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Home > Business > Reuters > Report

Truckers step up strike, shortages feared

April 15, 2003 11:54 IST

Indian truckers stepped up a nationwide strike on Tuesday, in a protest that could threaten supplies of basic commodities and push up prices, the country's biggest truck union said.


"The strike has been strengthened. Dissenting unions have also joined in. People will now feel the pinch," Secretary General of the All India Motor Transport Congress, J M Saksena, told Reuters.


Truckers began a strike on Monday to demand an end to increases in diesel prices, their exclusion from a planned consumption tax due to take effect on June 1, the repeal of an order to scrap 15-year-old trucks and the setting of minimum freight rates.


Saksena said more than 27 lakhs (2.7 million) trucks were losing business worth Rs 1,500 crore (Rs 15 billion) a day.


Trade and industry officials said the strike would affect supplies in two or three days but that retailers, anticipating a shortage of goods, could start raising prices earlier.


"You will see the impact in a day," said Bhim Wadhwa, president of Delhi Transport Association.


He said truckers could not raise freight rates despite a 40 per cent rise in diesel prices in the past two months as they had a 26 per cent surplus capacity and clients refused to pay more.


"Diesel accounted for 30 to 35 per cent of our cost. Now it is 70 to 75 per cent. It is a loss-making business," Wadhwa said.


Tea industry officials said the strike could hit the movement of tea from estates to auction centres.


"In a few days the second flush (harvest) tea would have to be sent to the auction centre and could be impacted if the truck strike is on," S R Choudhary, deputy director of the government-run Tea Board, told Reuters.


Government and industry officials said vegetable prices had risen slightly in some cities but so far there were no shortages.


"Currently we are not able to transport anything. We still hold some inventories with the stockists. We can go through business without being affected for a week," said J Suresh, chief executive officer of packaged foods firm MTR Foods, in  Bangalore, southern India.


In Kolkata, the local truckers' union allowed trucks carrying food to enter on Tuesday out of respect for a local public holiday (Bengali New Year).


"But from tomorrow (Wednesday), these too will join the strike," said Shyamal Dasgupta from the Truck Owners Association of Bengal.

Strike hits industry

Following the nationwide strike by truckers that began on Monday, the Centre said it is ready to cut diesel and petrol prices by over Rs 1.50 a litre. However, state-owned oil firms on Tuesday decreased retail selling price of petrol and diesel by up to Rs 1.08 and Rs 1.18 per litre, respectively, citing global softening of crude prices.

It had earlier considered cutting diesel and petrol prices by about 85 paise a litre after a fall in international crude prices. One of the demands made by the agitating truckers is no cess on diesel.

The strike, called by the All-India Motor Transport Congress, affected many states on Monday and hindered the movement of goods.

The truckers' union claimed around 3 million vehicles were off roads because of the strike.

Reports from various states, including Delhi, Maharashtra, Tamil Nadu, West Bengal and Gujarat, indicated that the union's call to press for its 10-point charter of demands had evoked a good response.

"The strike is total and the response has been overwhelming," the secretary-general of the trucker's union, J M Saksena, said. All over the country, companies said they had been badly affected by the strike.

Saksena said the strike would be withdrawn only if the government made the process of setting diesel prices transparent, repealed the order scrapping 15-year-old vehicles, abolished the toll tax, excluded transporters from the ambit of the value-added tax, controlled overloading and revised the haulage rates for trucks.

The union had sought a meeting with the Minister of State for Road Transport and Highways, B C Khanduri, to resolve these issues.

The road transport and highways ministry said it was ready to talk to the truckers and had initiated talks with them. "It is unfortunate that they have chosen to go on strike when talks were under way," a senior official of the ministry said.

Ashoke Joshi, road transport and highways secretary, had held a series of discussions with representatives of the truckers' union on Friday.

Manufacturers of consumer electronics and consumer durables said they would face  disruptions in production if the strike continued for another two days. Videocon group chairman Venugopal Dhoot said

production at his factories in Maharashtra had stopped since Sunday because of a truckers' strike that began 15 days back in the state. With the strike now becoming nationwide, he feared his factories in other states would face the same problems.

"I have to cease production. I cannot manufacture unless I procure enough inputs," he said.

The clearance of goods at LG Electronics' Greater Noida factory today slipped by 7 per cent, company officials said. Loading continued through the night.

"We are better poised because our primaries (sales at the retail end) are moving very swiftly. But when the prices of essential commodities increase, our primaries will be affected," S N Rai, general manager (commercial and logistics), LG Electronics India, said.

Several other manufacturers in and around Delhi reported that truckers associations had warned them not to load trucks.

"This strike comes immediately after the inventory pile-up in March because of dealers not lifting stocks in the confusion over VAT.

If the strike continues, we may have to trim or even cease production," the director of an FMCG company in the national capital region said.

Meanwhile, oil companies said the strike would have only a limited impact on the movement of petroleum products, and that if it continued for more than a week.

With pipelines taking care of  more than 33 per cent of the movement of oil products and another 33 per cent transported by rail, only 33 per cent of petroleum products are moved by road.

Of the estimated 1,03,289 thousand metric tonne (tmt) of petroleum products consumed in the country every year, only 33,000 tmt is carried by road tankers.

"These tankers are not unionised and are therefore unlikely to take part in the strike," a former office bearer of the trucker's union said. Only places like Tripura, where petroleum products are moved entirely by road, would feel the impact of a prolonged strike.

Maharashtra: In Mumbai, the truckers' agitation badly affected pharmaceutical companies. Yogin Majumdar, president of the Indian Drug Manufacturers' Association, said: "Exports have been affected, especially those of high-value drugs with short shelf-lives."

Industry sources added there could be a shortage of drugs in certain pockets because retail druggists did not maintain very large stocks.

Delhi: In Delhi, the movement of essential commodities like medicines, fruits, vegetables and fuel was hampered but there were no reports of any scarcity, Delhi government officials said.

"If the strike continues, the effect, in terms of shortages of essential items, would be felt only over the next three to four days," an official said. Delhi and Haryana have evoked the Essential Services Maintenance Act to prevent a shortage of essential items.

The Delhi government said a large body of farmers would be supplying their produce using mini lorries and tractors. Delhi transport minister Ajay Makan said the government had taken steps to stock essential commodities but perishable items could fall short as Delhi largely depended on neighbouring states for vegetables, fruits and milk.

Delhi has around 1,18,000 registered heavy commercial vehicles. Around 25,000 vehicles pass through the city every day.

West Bengal: In West Bengal, Subhojyoti Ghosh, general-secretary of the Truck Owners' Association of Bengal, claimed over 90 per cent of trucks in the state participated in the strike.

"Loading and unloading of goods has virtually stopped," he said. Ghosh said most the inter-state trucks had been grounded and a few which arrived in Kolkata in the morning were allowed to unload. "But there will be no more unloading from Tuesday," he added.

Tamil Nadu: Tamil Nadu saw the wholesale prices of fruits and vegetables increasing by 30 to 50 per cent. M Thiyagarajan, president, Periyaar Market MMC Licensed Traders Association, said: "The price of tomatoes has gone up from Rs 6 per kg on Saturday to Rs 8 per kg. The price of drumsticks has risen from Rs 6 per kg to Rs 10 per kg in the last two days. This is despite receiving 300 truckloads of vegetables today, against the usual 200 trucks on any given day."

K Devaraj, secretary, Chennai Flower Traders and Commission Agents Association, said: "The daily supply of flowers from Dindugal, Theni, Hosur, Salem and Krishnagiri to Chennai will now come to a halt. Even bus operators from these regions have been told by the truck owners not to carry any flowers to Chennai."

Close to 200,000 trucks ply in Tamil Nadu. On an average, about 2 million tonne of goods move in and out of the state.

Sujit Kumar, chief executive officer, Eagle Speed Service, said: "Assuming an average business of even Rs 4,000 per truck, we are talking about Rs 80 crore (Rs 800 million) worth of transport business lost for every day of strike."

Karnataka: In Karnataka, state transport commissioner T Thimmegowda said the strike had had 90 per cent success, with a few trucks plying in the state, although the Karnataka Lorry Owners Association said the first day of the strike was a '100 per cent success.'

Reddy said nearly 1,700,000 lorries went off roads in the state. He said that the state's truckers would continue with the strike till demands were met even if it was called off at the national level.

Andhra Pradesh: In Andhra Pradesh, road transport activity was paralysed with 1,75,000 trucks joining the strike.

The state government appointed a nodal officer at the state level and opened control rooms in all districts to monitor the situation.

Chief Minister N Chandrababu Naidu instructed the state road transport corporation to put its vehicles at the disposal of the district collectors to transport essential goods.

The impact

  • Videocon chairman Venugopal Dhoot said production at his factories in Maharashtra had stopped since Sunday.
  • The clearance of goods at LG Electronics' Greater Noida factory slipped by 7 per cent.
  • The strike is expected to have only a limited impact on the movement of petroleum products. Of the estimated 1,03,289 thousand metric tonne of petroleum products consumed in the country every year, only 33,000 tmt is carried by road.

Additional inputs: Business Standard

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