Lockdown challenges for Truck de India!
R Thirumalai Prakash, Managing Partner, Care Freight Carriers
The wheels of the economy to a great extent depend on the millions of trucks that transport every product that you can think of. Since March 22, 2020, the trucks are parked on highways, throwing the lives of drivers and owners in disarray.
The losses are several: tyres, each cost Rs 19,000 and most trucks have 10-12 tyres, which are stolen, not to mention the batteries and rear view mirrors. Insurance processing and claim take time and lead to loss in operation time and revenue.
Working capital impact
- Theft of Fuel, Tyres, Battery, Rear view Mirror, will put us in serious loss when we open the business after lock down. This will add burden to our existing working capital burden.
- National Permit, Insurance, Quarterly tax money paid for the last quarter and coming quarter, will cost us dearly due to no freight movement.
- Staff salary, Driver Salary, Bhatta etc. to be paid.
- Truck parking fee at various points to be paid, usually parking lot charge around INR 100/- a DAY, which will increase our truck idle charges for every truck.
- Truck Parking Yard charges in the hub and monthly rental charges for the office.
- Low Freight charges by the customers despite the lockdown situation and for the risk taken by the drivers to support. This mostly don’t even cover our cost.
- Bank not following moratorium norms of RBI and putting pressure for payment of EMI
- Post lock down, the minimum capacity of production would start after 3 months if, the financial health of the companies is good.
- Supply and demand imbalance would consequently result in low freight rate for the truck. Supply of truck would be more than the demand for the truck.
- Lorry Receipt or Consignment note is still not digitalized although Toll Gates are digitalized. Submission of original Lorry Receipt would take atleast 15 to 20 days so, billing after the original receipt increases the credit to customer. Can govt. digitalize the delivery with the help of E-way Bill?
- The cargo which is delivered prior to lockdown, is still unpaid as customers didn’t receive the original delivery Proof and the billing is pending. This impacts cash flow.
- If the transporter place trucks through a broker, we may not receive the POD balance of 20% as they might have cash flow issue in the current situation which is a straight loss. Post lockdown will lead to very slow recovery in the production system and distribution system. This will further lead to atleast 1 year to recover from the situation
Demands
- Moratorium of EMI without interest for 1 year from May 2020.
- Small loan of 15 lakhs with low interest rate for working capital to start the business post lockdown
- Exemption in Toll tax, insurance, quarterly tax and national permit for this financial year.
- Govt allotted parking lot in highways to ensure security to trucks.
- Govt to fix minimum freight rate which should cover the EMI, driver salary, and trip cost.
- Implementation of E-way bill based delivery system will help transporters to bill customer immediately. Or all customer to accept digital proof of delivery through watsapp, email or any other mode.
Drivers Challenges In Lock Down
- Many drivers are staying in trucks, mostly without proper food as most of the dhaba are closed.
- Police control on them put them in further stressed situation.
- No nearby ATM to withdraw money.
- In most of the locations, NGO or any govt. agencies are not available to offer food or water to drivers.
- Drivers are not able to go home as the state borders are closed. Their expenses are mounting as they are stranded on the road with very little resources or absolute no resources.
