Trucking in India: Challenges for the Economy

Think of driving through national highways and having a glimpse on various trucks moving around you. Do we notice different trucks around us just similar to us keeping an eye on latest car models?

Possibly the answer tells us how we look upon the goods transportation industry in the country.

Trucking is one of the important links that facilitates productivity and competitive efficiency, leading to rapid economic development of the country. It also plays a key role in bringing about the development of the remote regions by opening them to trade and investment and integrating them with the mainstream economy.

Apart from being of key infrastructural value, trucking also plays a significant role in connecting the various parts of the country. However despite of its apparent importance the Trucking in India has received scant attention. The inadequacy of transport infrastructure and lack of funding from government have been the crux of problems confronting the road freight sector. 

Over a period of time various industries have evolved and changed a lot making significant positive impact on our lives. However looking at the transport industry, the way it has been ignored makes the industry highly unorganised, though the same is the back bone for any industry.

Goods and services require delivery all across the country, which means the road connectivity is the key to success for the industry. The road penetration in the country is very low as compared to the developed nations. With road network of over 4.68 million kms which is the second largest road network in the world, India has the quantitative road network density (0.66 km per square km of lannd) very close to United States (0.65) and far higher than that of China (0.16) or Brazil (0.20). But looking at the quality of road, 4 or more lane highways, India has 0.07 kms of highways per 1000 people (2010). These are the lowest road and highways density in the world. For reference, United States has 21 kms of roads per 1000 people, France has 15 kilometer per 1000 people.

Currently the total National Highway constitutes around 2% of the total road network in the country. As per the 2009 data, the lane capacity in India is low and only about 16% of India’s road were four lanes or above.

A 2007 study found that the congestion on India's highways reduced average truck and bus speeds to 30–40 km/h (19–25 mph); road maintenance was under-funded, and some 40 percent of villages in India lacked access to all-weather roads. 

The road network in India though extensive is still inadequate and suffers from a number of deficiencies like inability to handle high traffic density, poor conditions of roads etc. The average productivity of a truck in India is an abysmal 200 kms a day which could be increased to 350 - 400 kms just by reduction in congestion. 

Studies show that transportation of goods by road is too much time consuming. Whether it is hand-woven saris from Madhya Pradesh or cow's milk from Punjab, getting any product from one point to another in India is an extremely painful experience. A truck travelling from Kolkata to Mumbai, a distance of approximately 2,150 km takes approximately eight days. This includes stops at state borders to pay tariffs and fees and complete formalities, the wait at crossings as well as other numerous delays. In fact as a result of the delays most of the perishable products, nearly 40 per cent, get spoiled before delivery.

Another factor affecting the efficiency of road freight transport is that it is run mostly by the private operators most of whom own single truck. The trucking industry is handled by so many players such as truck drivers and owners who are sometimes different from operators, forwarders, booking agents, brokers, private financiers, etc. Transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80% of revenues. 

Progress follows lines of transportation as it contributes to the economic, industrial, social and cultural development of country. In India, there are 5.76 lakhs of villages, of which most of them are unconnected with sufficient road system. This entails construction of nearly 1.2 million km length of rural roads with additional investment of about 40,000 crores at current prices.

The KPMG report 2010 on Road Network in India notes that India's road network logistics and transportation bottlenecks hinder its GDP growth by one to two percent (US$16 billion – US$32 billion). In India's 2010 per capita income basis, this is equivalent to a loss of about 10 million new jobs every year.

As per the National Highways Authority of India, about 65% of freight and 80% passenger traffic is carried by the roads. The National Highways carry about 40% of total road traffic, though only about 2% of the road network is covered by these roads.

With the given plight and challenges, how would the transport business grow? Normal truck is meant to be on road, drive to the destination with shortest possible time, safely and securely. With the present road conditions, increased vehicle population on limited roads, do a normal Trucker serving the purpose and at what cost?

Do this industry have the sufficient rewards for a Trucker?

How would the drivers grow and earn more money?

How would the New Technology make ways in the New Generation Trucks ?

How would the transport connect with rural India?

In addition to the Road Network below challenges make it difficult to keep truck on road

• Shortfall of drivers
  • With higher prevalence of education, people are opting for alternate professions over driving, thus leading to a shortfall of drivers
  • Moreover driver licenses are not renewed in time that impacts driver’s availability
• High driver attrition
  • Driver attrition is high, there is constant movement and shuffle
  • Low level of commitment to the business, thus causing disruptions in delivery
• Harassment by law/police
  • Subject to constant hassles and harassment from the police, administration etc regarding permits, licenses etc
• Low Freight Rates

               With unorganized sector and high vehicle population, to keep truck running, continuous business is must. This results into acquiring business at low prices at times, below cost. 

• Increasing Fuel cost

                Fuel constitutes major element in the total expense and with every increase on fuel prices, margins are eroded.   

• High cost of truck down time, means need of effective maintenance management                       

Trucking in India is therefore becoming more and more difficult profession even though it has substantial impact on the GDP.

With development happening across the world in automobile industry, with latest technology making ways across the globe for commercial vehicles, we find many manufactures in India trying to bring in new technology in their Trucks, but in the current scenario have limited acceptability among the Truckers as they perceive these products ahead of time with limited infrastructure and facilities in the country to take advantage of these technology. For example engine HP-high power engines have better acceptability in Developed nations as it provides better turnaround due to better road network. However in India Trucker prefers an optimal engine solution which gives better mileage and carries higher load, as turnaround time is not the first criteria of Truck selection.

Air conditioning cabs in Truck has been started recently with limited usage by the drivers/ Truckers with perceived apprehension that this may lead to decrease in the mileage leading to automobile manufacturer think twice before offering Trucks with mandatory AC cabs.

Think of GPS enabled Truck, which gives real time information to the owner on whereabouts of the Truck positioning which leads to better planning. Many Drivers feel this to be hindrance in their freedom of operations and thus find ways and means of making such system non-operational.

Think of Automatic transmission or cruise control in Trucks, still a long way to go in India where drivers adapt themselves to this technology making driving a passion and bringing their interest back.

Think of Airbags, Night view assist or intelligent driver information system, as a safety features in the Trucks, is the industry ready to realise the importance of the drivers and their life? (Trucks constituents 19% of total road accidents)

All the above features help to improve performance of the Truck along with safety however the industry seems to be not ready for this and it is inclined towards cost saving measures to operate on low cost per tonne basis as their earnings has been remain constant or decreased in last 5 to 8 years.

If India needs to grow up the ladder of development, entire Transport industry needs to be re-looked with due recognition to a Truck Operator and Driver. Special initiatives and programs to be opened up for this industry and providing adequate relaxation in tax regime are few of the important things which is required to uplift this industry and bringing in more focus to make this industry organised.

Regulatory compliance with regard to safety features in the vehicles, recognition by government to Trucking as an important contributor to the economy, increasing and improving quality of infrastructure, incentives to the Truckers, Driver Training Institutes to bring in skilled drivers are few of the measures that will help to bring in more people taking Trucking as an important profession rather than merely been looked upon as a poor and harassed community.

Trucking in India is therefore facing bigger challenges and needs immediate interventions from all the stakeholders be it government, fleet owners, drivers, Corporate s and until all of them have integrated and multi-pronged approach, challenges cannot be addressed. Trucking is going to be the key differentiator for the nations evolving from developing to developed road map and if India fails to have this integrated approach, problems will have multiplying effect.

                                     *************************************