The mismatch between the scorching growth of the auto industry in India and the infrastructural and regulatory development needed to support it is making congestion the norm and risking zero market gain in the country. It is also perpetuating poor delivery standards that are costly both in the short-term and, more importantly, in the long term as companies strive for customer loyalty in a fluctuating market. Not least there are also serious risks to safety for those involved on the ground in the logistics industry
Contrary to more mature economies, the majority of vehicle movements in India are still dominated by road transport, but while moves are being made to improve the quality of commercial vehicles tackling the problematic Indian road network, which means significant investment, any advances made are being wasted by what seems like a willing neglect to tackle those underlying problems.
The overall poor condition of Indian roads is well-documented and, in response, certain measures have brought a reduction in minor transit damages. However, given the widescale lack of training, it is ironically the gradual improvement in the asphalting of highways where it occurs that has actually led to an increase in the number of accidents.
These factors are a concern for Indian carmakers, not least Maruti Suzuki, the country’s largest passenger carmaker, which has a fleet of 80-plus vehicle carriers operating a combined fleet of around 9,000 trucks and trailers.
The company has yet to identify a third party logistics provider for outbound shipments able or willing to take on the challenge of the domestic landscape according to Maruti Suzuki India’s Randhir Singh Kalsi, executive officer, sales and dispatch, spare parts and logistics. The answer for him is multimodal transport and, more specifically, rail. “Considering the congestion on roads, we have to think of alternative ways of transport,” he told Finished Vehicle Logistics magazine. “In other countries, like the US or Europe, a large number of cars, nearly 60-70% are transported by rail; the railway is the obvious alternative.”
Kalsi went on to say that India’s state railway offers a great opportunity but is moving too slowly. “I think, in the long run, the railways should be able to take 30% of the load and both road and rail will co-exist,” he said.
Maruti’s willingness to pay above the road tariff for rail movements are based on the company’s belief that total multimodal costs over longer distances should be cheaper than road costs. Figures testament to the company’s belief show that vehicles moved by non-road means increased to nearly 73,000 between 2010-2011, equalling 5.73% of total volumes.
However, it is quality that is now important in maintaining a position in a market that has seen a slight cooling in its scorching growth, and maintaining vehicle quality over delivery distances that can reach 1,500km is a crucial concern.
For a full insight into how Maruti Suzuki is transforming its logistics operation in India see the lead article in the latest edition of Finished Vehicle Logistics magazine.
