Indian Trucking Industry - Promising Outlook
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There is always a point of Inflection in every story! And it is this point; post which every journey becomes interesting and accelerating. It marks the end of a normal growth curve; while indicating the beginning of a new era.
GST, Eway Bill and now Fastags have done their part to bring required restructuring in the trucking industry. Moreover, it has successfully changed the end user’s behaviour towards necessity for technology adoption in near future. Add on to this there is a strong prediction of infrastructural changes on National Highways and thereby, a formation of an inflexion point.
To be specific, this is the era, where one would see its restructuring or rather a resurrection. The elephant awakes from lumber and now it is set to run, it is bound to re-align the entire industry, knowing that it forms the backbone of the Indian economy; it will now give wings to a sector long forgotten. It’s time to buckle up and be ready for the biggest opportunities in the making. Here are a few points, which could create differentiation:-
Trucks to Sell with Loaded Business – You must have heard a truck getting sold with 5-year warranty or 2 Lakh km warranty or various AMC combinations, trust me soon these will be options of the past. Product innovation in diesel powertrain is coming to saturation and service offerings are more or less becoming less competitive. In an oversupplied market such as India, availability of business will soon become the key selling proposition. Trucks installed with business finding search engines will soon become a reality in India; Moreover, it will be first in the world which will witness its real success, primarily riding on massive diversity, which we see inherent in our business ecosystem. By the year 2020 or 2021, there are chances that these offerings that would be first limited to intercity geography and then would soon evolve into a pan-country phenomenon.
“Owner-Operator – The Real King” with the evolution of installed business search engines, Driver cum Owner will become the real king of the Indian Trucking Industry. The DCO’s which represents the largest share of truck ownership in India will soon sit on the throne and grab the position it deserved for years. It will be the direct decision maker for every associated parallel business lines to evolve in the sector, be it tires, oil, filters, service centres or for the matter of the fact the Trucks Itself.
Freight Financing – Booking agents lately have played a very critical role in arranging the capital and financing the freight while forming a layer above the DCO’s; while milking on the interest for rotating capital. These had been numerous in number and counts; it should not be a surprise where we see invoice financing houses jumping the guns and throwing their cap in this high margin arena which is up for grabs. Though it is definitely a High-Risk High Margin zone; but the way capital is easily available for larger aggregation there should be no doubt that many new age NBFCs and lending ventures will continue to enter this market; while a few already have. It is not necessary that they will succeed like an agent who generally has its skin in the game; However, they will end up creating the required cushion for DCO’s the become the front-runners.
“Parts, Consumable and the Need for Direct Reach“– OES and OEM have been looking for this time wherein a direct bridge could be established between them and the driver; their wait is about to get over, though definitely not tomorrow, but, it is more visible than ever before. Every major industry has evolved and has seen reforms to ensure a direct connection with the end consumer; This is to believe, has formed the basis of disruption for the majority of new age solutions. Trucking industry had been waiting for its turn. It is believed to soon see Tyres, Lubricants and OES parts suppliers working on avenues to connect directly with the DCO’s and form a long-term bridge of business association with no middleman in between.
If we look back a lot has changed in 3 years; few of the changes for good and few averages, however, it definitely have paved a way for a fantastic future.