Road transport sector

It is a well-known fact that road transportation is one of the most basic, essential and significant infrastructure requirements and is utmost necessary for the growth and expansion of the nation and its economy.

However, it is equally true that road transport industry is the most exploited and neglected segment and practically very little or nothing has been done by the central or state government for its upliftment.

Road freight transport is entirely in the hands of the private sector unlike railways and waterways. Today, road traffic is moving at a much better speed across the nation.

This has been possible only because of private participation, perhaps that’s the way to go, if we want to break free the infrastructure related bottlenecks, which routinely disrupt supply chain management operations in India.

As an industry, transport industry is highly unorganized and fragmented with minimal literacy level. Here, 80 per cent of themarket is dominated by transporters who have a fleet size of less than 5 trucks. Given this and the fact that there is low entry barrier, regulation is something that is very difficult to bring about.

Competition from unorganized sector has forced the industry to sustain on very thin margins. At the same time, competition from the MNCs with huge muscle power is giving an altogether different challenge to Indian transportation and logistics companies to grow bigger.

Indian roads carry 85 per cent of the passenger and 80 per cent of the freight traffic of the country. The highways, even though make up only 2 per cent of the road network by length, carry 55 per cent of this traffic.

Supply chain and logistics management has tremendous business opportunity. Across industries, companies are adapting innovative practices and have changed the way they used to handle their day–to–day logistical and supply chain operations. It is in this way that the logistics sector has gearing up to face the challenges of global competition, for a brighter and better future.

Though a vast majority of suppliers of all kinds of SCM services remain in the small scale sector, a small percentage of them manages to move up the ladder to higher levels by value addition, automation and technology upgradation.

The role of the transport operator has evolved over the years, with increasing competition and changing regulatory framework, and especially with more businesses move into the field of logistics. Consequently, companies, irrespective of whether they operate freight services by sea, air, rail or road, are exposed to increasing liabilities.

It is salutary to note that this year’s budget has placed SME’s in the service sector at par with those in the manufacturing sector. It will undoubtedly provide the necessary impetus to the growth of the service sector. However, the segment feels that government should save it from the multiple toll tax for commercial vehicles and increasing the same quite frequently.

The more pressing issue, which needs central government attention, is the disparity that exist in diesel prices across India. This results in non uniformity in zonal freight rates. It is time that the authorities take some measures and help transporters tide over the situation, as it is a matter of great implications across the length and breadth of the country.