Manish Singhal owns a fleet of 18 trucks, of which 11 are lying idle in front of his office at Yashoda Nagar in Kanpur. Though all are in perfect working condition, the sudden dearth of orders has turned them into white elephants.
“The assets are now proving a liability in the current scenario. I have to bear the maintenance costs while the profits are slimming day by day,” says Singhal. He is not alone though, transport orders for around 2,500 trucks in the city orders have declined sharply by more than 45 per cent in the last two months, threatening to endanger recovery of even the minimum operating expenses.
Singhal is well aware of the crisis, which he fears may worsen in future. “Slowdown has visibly affected thousands of transporters in the city. Scores of trucks and other transport vehicles can be seen idling in the Transport Nagar and Yashoda Nagar area of the city,” he informs.
He is not interested in listening the tales of downturn in legendary economies of the West, but is sure that if troubles persist back home, a number of his counterparts may resort to extreme steps like suicide, cowed down by the threats of recovery from their lenders.
“Decline in orders has worst hit the small transporters like me, who had financed their vehicles from banks and other non-institutional credit sources. The operating costs have mounted while the freight rates have dropped by almost 25 per cent crushing the marginal transporters,” he laments.
A member of the Kanpur Motor Transport Association, Singhal says that encouraged by the rising demand, more than 500 local transporters had borrowed credit from the lenders to finance their business, but they have been caught unawares in the unexpected slowdown.
When asked about his strategies to curtail the trouble, he remains clueless. “We can only incur more losses and face closure or the government should dole out credit relief packages for us,” he demands. It may be noticed that almost 50 percent of the local transporters run their business on credit, especially in last two years when the demand had surged unexpectedly. Singhal for instance, has to repay a debt of around Rs. 72000/- every month while profits he makes hardly crosses Rs. 20000/- mark. He feels helpless in reducing the staff, as every vehicle requires at least two workers even for its maintenance. “If the vehicles are not maintained for even three months, they may reduce to almost scrap,” Singhal said. Rather gloomily, he narrates about his failed experiment to put idle vehicles to ferry animals from villages to the city, but for the red tape and corruption. “I had to give up the idea as I did not have enough money to get clearance from various government departments apart from warming the pockets of local policemen who regularly harass us,” he complains. The major chunk of business has been hit due to the cancellation of orders from Mumbai, which accounted for 40 percent of the city orders. “Now, I am plying my trucks even on the local routes but how long can we afford to pay the debts like this,” he asks. Well, that’s the question hundreds of his counterparts are echoing…
