It was 17 years after having founded the Nawany Group that the founder and his brother created the transportation division. What began as an industrial construction project in Mumbai in 1981 later expanded into trading cement and distributing it to major clients, viz., Cement Corporation of India and L&T Cement among others, and thus was born the Group’s cement bulker transportation vertical in 1998. Sarada Vishnubhatla puts across questions to Mohit Nawany, Director, ASL Logistics, to find out the Group’s insights during Covid-19, strategy and, future roadmap.
Nawany Group that was co-founded in 1981 by brothers, Ashok and Vinod, today is a name to reckon with in the cement bulker road transportation. With the able next generation now taking up responsible roles alongside the senior management, Nawany Group is today aiming at growing steadfastly, notwithstanding any dampeners – even if it is in the form of the current pandemic, Covid-19.
The Covid-19 pandemic has, at its worst, wreaked havoc on the country’s economy – akin to its detrimental impact on the global economy. The road transportation segment is no different. The damage has been extensive and the challenges are still being faced despite the signs of slow yet definite revival of the market.
Mohit Nawany, Director, ASL Logistics, shares the general fears plaguing the transportation and logistics sector. Yet he is confident that the revival of the market sentiment is soon to happen: “Typically, the robustness of the road transportation sector and the country’s economy work in tandem. Much will depend on the way the road transportation industry recovers and I feel it will mostly be uneven across the sectors. From the cement transportation perspective, we are currently seeing some pre-monsoon pent up demand coming our way. Driver shortage is severe and hence the operating vehicles are doing record-breaking trips. We anticipate that this will taper out in the coming few weeks. In my opinion, the market will return to a certain sense of normalcy by around October 2020. We hope that the virus becomes less destructive by then, but till then I am sure every stakeholder is looking at – first survive and then revive. That is definitely the mantra that we have adopted.”
Driver Attrition – Major Challenge
The attrition rate of truck drivers has always been a challenge across the world but more so in India because of lack of skilled drivers, de-humanized treatment that they are meted out with in general and children of truckers unwilling to become drivers. Covid-19 situation has further worsened the community’s prospects – financially, morally and physically, although ASL Logistics continues to fight hard to keep their drivers happy, healthy and well-provided for in these tough times.
Nawany recounts the challenge: “Apart from the obvious loss of business implications during the lockdown period, about 20% of our vehicles have stood loaded for 8 weeks at a stretch, which has led to damages of a different kind, including loss to the vehicle tyres and such. Then, as the operations slowly resumed in the last few weeks, restricted movement of workforce is creating problems. Attending to highway breakdowns has become a major challenge. Our drivers, like most of their brethren, have been bogged down by the fear of the virus contamination when on the move, coupled with their family concerns and their safety, non-availability of food due to wayside amenities being shut and their migration back to hometowns.”
He explains further: “All our drivers are hired on contractual basis. For the entire lockdown duration, ASL has paid them their regular wages. We are fortunate that we did not have even a single case of drivers getting stranded en route during and due to lockdown. All our drivers have managed to reach either their local homes, our workshops or the cement plants within few hours of the lockdown announcement. And those drivers who were staying at our workshops were provided with food and basic amenities.”
Challenges Galore
Additional challenges include inflated labour charges which ASL is either compelled to absorb or pass on to their customers and the sector being non-conducive to the adoption of digital and social media in operations. While the former challenge may see some mitigation what with reverse migration being hinted at, the latter poses a problem of a different nature.
Nawany explains: “Since this is a B-2-B nature of operation, we have not seen much adoption of digital and social media in our operations. However, we are trying to work closely with all of our clients to incorporate the benefits of technology in changing times. We are constantly pushing them towards e-PODs, freight billing through the system and the like, in an attempt to minimize human interaction and promote paperless transactions.”
Despite challenges, Nawany is ‘bullish’ that in a year’s time, India’s economy will be back on track and well on the road to becoming robust once again.
Counting Blessings
The Nawany Group feels grateful that their loyal team has stood by them in these tough times. He shares: “The situation is unprecedented and so are the challenges that we are facing. We are thankful that it has awakened a hero in each one of us and hence there can be not just one particular story to recount. Our workforce – be it young men or those in mid-50s – have risen to the occasion. Almost all our supervisors made it a point to report back as the transportation was resumed. Most of us have gracefully accepted salary cuts and our drivers are doing an amazing job despite fears.”
He continues: “We have taken up counselling our employees and are providing health insurance of 1 lakh against the pandemic. Currently, we are operating at 50% capacity and we are sure it will only improve from here.”
India – An Attractive Destination
With many major and mid-level global companies planning to shift their manufacturing bases from China to India – a sentiment which seems to have further solidified during Covid-19 pandemic – India surely will see better business days to come. Yet, Nawany feels we will have to strategize in a way to compete better with smaller yet aggressive markets like Taiwan, Vietnam and Indonesia, among others.
Nawany feels: “We surely would attract opportunities yet the scale of such projects reaping returns and benefits will take another 4-5 years organically. I am an ardent believer that the great Indian dream is built on SMEs and ‘jugaad’ entrepreneurship – be it from an economy or an employment standpoint. If the wave of ‘vocal for local’ can pick up momentum and stay, then the SMEs backed by the government will become the driving force. This, of course, is subject to our ability to deliver price and quality.”
The top economies today are advocating localization and India needs to understand this better and take more advantage out of it. And to think that, India logs 30-40% higher logistics cost than the global benchmarked cost.
Nawany thinks the key reasons for this are – a) inefficiency due to substandard road conditions and poor working culture, b) high tax structure and, c) inferior condition of truck drivers. He explains further: “The first point needs to be urgently attended to and work was going on at a war footing prior to Covid-19. The 28% GST on trucks with diesel still not under the GST is a major factor hiking costs. Driver treatment is abysmal in India, and it needs to be reformed while inculcating formal skills in them.”
The Nawany Group salutes the hardworking truck driver community and is gunning for a robust and steady growth of Indian economy and to the road transportation sector.