chain post demonetisation,
to extract unfair concessions from the government. The truckers even the
smaller ones have shifted to digital mode.
One of the key demands of Common Carriers led by their Delhi based premier
Associations has been to get cash withdrawal limit hiked substantially even to
the limit of Rs.15,000/- per day. The
bigger lobby of transporters/ common carriershave pressed for cash withdrawal
limit to be raised higher post demonetisation to Rs.5,000/- a day ie monthly
Rs.1.5 lac for enroute expenses.
The truckers as stated in Business Line story are shifting to digital mode to
counter cash need of drivers for various daily expenses for their fleet. The
S.P.Mohan , quoted as truck operator in the news story in Namakal( Tamil Nadu)
of having shifted to digital mode is a key office bearer of the Fleet Owners
Union and affiliated to All India Motor
Transport Congress( AIMTC). Late Mr. Sengoden from Namakal Truckers Union was
President of AIMTC.
The crux of matter is that demonetisation has huge adverse impact on supply
chain and cargo virtually drying out with direct impact on fleet utilisation in
November 2016 by drop of 40 to 50 per cent for the past four weeks.
The government, by exempting the truckers from toll payment on 391 toll
booths on the National Highways provided succour to them from initial cash
crunch by reducing the variable operating cost of a truck by 15- 20 per cent.
Though the truck hiring common carriers/ Transport Agents having annual
contracts with Corporate Consignors had the bonanza since their contractual
agreement did not have clause to slash freight charges because of the
governmental decision to suspend toll collection for nearly a month. The
transport contracts have only one escalation/ de- escalation clause due to
revision in diesel price .That too has gone up by over Rs.4/ltr. No other issue
is factored into their contracts.
The transporters have charged consignors as per their contracts but truck
rentals in November and December, 2016 have been very weak and low despite cost
escalation due to resumption in Toll during December and two hikes in diesel
The reason is that since every diesel price hike does not result in pro
rata increase in truck rentals. IFTRT has witnessed that in the past two
decades that despite diesel price increase truck rentals dropped due weak
Today the key issue for truckers and government is not cash crunch post
demonetisation, in transport business, but how to come out of the machinations
of powerful lobby of common carriers/ agents/ intermediaries, who are using truckers
as foot soldiers. The slump in business is hitting the truckers hard not only
in Namakal but in the entire country.
Te claim of Namakkal Truck Union that forty per cent of the fleet is under
utilised in January however is a over-statement as things are moving gradually
towards normalcy. The truck rentals are recovering from the low of November and
December2016. Namakkal situated in Western Tamil Nadu is one of the leaders in
the country for truck business
What ultimately shapes up the truck business in the fourth quarter of
current fiscal ( ie January- March 2017) is being keenly observed by IFTRT in a
routine manner. The forthcoming Union Budget, pre- buying of BS- III truck to
beat BS- IV emission from 1.4.2017 and delayed introduction of GST hold key to
market sentiments and shape of things to come. Let's keep our fingers crossed
rather than harping on misplaced fears of common carriers/ transport
intermediaries who claim to control 85 per cent of goods.