Trucks move on towards growth
R. Jayakumar, Chairman, City Link and Puneet Prakash, Founder & Director, City Link on growth in 2017-18 despite demonetisation in the trucking industry.
Is demonetisation a boon or bane for logistics industry?
R. Jayakumar: The instant demonetisation policy is speculated to be a boon to the logistics industry as it is highly reliant on e-retail and online ordering. Cashless transactions and a digital India-push will consequently drive growth in hyperlocal logistics, which will necessitate innovation and disruption in the last mile logistics space. What if the bank doesn’t facilitate the loan process?
Puneet Prakash: It’s just a temporary phase. If banks don’t facilitate the loan process, then the financial intuitions will come to the truckers’ rescue. Yes, we need to eliminate the toll booths and grow. City Link isn’t affected because of its initial online payment setup. To beat demonetisation, one must deal with monthly recharges at toll booths. That’ll automatically reduce delays and losses.
In demonetisation lies the essence of growth, as today’s generation hates cash and not really call a truck to pay a meagre amount for every order placed. Thus, it’ll help, inspire and enhance the revenue figure for all tech-savvy as well as online consumer demand aggregation firms. How about recuperation?
R. Jayakumar: The Centre’s announcement to scrap the highvalue notes has had an undeniable impact on across various segments of logistics industry including freights, customs and clearance industry. The freight industry uses hard cash for undertaking most of its payments-related activities, including making payments for the daily expenses of drivers and workers, diesel, local taxes, and tolls. The scarcity of high-value notes, however, have slowed down the movements of goods across the country, leading to an indefinite delay in the delivery of exports consignments.
Some industry analysts said the demonetisation decision has resulted in the lack of money flowing into the market, leading to a 75 per cent decline in their transport business. Following the currency blackout, around 60 per cent of freight movement came to a standstill.
Puneet Prakash: To deal with the cash crunch and minimise its impact, several logistics companies have already initiated bank transfers for the reimbursement of their staff for their conveyance, incidental expenses, while making transactions through RTGS/cheques for covering day-to-day expenses including monthly rental, utilities, and other service charges.
(L-R): R. Jayakumar and Puneet Prakash