Yes!! transportation using Heavy Commercial Vehicles, which

Yes!! We are talking about transportation in India. The Uber’s storm peeled off the settled layers uplifting the way we travel. But a $100 billion industry deprived of technology, is now peeking through the Make in India and Digital India campaigns.

Today, we are one of the production houses of the world which brings Indian Freight Transport Market as the protagonist in the strong growing economy. So it is obvious to ask if we are ready for the “Lorry Revolution”, knocking hard and steady at the rugged doors of our Logistics Industry.The question cannot be answered unless we figure out the ground reality of transportation in India.

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Thus, to begin with, we have four modes of transport i.e.  Air, Rail, Road, and Water. Transportation by road overshadows the rest of the modes of transportation. So let’s target road transportation using Heavy Commercial Vehicles, which in general is interstate movements and covers the major chunk of revenue. The article will give you a glimpse of the transportation system in India, challenges in procuring trucks and threats which has paved the way for truck aggregation. Transportation system in IndiaThe Model practiced in India involves a number of government agencies, truck owners, brokers, and Industries.

Manufacturing hubs requests for trucks on its portal either on daily basis or long contractual basis. Daily rates are closely monitored by brokers which places a truck after securing a good rate from the industry. Truck owners are expected to maintain their vehicle and clearances to prevent truck rejection. Daily rates are generally followed by small and medium industries with a few exception like Patanjali.Long-term contracts are signed between fleet owners and big industries. These are awarded through an English Auction which is either an online process or is conducted as a face to face negotiation. Contracts can be quarterly, half-yearly or yearly.

Firms like HUL, Godrej, Marico prefers the long-term contracts and creates huge revenues for the transporters.However, the amount of total business in the hands of big fleet owners constitute a small proportion. Most of the demands are catered through brokers in both the types of contract systems. Brokers maintain a portfolio of large number of independent small truck owners who cannot compete with fleet owners for the contract. This kind is more prominent and connects large fleet owners and small truck owners to satisfy the demand. However, cross brokerage exists as a common practice and adds to the cost of transportation.Loyalty and personal contacts are highly rewarded, with most of the short payment cycle contracts falling into the hands of big fleet owners.

Middlemen exist here as well which connects the contesting parties to secure good transportation rates, thus increasing the price of goods which will be sold in the market. Both the kind of brokers have a negative effect on the original price of goods reaching the markets. The system has allowed such developments because of several challenges involved in procuring trucks. The next section will explain these challenges in brief.

 Challenges in procuring trucks The Availability and cost of procuring Trucks for goods movement depend on the agricultural harvest in the region, government regulations, festivals, truck type, industries and return load. I.    Farm produce requires transportation to storages in a short interval of time, thus provides a good return for the same trip.

This raises the rate of the trucks in that particular region, causing unavailability for industrial goods movement. II.    Favorable government policies encourage sales of trucks ensuring more availability.III.

    Festivals encourage goods movement leading to an increase in demand for trucks thus decreasing availability.IV.    16 Ton Trucks have good availability across the country compared to 9 Ton and others capacity trucks.V.    Industrial production creates a permanent demand which leads to good availability of trucks across all seasons and stabilizes the procurement cost.VI.    The promise of Return Load decreases the cost of transportation and ensures profit to the truck owners. The need to understand these factors lies in the fact that a lane like Kolkata to Bengaluru can have rates as low as Rs 46000 to as high as Rs 74000 depending upon the season.

This huge deviation appears in several other lanes as well and can be attributed to the factors mentioned above. In Business it is said that you don’t get what you deserve, rather you get what you negotiate. The same follows here, wherein a good negotiation for rates with the truck owners could help your transport company gain a few extra 1000 bucks in each trip. Negotiations are always considered reliable if done with a truck owner than a broker. ThreatsThe Logistics nightmares are not just the challenges in procurement but a concoction of several ingredients. The trophy is decorated over the long payment cycle with many industries paying after 6 months of the service provided by a transport company. This puts transporter in a grave situation and raises the probability of bankruptcy. Disappearing consumer goods while in the route is the second biggest threat faced by them.

Long trips, truck halts, and driver’s negligence push for security measures necessary to prevent such losses. Next in line is the presence of Unions which restricts the return load availability leading to a high procurement cost. This condition prevails across North India, which is considered as the transport hub of the country. Lastly, part loading is a serious but a hidden discomfort. Here, the truck is loaded as per the requirement but few part loads like pharmaceutical products, costly spices etc are done illegally to increase the owner’s profit.

This may look harmless, but is a good reason for the cancellation of contracts.  Man-made threats are no comparison to nature’s fury. However, few incidents are worth mentioning without even falling into the category of natural disasters.

Rains across northeastern regions, Himalayan valleys, and undeveloped regions shoot up the procurement cost for transportation into these regions. The transportation system, challenges, and threats have generated roadmaps for the “Lorry Revolution” which has reached the shores of the seventh largest country in the world. 


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