Second to the Indian railways, trucks are the second most frequently used method of transport for transporting cargo in India. However, the sector is poorly regulated, and the country is known to have the largest number of road accidents in the world. Among the many reasons for this phenomenon, one of the most prominent is the practice of overloading trucks, often adopted by transporters to lower costs. A large number of vehicles on Indian roads consist of old vehicles. It is a common sight to see trucks that have broken down in transit, with their cargo spilling on the road.
While the presence of international players in the truck manufacturing segment is helping transporters upgrade their fleet, this process has slowed down in the recent economic downturn. Truck sales have been falling steadily for over a year, and the fiscal year which ended on 30th September 2013, recorded a drop of 27% in the sector. SP Singh, senior fellow and coordinator of the Indian Foundation of Transport Research and Training, cites low GDP (below 5%), drop in the value of the rupee, low investments and low factory output, as the cause of this drop. He also highlights the fact that transporters are not aiming to replace their fleets due to excess capacity.
In spite of these factors, truck manufacturers may hope to see sales rise in the near future. In a Union Cabinet meeting, held on 8th October, the government have decided to take action to ban cargo truck overloading. Trucks that do not adhere to the prescribed norms and limits set, will be penalized 10 times the toll charge at toll gates by the National Highway Authority of India Limited (NHAI). This is a departure from the earlier policy of the ‘golden token’, whereby trucks carrying excess cargo could pay for the cargo and continue. As a result of the recent decision, trucks will have to unload excess cargo at the toll booth.
This decision is welcome news to companies manufacturing trucks in India, and also benefits the transporters. Tata motors, a prominent Indian company, highlights the benefits when it points out that, “In the long run, it could well help additional sales but the greater significance lies in the fact that it will encourage better behaviour on roads, as well as overall vehicle maintenance and thus enhance safety.”
Transporters will now need to expand their fleets in order to ensure that large consignments can be transported on time. It is a great opportunity to upgrade an outdated fleet to one which includes vehicles specifically designed to transport a particular commodity, and choose vehicles that are fuel efficient, provide safety and comfort.
Although it is likely transporters may initially resent the ruling, they stand to benefit from it in the long run. At the same time, the government needs to extend the rule to include roads other than the highway. It must be remembered that the current ruling has been issued by the NHAI, which carries 80% of cargo ferried by road, even though it constitutes about 2% of the road network. The remaining roads are under the purview of their respective state governments, who must take the necessary decisions to strengthen the effort of the NHAI. A well-coordinated effort on the part of the state and central governments will not only go a long way in ensuring road safety, but also reduce damage to the road infrastructure, thus saving the resources which would have been used to repair and maintain them, and providing motorists with a smooth ride.