Impact of Demonetization on truck Logistics

The demonetization exercise has put the truck business, one of the largest unorganized, cash-based sectors in the country, in great difficulty. Operators say their truck transport business has been badly hit by the demonetization of Rs 500 and Rs 1,000 notes as they have no new cash even to pay the drivers, while clients are finding it tough to pay them in the new currency.

Moreover, post the demonetization implementation on November 8^th 2016, many decided to look for ways to acquire accepted currency, truck drivers, single operators and many in the business have found themselves at the receiving end. Hardships in getting the money exchanged quickly at fuel pumps or banks had further added to their woes, they said.

Manjinder Singh Dhaliwal, the Secretary, Maharashtra, Tank and Lorry Owner’s Association said, we are worst affected due to demonetization of Rs 500 and Rs 1,000 currency notes. Yet, never did we call for a strike and not even once tried to hamper the flow of essential commodities for the larger public interest.

Subsequently, Shamshuddin Khan, a mid-sized fleet operator, said, the withdrawal limits imposed upon us are too small to cater to middle-sized and large scale operators. How are we supposed to pay cash to drivers who venture out regularly for business related transactions? We are also facing issues with paying our pending installments to banks.

The operators who use trucks, tanks and lorries for transport of goods and commodities across the nation, have complained against troubles while paying dues of drivers, bank installments and other payments due to a cash shortage. With no cash in hand, at least forty percent of their operations has been majorly affected, they said.

To add on, with cash shortage in the market, delayed deliveries of products and reduction in a number of trucks and tanks they can operate a day are other worries. With each one in their line of a business refusing to accept old notes, bigger players in the market have offered to pay on credit till things are settled.

Thus, with each segment in their business demanding transactions in new notes, hoarding them seems to have become an issue. Khan further continues, “We appeal to the authorities to reduce unaccounted submission of money at check-nakas, increase withdrawal limits for fleet operators on pro rata basis. Our appeal is to understand the nuances of our problem.