NEW DELHI: With India’s nationwide lockdown set to continue for another two weeks until May 3, over two-thirds of India’s heavy duty trucks and nearly 90 per cent of its entire road freight capacity are likely to remain idle.
Industry representatives say that unless exemptions on movement restrictions are expanded to more industries, there will be little improvement in demand and a steady worsening in the financial health of its stakeholders — big and small.
Following the announcement of the lockdown extension, the country’s apex road transport union — All India Motor Transport Congress (AIMTC) — said that their worries have only increased. AIMTC Core Committee chairman and former president Bal Malkit Singh claimed that despite the Prime Minister’s call for cooperation, even some public sector units are rescinding work orders. "Corporates and public sector undertakings should honour their existing work contracts as the livelihood of many others depends on them," Singh commented.
With most non-essential industrial activity coming to a halt during the lockdown, demand for freight transport has plunged. Only the gradual expansion of industrial activity can bring back demand, industry representatives say.
According to the Indian Foundation of Transport Research and Training (IFTRT), the lockdown has taken out over 75 per cent of road freight demand out of the picture. “60 per cent of the road cargo pie comes from the manufacturing sector, another 10-15 per cent from infrastructure and export-related activity. These sectors are hardly operating now,” pointed out S P Singh, senior fellow, IFTRT.
The impact of an extended lockdown on India’s freight transport and logistics segment could be quite severe if lockdowns extend till mid-May, a McKinsey report noted. According to the research agency’s analysts, the contraction in output between the last quarter of FY2019-20 (January-March) and first quarter of FY2020-21 (April-June) could be as much as 40-45 per cent.
With the freight and logistics sector contributing around 8 per cent of India’s GDP and employing around 22 million people, the impact of a full month’s lockdown extension will be substantial.
This is why the AIMTC has sought several relief measures from the government to aid the smooth functioning of the sector, Singh said. Among those demands is the allocation of around Rs 200 crore for assistance to drivers on the move.
“The government must use its reach and resources at the district level to set up a place every 200 km to where stranded trucks on the roads due to disruption of supply chains can be sanitised and allowed to move on,” Singh said, adding that the Centre should also extend an insurance cover of Rs 50 lakh for drivers who contract the disease while ferrying essential commodities.