Amid Coronavirus, the shock waves could be felt in the transport supply chain arena, especially by small transportation companies. Their expense side is increasing with revenue being more of a blurry picture. According to Navin Gupta, secretary general of All India Motor Transport Congress (AIMTC), there are chances that around 85% of small companies out of which major portion are covered by unorganized sector might get eliminated from the system due to insolvency and defaulting on EMIs.
Small fleet operators are basically companies owning 1 to 5 trucks and trailers. Sometimes drivers are the owner itself. The business is totally carried on credit basis as heavy investments are made on purchasing of vehicles. The trucks are mostly on EMIs, the owner has to pay around 30000 to 70000 EMI per month. Along with it there are numerous types of fees, taxes and Insurance.
A lorry owner from Nashik says, the deadlines are coming up for insurance and EMIs, everything earned is going into payments of expenditure as the trips have become half the normal’. On average, a truck makes 3 trips monthly and expenses of per trip goes around 160000/- out of which diesel, tolls, salaries, check post fees are paid. The profit tends to be 30000/- approx. That means 90000 profits from that EMIs, office maintenance are to be paid. If trips become less than 50% that means the financial instability starts bubbling. Though the government has provided bit relaxation on moving of non-essential goods as well as EMIs deferral it won’t benefit everyone’ said Navin.
EMI Deferral is not a relief
RBI has announced a three months EMI holiday to provide relief to borrowers. However interest will continue to accrue and also additional interest will be charged on it. The 3 month moratorium period will be expensive for the borrower as compared to the interest paying now, especially for auto loans. This announcement with the intention of bringing little relief is going to be a pain in upcoming months, says Kiran Thakur who owns 4 trucks in Nagpur. He also adds, ‘The government has regulated it but failed to inform hidden clauses of it, my financer called and told me about this. I also tried to get clarity on this but so far no response’.
Another Small transporter from Phaltan, Yogesh Shinde is currently paying total 125000/- of EMI per month, on deferment for 3 months he has to pay additional interest at 1.5%. The financer calls are one type of threat for such transporters, especially for driver cum owners. One such incident took place in Tadepalliguddem, West Godavari district, Andhra Pradesh, a driver cum owner committed suicide because of the pressure created by the financer and his continuous.
Is relaxation working well?
As of now restrictions are relaxed but the question is whether it is going down well. Even after the exemptions only 15-20% of normalcy has hit back on the roads. On roads, only essential goods or previously loaded trucks which were stuck are operating’, says Naveen Kumar. This means the pace of regularity in transport activities is slow. For now, loading of fresh goods is problematic as manufacturing units and warehouses are closed. According to Vikash, an agent between factory and transporter, after 15th April till now could only load 8 to 9 trucks whereas earlier it was 70 to 80 trucks a month’. The essential goods trucks are still doing better but for non- essential goods everything is stagnant as before. Another reason is a handful of drivers are available, lack of manpower is creating obstacles in carrying the operations. The insurance deadlines are coming up, permits are to be.
Drivers are in need
The available ones are those which were already working or the owner who is the driver himself. I had a conversation with at least 20 lorry drivers, around 11 of them were at home. The main reason of non- non-availability of manpower, specifically drivers, is willingness to work. Police or the gram panchayat don’t allow us to get back in the village once you are out, so family also don’t let me go, says Vijay Bhatia, truck driver. He also adds, the owner is calling me to return back to work, but I have no option and now payment will also be cut’. Similar was the case for Yogesh, the villagers complaints to health centers and then police look into the matter, after every trip he makes video of the measures he took while driving and sends to the police and gram panchayat members. Even if drivers are willing to come, there is no transport available to come back from their hometown.
The other reason is forceful quarantine. According to Prakash Gavali, transport owner, driver on Ratnagiri- Kolhapur line carrying mangoes was put into quarantine for 7 days, if that is the case then how will work with already few workers’. He also adds, a month back 46 people were quarantined in Shirwal, Maharashtra out of which 35 are lorry drivers, they should be sent back as rules are relaxed and no signs of coronavirus’. It’s been more than a month, I contacted my district collector, he also issued the pass but later due to extended lockdown, I got stuck in Shirwal along with 35 drivers for no reason says’ Mani Vardharajan, an automobile engineer. Even now when migrants are allowed to travel nothing is moving for them. In such a case how transporters are going to move. The lockdown could be understood and also the government regulations but discrepancies and lack of coordination are the complaints of many.
Wrongdoings in the name of Lockdown
The Ministry of Home Affairs is issuing guidelines but on ground levels they are not the same as on paper. Navin Gupta exclaimed,’ sometimes national highway police officials have no idea about updated rules’. Drivers are asked for permission letters and then get stuck, the Association or transport owner talks to a senior official and the matter is solved. There have been cases, where drivers are fined with penalty by giving reasons like over speeding. The challan is made for not having permission letters of non-essential goods, in such cases happened at Urse Toll Naka, the driver was charged with 20000/- later the anti-corruption team barged in. The toll nakas are also opened, taking tolls on owners. Suraj Khabale owner of Khabale Transport, Maharashtra, for one trip, from Ahmedabad to Satara total toll naka sums up to 13000/-‘. Toll nakas were closed before relaxation and now they are opened, the business is on no-loss, no profit basis for many small transport businesses to take these tolls now is reducing the profit margins.
The robbery and theft is another picture of it, as per Vijay, during trips of essential good supplies, it had to go through fuel robbery as well as goods theft. Vijay has been robbed of diesel worth 10000- 12000/-. Similar problem has been faced by other drivers as well. They fail to file a police complaint as this robbery takes place in the middle of the journey.
Loading and unloading
The loading and unloading seems to be a small function of the entire transport undertaking, but it is causing a bit of a problem. Meanwhile even a small saving in a pandemic situation has become vital, the clients are charging heavy loading charges to transporters. Earlier it used to be 70 to 80/- per ton now the 3rd party is charging them 100 to 110/- per ton. This might not seem of bigger importance but when quantity is in bulk and work is less the balance of cash inflow and outflow sees a big gap, pushing little towards no profit situation.
The above issues were addressed to Satej Dnyandeo, Minister for State Transport in a video conferencing meeting by AIMTC leaders. The ‘Rescue Package’ was asked for the transporters by AIMTC. In that the demand to push deadlines by 6 month for insurance, permits and other statutory compliances, suspension of toll tax were made. For now, the state government has instructed after discussing with central decisions would be made.
Snehal is an author who is enthusiast and wants to travel world