The third edition of Mahindra MPower summit stressed on cutting edge transport management.
Demonetisation affected the transport industry. It brought about a disruptive change, and led the transport industry to embark on a challenging ride that would last for a few months. The third edition of Mahindra MPower Summit held at IIM Ahmedbad recently reflected on this and many other developments in an effort to attain cutting edge transport management techniques that would help to tackle challenges, either disruptive or constructive in nature. Organised by the Mahindra Truck and Bus Division, the summit focused upon developing a docket for industry veterans and further professionalise their businesses. The summit included a course that would facilitate faster decision making.
Following in the footsteps of the earlier MPower editions, starting 2014, the summit provided transporters an insight into various aspects of the ecosystem that they may have overlooked. With many transport enterprises being family owned business, the broad agenda of the summit turned out a course that will facilitate faster decision making and tackling of challenges in areas like succession planning, family business managemnent, and attracting investments in challenging times.
With GST scheduled for July 2017, the summit sought to highlight the challenges the transport industry will face. Nalin Mehta, Managing Director & CEO, Mahindra Trucks & Buses Limited, drew attention to the digitisation the industry is witnessing. “This is accompanied by disruptive practices, and will make for an interesting time to do business. A big implication of GST will be on the logistics industry, and how it operates. There is a need to stay alert and gear-up for any challenges that may arise,” he mentioned. Pointing at the CV industry’s progress in migrating to BSVI emission norms by 2020, Mehta averred that there is a need to address the legal aspects as well. “Apart from load aggregation and the mushrooming of internet-based models, the way the industry used to work until now, and will need to work henceforth will be different,” he said.
New ways of working
Delving upon the various industry trends that are prevalent. Members of Mahindra Trucks & Buses Limited, and IIM-A faculties aired their views in front of the 22 participants – veteran transporters and their prodigies, from 11 cities. A healthy exchange of ideas and practices ensued as the summit got underway. If the 22 participants represented logistics companies that have a collective turnover of Rs.1100 crore, the brain storming session as part of the summit saw the presence of five transport excellence award winners. The faculties provided valuable inputs and insights into the way the transport industry operates, and should operate to ensure agility and efficiency. The faculties highlighted a need for better synergies even as they touched upon various topics connected with the way the transport industry conducts business. The two-day summit delved upon topics like current macro economic scenario, the effect of GST, value creation in trucking industry, re-inventing family owned business, inventing new business models, and more.
Emphasising on upgrading transporter skills, V. G. Ramakrishnan, Managing Director, Avanteum Advisors, drew attention to the shrinking manufacturing base in India. Despite this, the freight movement increased by 4.5 per cent in last three years, he stated. Stressing upon transport by road continuing to dominate with over 60 per cent share of the overall transportation in the country, Ramakrishnan averred, “Freight movement through road will be complemented with the implementation of GST. It will lead to the removal of check points, better road infrastructure and faster turn around times.” He cautioned that there was a need to work on other areas like fleet upgradation to reap the most benefit. Stating that CVs have become costlier because of the implementation of the BSIV emission norms, Ramakrishnan opined, “Freight rates have not kept pace with diesel rates due to which profitability continues to be under pressure. With GST coming in, there will be a rapid shift towards higher tonnage vehicles. The scarcity of skilled drivers could be compensated for to an extent by the deployment of new technologies in CVs.”
Former Dean of IIM-A, and now the director of IIM-Bangalore, Professor G. Raghuram, through video conferencing, highlighted the significance of road transport sector in India. He drew attention to a report by National Transport Development Policy Committee, which expects freight traffic to reach 13118 billion tonnes per km (BTKM) by year FY2032. The report expects rail and road transport to enjoy an equal share of traffic by FY2032. This, said Raghuram, is significant when one considers the current situation where road share is almost 65 per cent at 1986 billion net tonne kilometer (btkm) out of the total 3056 bktm of roads India has. Stating that India has already crossed 100 thousand kilometers in national highways, which is just two per cent of total road network in India, carrying 40 per cent of the traffic, Raghuram averred, “This will get more boost with all weather roads under Pradhan Mantri Gram Sadak Yojana.” Road network is still dominated by rural roads by over 60 per cent, he added.
Terming practices like overloading as induced, and representative of front-line immaturity, Raghuram described that only 10 per cent of the truck owners in India have more than 20 trucks. “Professionalisation of the transport sector is very important. The more organised the road transport is, the better it be will be for logistics framework to improve. This will in-turn improve the transport industry,” he explained. Conducting a discussion on challenges faced by the transporters, Prof. Debjit Roy encouraged the participants to think of amicable solutions that could help resolve the various problems they face.
Touching upon the technical aspects of trucking, Dr. Venkat Srinivas, Principal Chief Engineer and Head – Product Development, Mahindra Trucks & Buses Limited, through video conferencing, delved upon the technological trends in CVs in India. Growing urbanisation, he said, will induce the much needed momentum in the refinement of the hub and spoke transportation model in India. This will in-turn, lead to a move to higher tonnage vehicles that will call for the employment of sophisticated technologies,” averred Dr. Srinivas. Highlighting emerging CV trends in India, including the rising awareness for safety and connectivity, prognostics, and policy regulations, Dr. Srinivas called upon the participants to think what it could mean to each and every industry segment. Also, what it could mean to move from BS IV to BS VI emission norms.