Freight and logistic business inching back to normalcy

The prolonged lockdown had cast a shadow on the freight and the logistics business in India. There was large scale disruption in the supply chain aspects. Though essential goods and FMCG were moving despite the lockdown, the supply chain of non-essential goods and other items had taken a hit due to the restrictions. However, this is also gradually inching back to normalcy now.

Though the complete normalisation of businesses is expected to take another month or so, the positive sign is that almost 50 per cent of the total capacity has already been achieved. This is gradually inching back towards normalcy as a number of truck drivers, who had left for their villages during the lockdown, have begun returning to their work.

“Currently, regular movement of freight is impaired for transporters due to drivers still stuck at their native places. We expect normalisation of the supply side by early June,” said Karthikesan Venkatesan, co-founder and director, FreightX, an online logistics company.

Though with the COVID-19 pandemic still raging on, it is still early to predict when things will completely become normal, there has been an attempt by transport companies to make up for the shortfall of drivers. Though truck movements have started in most parts of the country, the imbalance in demand and supply persists, resulting in freight business volatility.

“Freight markets are resilient, but the transport network was broken nationally during the lockdown. Freight volatility is likely to persist in the near future. The government should consider the National Registry of Truck Drivers in synchronisation with the National Logistics Portal to be implemented in addition to other steps to normalise the situation at the earliest,” Raj Saxena, Founder and CEO, LogisticsNow told THE WEEK.

It is a known fact that the freight and logistics segment employs millions. Logistics in manufacturing, general trade, retailing and e-commerce is expected to be back to 50 per cent of the normal levels in the next four-six weeks as the lockdown eases. However, recovery thereafter to 100 per cent will take some time. During this process, the sector is likely to face a shortage of blue collar labourers because many of them are either back in their villages or in the process. MNREGA wages, kharif season and the fear of infection is expected to hold most of them for some time in their hometowns and villages.

“Under the current circumstances, recruiters in the sector will have to find ways to convince people that cities and workplaces are safe and influence employers to provide additional care to employees so that they can be attracted to jobs in this field. Besides, they will have to look for alternate pools to source candidates. Post-lockdown, the situation will change. Preferences of workers and employers would change and there would be a common ground. Companies would prefer to have a larger pool of employees on contract in the sector so that they have greater flexibility in their staffing and costs,” said Aditya Mishra, Director and CEO of CIEL HR Services.

Partial easing of the lockdown has given the much required positive push to the sector. Many product segments will continue to move even as the lockdown ends. Industries such as automobiles and auto parts will have great prospects in the future.

“We expect to operate with 60 per cent of the normal volume of previous year from June. Beyond this, it is difficult to predict. The freight rates are likely to go up by close to anywhere between 15 to 40 per cent. Delays due to uncertain situations at different factories or longer wait time at the warehouses will continue to persist for some more time. The movement between consumption point and manufacturing of such segments such as white goods and automobiles is likely to be near nil. At the same time, the logistics industry has adjusted rapidly to the new normal taking extra precautions into consideration,” remarked Anjani Mandal, CEO and Co-Founder of Fortigo.

Source: https://www.theweek.in/news/biz-tech/2020/05/26/freight-and-logistic-business-inching-back-to-normalcy.html

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