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.

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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

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