Friday, May 14, 2010

The trucking industry is a major contributor to the Indian economy. It is understood that in India, the total logistics costs constitute nearly 10 percent of the GNP, out of which nearly 40 percent is on account of transportation alone. In the US, the estimates show that this cost is around 6 percent of the GNP. It has been increasing its share in the movement of goods within the country vis-à-vis other modes of transport, up from less than 20 per cent in 1951 to 70 per cent now. It has also, in the process, acquired significant political influence. Given the large number of truck owners, the industry appears to be competitive; the fact, however, is that around 5000 cargo operators handle the entire cargo. According to industry sources, in about 2-3% of cases, do customers directly access the truck owners and book their goods. The cargo operators cartelize and decide the freight and there is hardly any competition at their level. This is the most important feature of the trucking industry in India and it has a critical bearing on the quality of its service and the policy design to deal with the issue. Road traffic has overtaken the railways in both the passenger and freight segments

According to NHAI estimates, 85% of the passenger traffic and 70% of freight traffic in India is carried by the and the balance is carried by the railways. Further, there has been a long-term modal shift towards roads away from railways with the share of road transport in the overall traffic flows increasing steadily.

The road transport sector has witnessed a growth rate of 7 to 10 per cent every year since 1960-61. It is estimated that total freight transport output will double every 10 to 13 years. A rise in the long-term trend line of GDP growth will imply correspondingly rapid growth in transport output.

The Indian long-distance trucking industry consists of three distinct segments: free agents, port operators, and express cargo operators. It is entirely in the private domain.
Truckers tend to specialize in any one of these segments, primarily because it is difficult to build business networks in more than one segment. The free agent segment accounts for approximately 70 percent of the two million long-distance truckers; port operators account for approximately 20 percent; and express cargo employs the remaining ten percent of truckers. The free agent segment is also the most fragmented, with a vast majority working for small transport operators (owning a maximum of five trucks).

Major trucking destinations in India

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