THE PROTAGONIST

How the truck driver is the quintessential element of the logistics system and the issues that matter to him, to us.

The truck driver is the quintessential element in this vast system of logistics and trucking industry in India. Ultimately it all boils down to him having to drive the truck across hundreds of kilometres and deliver the goods safely at the required destination. In a country where most of its goods transportation are handled by trucks, and does a valuable contribution to the GDP; it would seem that the driver would be in a better position. However the reality is far from that. Truck-drivers in India are not of particular interest to the general public though they play a vital role in keeping the supply lines of food and sundry things, going to the remotest corners of the far-flung country. They are probably one of the most stigmatised and harassed profession based community in the country.

Although there are no accurate figures for truck drivers and their crew, there are over 5 million trucks plying on the roads of India today.

Many truck drivers are surprised and even angry to learn that they are now labelled as having high-risk behaviour, especially when they see themselves as hard-working, god-fearing people who provide a vital service.

The truck driver’s life is riddled with problems from being typified as a rash, rude individual, high incidence of HIV and STDs in the community, besides being the constant target of officials to extort.

A report, “Corruption in Trucking operations in India” published by Transparency International made startling revelations about the current situation of industry. According to the study. trucks plying on roads pay anywhere between Rs.211 and Rs.266 as bribe money per day depending upon the route. Based on this estimate Rs.79,920 is paid as bribe by a commercial truck during a year. With around 5 million trucks operational in the country, bribe money floating around in the trucking operation is about Rs.22,000 crore a year! A

nother problem faced by the driver is excessive stoppage times,

increasing transit times. En-route stoppages including those at check points and entry points take up to 11 hrs in a day. About 60 % of these (forced) stoppages on road by authorities like RTO, Police, forest, sales and excise, octroi, weighing and measuring departments are for extorting money. Number of trips could increase by 40% if forced delays are avoided. Cost to national economy is about Rs.1130.47 crore per year due to forced stoppages.

RTO and Police, the two key enforcement agencies’ share in bribe money works out to be around 43% and 45% respectively, accounting for almost 90% 1 of total bribes involved in trucking operations

India has one of the largest road networks in the world and around 5 million truck drivers ply on these routes. With buoyant demand for products, there has been an increase in the demand for truck drivers by various transport companies. In the quest of a good job, these drivers take up the assignments in different parts of the country and stay away from their respective families for long stretches. Therefore, due to the nomadic lives they lead, the high pressures of job and long absence from their families make them vulnerable and easy prey for commercial sex workers

The truckers are a high risk community as far as AIDS is concerned. As a community, truckers have 12 times 2 more than the national average of AIDS occurrence in the country. Among India’s 5–6 million truckers, nearly half work on long-distance routes across the country. Approximately 300,000 long-distance truckers in India are living with HIV. HIV and AIDS interventions for truckers in India have been under state government programs, which lack oversight by a national program. Moreover, most government HIV and AIDS interventions have lacked strategic locations and adequate health services for this high-risk population. Truckers play an important role in the Indian HIV epidemic. Data indicate that truckers are three times more likely to have non-regular partner sex than other

men in the general population in India. One third of truckers report commercial sex and truckers are an estimated 10-12 percent of clients of sex workers.HIV prevalence among long-distance truckers ranges from three to seven percent, and one to seven percent have at least one STI. Truckers, therefore, constitute an easily identifiable and programmatically addressable sub-segment of men at risk.

However, truckers are not a homogenous population. Not all of India’s five million truckers are clients of sex workers, and therefore are not at equal risk of acquiring HIV. Studies indicate that length of time away from home and age correlate with levels of risk behaviour among truckers in India. Accordingly long-distance truckers are potentially at high risk of acquiring HIV and STIs, because of the amount of time they spend away from home and their relatively young age. Anecdotal information suggests that long-distance truckers may be driving 8,000 to 10,000 kilometres in a given month, which often translates into absences from home ranging from weeks to several months at a stretch. Long-distance truckers’ enhanced potential risk of acquiring HIV is to some extent validated by risk behaviour and biological data. A study in north India found that HIV prevalence in long-distance truckers is 3.5 times higher than the prevalence for inner-city truckers (seven percent among truckers travelling on the national highway as compared to two percent among inner-city truckers).

Long-distance truckers are also nationally mobile and so have the potential to expand the geographic spread of HIV by linking the epidemic from relatively higher-prevalence areas in southern India to lower-prevalence areas in the north. For these reasons, long-distance truckers are an important bridge group to work with to slow the spread of HIV into the general population. To further substantiate, truckers, as a group, have higher rates of HIV and STIs (11% and 23% respectively according to one survey in South India) than the average male.

In 2003, the Bill & Melinda Gates Foundation created the India

AIDS Initiative, later called Avahan, to curtail the spread of HIV in India.1 To achieve this, Avahan works with high-risk populations—those who are at greatest risk of acquiring and transmitting HIV. These populations include female sex workers, high-risk men who have sex with men,* and injecting drug users, as well as bridge populations (e.g., clients of sex workers) who can act as links between the general population and high-risk populations.

The foundation has three primary goals for this initiative:

1. Build an HIV prevention model at scale in India.

2. Catalyze others to take over and replicate the model.

3. Foster and disseminate learnings within India and worldwide.

As an important component of the Avahan initiative, the foundation allocated funding of US$12 million to prevent the spread of HIV/AIDS and sexually transmitted infections (STIs) among drivers and their helpers. The project aimed to increase safe sexual behaviours and to reduce sexually transmitted infections and new HIV infections among truckers through innovative approaches to

prevention programming. In the first 18 months of operation of the project, data from behavioural tracking surveys and the Avahan’s routine monitoring system revealed that only seven percent of long-distance truckers were accessing program services. Further, the routine monitoring system indicated that only 40-50 percent of the population accessing services were actually long-distance truckers.

Transport Corporation of India (TCI), as a major cargo transport company, recognized the importance of truckers in its business and launched a project specifically targeted to this population. This five-year HIV prevention project, Project Kavach (a Hindi word meaning protection or shield), is being implemented by TCI’s social arm, the TCI Foundation, and by the Avahan India AIDS Initiative.TCI initially set up intervention sites named “Khushi” clinics at 36 locations along major national highways. Within two years, however, program data indicated that despite a national presence, critical program gaps remained. A behaviour tracking survey in mid-2005 revealed that program awareness among the target population was only 12 percent and service uptake was only

7 percent. Other data revealed that approximately 40-50 percent of services were inadvertently directed at individuals other than longdistance truckers (such as short-distance truckers and other people working at the transshipment locations).

In response the program decided to:

1. Focus interventions on the largest impact locations, thereby halving the number of locations to 17

2. Within a location maximize coverage of long-distance truckers by intelligent placement of services

3. Ensure a standardized interface across locations in order to increase brand recall

4. Enhance exposure to program services by increasing the number of service touch points in a site

5. Make truckers the face of the program by engaging them as peer outreach workers

These changes resulted in doubling of monthly communication reach and monthly clinic uptake as well as a 50 percent increase in monthly condom sales. Moreover, focusing services in and around natural traffic areas resulted in 85-90 percent of services reaching long-distance truckers of the population accessing services were actually long-distance truckers.

The TCI Foundation is exploring several plans and ideas for making Project Kavach more effective:

• Strengthening links with testing and treatment facilities around

each clinic so as to develop a strong referral network.

• Enabling each Khushi clinic to undertake HIV testing.

• Building a mechanism to track truckers’ movements. The project

now has no way of ensuring that truckers needing further treatment

would return to a clinic (and truckers often lose their Khushi

passports).

• Documenting the lessons and achievements of the program to

help in developing a future strategy.

Truck drivers do not have the most secure of jobs either. Erratic payments coupled with the loans that most of them take to buy their truck make it all the

harder on them. Most of the truck drivers are not a part of any union for fear that their employers would fire them. It seems to be in the best selfish interest of the owners that they prevent the drivers from joining any union which would obviously demand higher pays and other amenities.

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

The plot

Why the trucking industry is so important to the nation.

Trucks are goods carriers, and account for around 87% of sales in the Indian MHCV market. Buses are passenger carriers, accounting for 13% of MHCVs. In the LCV segment, while goods carriers account for over 84% of domestic sales, passenger carriers account for 16% 1.

The logistics business in India holds immense potential. Transport Intelligence has launched its Emerging Market Logistics Index, which ranks 38 countries from the developing world in terms of the attractiveness of their logistics markets to foreign investors. It measures the scale of opportunities by way of three key indices: ‘Market size and growth attractiveness’; ‘Market compatibility’; and ‘Connectedness’.

India (1) claimed the top spot of the overall rankings, scoring particularly highly in terms of market size and growth prospects. Brazil (2) took second place, helped not only by its economic performance but also by good levels of market accessibility and improving domestic and international transport connections. Indonesia (3) also scored well with Mexico (4) and Russia (5) making up the top five logistics markets 2.

China and India are the top two over-performers among developing economies in improving their capacity to efficiently move goods and connect manufacturers and consumers with international markets, according to a new World Bank Group survey.

India is also rated as the best performer from South Asia though overall it’s listed 47th among the 155 economies ranked in the Logistics Performance Indicators (LPI), included in the report “Connecting to Compete 2010: Trade Logistics in the Global Economy” 3.

Germany is rated as the top performer in the study based on what the Bank said was the most comprehensive world survey of international freight forwarders and express carriers.

The report, headed by World Bank Group economists Jean Francois Arvis and Monica Alina Mustra, notes that among developing economies logistics performance transcends the level of per capita income: Many countries perform better than what their income level would suggest.

The ten most significant over-performers include China (27), India (47), Uganda (66), Vietnam (53), Thailand (35), the Philippines (44), and South Africa (28).

India scored an overall Logistics Performance Index (LPI) of 3.12 in 2010, a significant improvement over 3.07 in 2007. This was largely driven by improvements in indicators such as ease and affordability of processing international shipments, track and trace capability, and timeliness.

AIR TO WATER

The contribution of the air and water transport

While the waterways are mainly used for international shipment of goods, the aviation industry’s role in the logistics system is as of now miniscule. Despite expectations of air freight growing 20 per cent in India by 2012 1, Air India, Kingfisher Xpress and Jet Airways say the business is stalled by a lack of infrastructure and industrial know-how. The sheer infancy of the India air cargo sector, needs atleast another three to four years to mature.

Entrants like Deccan 360 or Kingfisher Xpress are still trying to understand the real dynamics of the business. Kingfisher Xpress includes a same day offering it claims is India’s first such product with a money-back guarantee. The airline collects shipments up to 175 kilos (386 lbs.) in Mumbai, New Delhi, Bangalore, Hyderabad, Chennai and Kolkata with guaranteed same day delivery to Bagdogra, Bangalore, Chennai, Coimbatore, Delhi, Kochi, Goa, Guwahati, Hyderabad, Indore, Kolkata, Mumbai, Raipur, Ranchi, Lucknow, Nagpur, Pune and Srinagar.Foreign investment is also important and more is sorely needed at airports at Chennai, Kolkata, Hyderabad and Bangalore as well as other across the country.

MOVING INDIA

What logistic means to the country

India’s rising prominence in the manufacturing sector over the last few years has given a fresh lease of life to the logistics market, and this trend is likely to gain pace with the wave of global economic slowdown gradually receding and India emerging as one of the earliest major economies to recover from downturn.India's logistics industry is forecast to become an over Rs 5.55 lakh crore ($120.42 billion) market by 2014 1, driven by growth in the manufacturing sector,This fast-paced growth of the industrial sector, coupled with the more sturdy progress of the agricultural sector, has necessitated extensive supply chains across the country to facilitate sourcing and distribution of production. Distribution networks of most industries in India involve numerous retailers across the country, and multiple levels of intermediaries. Since companies will be hard pressed to serve such an intricate network, logistics service providers will fancy their chances of finding a firm foothold in the Indian market. Apart from the steady expansion of operations by large domestic industrial groups, an increasing number of global majors in industries ranging from automotive and electronics to pharmaceuticals and cement have been targeting a spot in the highly lucrative Indian market. While foreign companies need to engage logistics service providers since they are not conversant with the culture, government policies, or distribution landscape of the country, domestic companies are outsourcing their logistic activities to organized third-party logistics to focus on their core competencies.

Most manufacturing industries such as automotive, cement, minerals, oil & gas, pharma, food processing, and fast moving consumer goods (FMCG) need multimodal transportation services as they have a widespread consumer base but limited production bases. Industries such as FMCG, pharma, and food processing also have considerable requirements for integrated logistics parks. Multimodal transportation solutions are becoming possible with the development of inter-connected transportation infrastructure facilities, especially dedicated freight corridors by the railways and improvements in coastal shipping facilities. Similarly, the construction of massive state-of-the-art logistics parks at key distribution hubs are helping to meet the specialized warehousing needs of industries. These developments are encouraging companies to outsource logistics functions.

The modes of transport employed in by the logistics industry are :

- Waterway transport

India’s coastline of about 6,000 km is dotted with 11 major, 11 intermediate and 168 minor ports. Nearly 95 per cent of the country’s foreign cargo (by volume) moves by sea

- Airways transport

Number of full-fledged Airports in India total up to nearly 92, out of which 12 are international airports. The recent phenomenon of introduction of low cost airlines in India created a stir in the travel scenario of India.

- Road transport

India has over 65,569 km of Highways

- Railways transport

Indian Railways has one of the largest and busiest rail networks in the world, transporting 20 million passengers and more than 2 million tonnes of freight daily.It traverses the length and breadth of the country, covering 6,909 stations over a total route length of more than 63,327 kilometres

What..Why..Who...

What this blog is primarily set up for is to record and publish our studies on logistics in India with primary focus on the long haul trucking industry.

The reason why we are doing is this is basically because we wanted to have one place where we could record all our observations,studies,design solutions and so on related to the long haul trucking industry .Besides we felt the need for a place where one could have access more information about the long haul trucking.Via our blog we want to reach out to more people and let them know more about this quintessential industry as whole.

Who we are? We are a team students pursuing our post graduate degree in Transportation and Automobile Design at the National Institute of Design, Ahmedabad,India. Currently in our 4th semester,this blog is a record as part of our Systems Design project regarding long haul trucks in India.

Abhilash Sudhindran

Gopalkrishna Pai

Namit Bisht