A look at the evolving transport landscape in the aftermath of the pandemic

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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A look at the evolving transport landscape in the aftermath of the pandemic

In an exclusive tete-a-tete with ET Insights, Umesh Revankar, Vice Chairman & Managing Director, sheds light on the evolving logistics landscape in India and how the transport ecosystem has seen a slew of changes in the aftermath of the pandemic.

What are some key bottlenecks when it comes to transport finance for single and fleet truck owners? 

The main challenges for financing single vehicle operators are a lack of experience in running the vehicle profitably as an entrepreneur, which we try to strengthen the borrower by insisting on an experienced guarantor that helps the new operator to get the business support and to have peer pressure.  As far as fleet operators are concerned some of them try to over-leverage within a short period and get into challenges of servicing large loans and we need to constantly monitor borrowers and advise them regularly.

How has the ecosystem for transport finance changed in the aftermath of the pandemic? 

The ecosystem of transport finance got disturbed due to lack of wayside amenities such mechanical shops, food courts, restrooms and therefore long-distance driving became a challenge. Even though the economy and supply chain transportation are slowly coming to normalcy, we believe that the Government needs to provide infrastructure on wayside facilities at the right place.  The industry has learnt to do business through digitally-enabled transactions today.

 How do you see the market for truck transport evolve in the country? What are some areas of opportunity? 

Truck transport in India would be a big opportunity as the government is focused on ensuring that make in India manufacturing big success. If the country has to be competitive in the international market, the logistics and supply chain need to be efficient and cost-effective. The infrastructure has to be supportive and of international standards.

As the infrastructure of Air, Railway and sea/river connectivity gets built as per the PM’s “Gati Shakti Yojana”, the dependence on inter modal transportation on the Road transport would grow much faster in the medium term of 5-10 years. All the increased transportation requirement would be forced on Road transport and expect to grow by 15-20% CAGR for the next 5 years.

What steps have you taken to improve accessibility to transport finance? How do you assess STFC’s brand connect? 

We have tried to reach out to transporters by giving a lot of convenient products and services to the customer to keep them on moving across the country without any stoppage   We have introduced fuel credit, tyre loan, insurance loan, working capital loan to enable the vehicle to keep moving and STFC brand get connected with customer all the time as they keep on using service and ecosystem built by STFC throughout.  We are the one stop service provider to the transport Industry.

What market strategies in the past 18 months have helped consolidate your position as a market leader in transport finance?

We kept in touch with customers over phone or physical meeting mostly in petrol pumps and other public places throughout the COVID pandemic period, so that customer became confident in operating the vehicle and their families are being assured that support is continuous. We also supported the customers initial essential requirement during pandemic by free distribution of hand sanitizer, mask, food packets to drivers and also conducted vaccination camp.  We also offered the customer moratorium as per the RBI guidelines, top-up loans through ECLGS offered by the finance ministry, and help the customers manage difficult periods better.  Our focus has been on used CVs as we felt that the ability to service new vehicle loans would be a challenge: Thus we created many campaigns in semi-urban and rural areas.

 

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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