In an exclusive tete-a-tete, Umesh Ravenkar, 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.
Expecting the unexpected seems to be an integral part of the playbook across industries. And, along with the other industries, the logistics sector is gradually awakening to a new challenges in a post-pandemic world. The transport business saw several disruptions due to imposed lockdowns, yet with the support of key players, it managed to thrive, adapting to the evolving patterns in the sector.
Umesh Ravenkar, Shriram Transport Finance Company, 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. He believes that the future of logistics will see a shift in truck transport, improved accessibility to financing, and the impact of the digital revolution.
What are some key bottlenecks when it comes to transport finance for single and fleet truck owners?
The main challenge for financing single-vehicle operators is the lack of experience in running the vehicle profitably as an entrepreneur, which we try to strengthen by insisting on an experienced guarantor that helps the new operator get the business support and have peer pressure. As far as fleet operators are concerned, some of them try to over-leverage within a short period and get into the challenges of servicing large loans; thus 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 has been disturbed due to a lack of wayside amenities such as mechanical shops, food courts, restrooms and therefore long-distance driving got into challenges. Even though the economy and supply chain, transportation is slowly coming back to normalcy, we believe the government needs to provide adequate infrastructure for wayside facilities at the right place. The industry has learned to do business through digitally-enabled transactions and that is helpful.
How do you see the market for truck transport evolve in the country? What are some areas of opportunity?
Truck transport in India could be seen as a big opportunity as the government is focused on making manufacturing a big success. To compete in the international market, the logistics and supply chains need to be efficient and cost-effective. The infrastructure must be supportive and of international standards.
Air, railways and sea/river connectivity will get a boost per the PM’s “Gati Shakti Yojana”, hence the dependence on intermodal transportation in road transport would grow much faster in the medium term of 5-10 years. All the increased transportation requirements 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?
Our range of convenient products and services is targeted to the transport business to keep them moving across the country without any stoppage. We have introduced fuel credit, tyre loans, insurance, loans, working capital loans to enable the vehicle to keep moving and the STFC brand is connected with customers, 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 the phone or conducted physical meetings, mostly in petrol pumps and other public places throughout the COVID period, to ensure that the customers were confident in operating vehicles along with assurance to families of our continued support. We also supported the customer’s initial essential requirements during the pandemic by free distribution of hand sanitizers, masks, food packets to drivers and also conducted a vaccination camp. We also offered the customer, a moratorium as per the RBI guidelines, top-up loans through ECLGS offered by the finance ministry and helped customers manage difficult periods better. Our focus was on used CVs, as we felt that the ability to serve new vehicle loans would be a challenge and hence, created many campaigns in semi-urban and rural areas.
