A couple of days ago, I came across a tweet from Business Standard that somebody I follow had retweeted. The tweet mentioned that about 70% of all trucks in India were off roads due to demonetisation. I was shocked, and so should be every citizen, because 70% is a huge number and trucks form the backbone of our supply chain.
Soon this news, based on claim by one transport union guy, was all over the media, reported as fact in the headlines:
Reading this, I was especially shocked as I wondered if I was completely away from the reality of the sector I work in! I run a warehousing company in Hyderabad and am also the founder of Boxoffice Logistics – an online trucking solution in the B2B segment.
I operate out of a place called Kompally, a suburb of Hyderabad city along the Nagpur National Highway. Kompally and nearby areas literally hold 75-80 % of total warehousing space of Hyderabad. These warehouses handle both primary and secondary warehousing needs of Hyderabad and Telangana area in general.
On 8th November, when Prime Minister Narendra Modi announced that there would be demonetisation of 500 and 1000 rupee notes, like everybody we too faced difficulty for first couple of days. And it was more out of confusion than anything else. Things have returned to normal for most of us.
Transportation industry works for upcountry (long distance) and intra-city logistics. Most of industry these days is fragmented and small in fleet size. Trucks are stationed in “transport addas” waiting for business and nearby requirements. Most cities have these addas on all the outskirts serving particular local requirements. Although there is no fixed number to claim what percentage of this business is done in cash and cheque, we believe that they are roughly split 50-50. Primarily, the organised transport companies take cheques and Letters of Credit (LCs) and unorganised truckers prefer cash (a part taken in advance for fuel needs and toll charges, and rest on delivery).
Now I should have seen a huge pile of trucks building up at these addas if 70% were to be off the roads as the news reports claimed. But no, there was no unusual overcrowding. The above two pictures were taken by me in the last two days after I read the news reports. So what was the truth? I wondered.
You don’t need to be in the business like me to realise that 70% of trucks being off road would have created a catastrophe and curfew like situation, with basic essentials like food and medicines prices shooting through the roof and people hitting the roads in rage. While some on the social media might wish to see such catastrophe to declare demonetisation a failure, we didn’t see those. And it’s been two days now since the report was carried by many in the media.
In the last two days, while praying that no catastrophe strikes if the news reports were true, I have been talking to people in the industry to find the truth. And this article is to share the information that I could find out – a step that some journalist should have taken up before publishing the staggering figure of 70%.
First I spoke to all my warehouse heads who also take care of transportation handling and requirements. None of them saw any disruption in their day to day vehicle requirements or difficulty in procuring vehicles. These companies operate both upcountry as well as intra-city logistics like retail store fulfilment and direct customer delivery.
I also spoke to Mr. A Sagar, Director or M/s Sagar Asia pvt ltd., a leading name in Aluminium ladders that specialises in industrial as well as domestic use ladders. The company procures at least 15 vehicles for long haul and many more for local delivery in a week.
“We faced issue for the first two days. Since then, it has got back to normal now. We are facing some issues with transporters who used to work on COD (cash on delivery) basis, but we are trying to issue them cheques or holding their credit till liquidity is back with us,” he said.
I also spoke to Mr. Satyanarayana, who runs a transport company locally to gauge the situation from transporter’s point of view. He operates about 60-65 trucks (25 owned and rest on contract) of both upcountry and intra-city logistics for leading e-commerce and brick and mortar retail companies.
Satyanarayana conveyed the same thing. “The business is slightly down for people who operate in cash (most of them in intra-city logistics), but overall situation is more or less back to normal,” he said. He revealed that many transporters were now operating in cheques or small payments are taken in E-wallets.
He further said that most truckers have started to use fuel cards and debit cards and carry small change for toll charges (while no toll charges are being collected on national highways, some state highways still charge) for upcountry needs. Satyanarayana added that he was happy with the demonetisation move as it will help the country in the long run.
Digging even deeper, I got in Touch with Mr. Eashwar Rao, General Secretary of Andhra Pradesh Lorry Owners Association based out of Vijayawada, one of the biggest transport hubs in the country.
He says, “Our business has a mix of organised transporters and unorganised ones. There has been no impact on the organised transporters, but about 30% of unorganised transporters who operate on cash on delivery basis have suffered. Most affected are the reverse trips businesses, where cash is paid normally.”
He said that his association was in the process of educating all the Transporters about going cashless and training drivers to operate debit cards and fuel cards.
Mr. Rao had a suggestion to PM Modi and Mr. Dharmendra Pradhan, Minister for Petroleum. “Currently we are forced to carry three different PSU oil company fuel cards and are spending our working capital in all three different cards. We would suggest that all the PSUs should come together and release one common card for fuel usage. It would help us in a big way.”
Probing further, he says, “We expect this situation to continue till January and we feel it is good for everyone in the long run. Yes, there are people impacted, but news of 70% of total trucks going off roads in all is false. Ground situation is far removed from such a number.”
I have a business to run and taking time out to talk to these people was a little bit of bother. Even these people are busy with their day to day operations, but they took time out for me to discuss this. Ideally this should have been done by a journalist, whose job is to talk to people and cross verify a claim.
But why work hard when you can just copy paste someone’s claims? It is indeed sad that we citizens have to do media’s job of fact-checking and cross verification. But I feel good about it, and I hope my findings are shared too, and the misinformation spread by the media is countered.
(Written by Sundeep Reddy. He is the founder of Boxoffice Logistics and Zeromile Warehousing. He can be reached on twitter @sundeepgummadi)