Meeting the demand for supply – Cover Story News

In ordinary times, the Indian transport and logistics sector sees perhaps 7.5 million trucks, 7,400 freight trains and scores of cargo planes criss-crossing the country every day, alongside millions of vehicles carrying raw materials to factories and goods to grocery shops, supermarkets and customers’ doorsteps. The Union government’s announcement on the evening of March 24 of an almost immediate national lockdown beginning midnight that very night brought all essential supplies to a dead halt. Realising soon, but perhaps not early enough, that this was a disruption India could ill afford, the Centre issued fresh orders next week to clarify that transportation of all goods not even just essentials would be exempt from the lockdown. But by now the human chain of skilled, semi-skilled and unskilled workers that keeps those wheels turning were returning in their droves to the sanctuary of their villages, raising the very real prospect of acute shortages in markets across India in the coming weeks.

This sudden seizure in the country’s economic body has also doubtless further impaired economic growth projections, with ratings agencies raising red flags soon after the lockdown was imposed. On March 26, Crisil slashed its growth forecast for India’s GDP in fiscal 2021 from 5.2 per cent to 3.5 per cent. On March 27, Moody’s Investors Service revised its estimate of growth in the current fiscal to 2.5 per cent, less than half its earlier projection. Experts say the pain will remain for several quarters to come, especially if the government is forced to extend the lockdown beyond the initial 21 days.

At the end of March, as the first week of the lockdown ended, Union minister for railways, Piyush Goyal, and minister for external affairs, S. Jaishankar, got on a call with some of India’s top industrialists to get a sense of the situation on the ground. Participants included Reliance Industries chairman Mukesh Ambani, Kotak Mahindra Bank MD Uday Kotak and Tech Mahindra CEO & MD C.P. Gurnani. Sources say a major point of discussion was how to get freight moving again, with business leaders highlighting the crippling difficulty of transporting even essential goods, talking of truck drivers being harassed by officials and red tape, with cargo of all kinds stuck on highways across the country.

Although Prime Minister Narendra Modi had, while announcing the lockdown, said the government had made provisions to ensure that the supply of essential items continues smoothly, the legal vagueness of essential items’ resulted in transport paralysis. To break the logjam, on March 30, the Union ministry for home affairs (MHA) permitted the transport of all goods without distinction of essential and non-essential’ throughout the country. Highlighting the complexity of economic supply chains and the confusion in administrative processes, the notification even took pains to name specific groceries that were considered essential items, such as hand wash, soaps, disinfectants [and] body wash’, among many others.

There is paralysis across the entire supply chain, says an official with a large fast-moving consumer goods (FMCG) company, asking not to be named. Things were expected to ease up a bit after the clarification from the MHA, but the supply chain cannot be restarted with the push of a button.


While the core of the problem is the COVID-19 pandemic, a major problem relates to the transport sector’s size and complexity. A single major event like a sudden freeze in the movement of vehicles can have consequences that reverberate for days and weeks.

For instance, according to the All India Motor Transport Congress Toll Committee, an apex body of Indian transporters, the sudden announcement of the national lockdown has left 20 per cent of the 7.5 million trucks or 1.5 million stuck on highways and roads across the country. Along with these vehicles were stranded nearly 3 million drivers and helpers. At the time of writing, many long-distance shipments that were en route when the lockdown was announced remain stuck on highways and at toll plazas and petrol pumps across India. The immediate hope is that the MHA’s March 30 notification will unclog these bottlenecks, but this has not yet happened.

How does this affect the movement of goods across India? What is crucial to note is that the Indian transport sector is primarily truck-based, a November 2019 report by Care Ratings estimated that roughly 60 per cent of India’s logistics movement is by road, with 30 per cent by rail. What is also unavoidable is that last-mile transport from railheads to warehouses and markets remains dependent on trucks. India has a total road network of around 6 million km, of which national highways comprise about 114,000 km, and state highways, 175,000 km. The fact that most goods transport takes place by road is borne out by the sector’s contribution to the national GVA (gross value added, a measure of the value of goods and services in the economy). In 2016-17, the transport sector accounted for 4.85 per cent of the country’s GVA , with road transport accounting for 3.12 per cent, railways 0.77 per cent and air transport, 0.16 per cent.

Visible signs of the transport paralysis are there to be seen at the Agriculture Produce and Market Committee (APMC) markets across the country. These markets, dealing in fresh agricultural produce, are normally bustling with activity. However, in the early days of the lockdown, they were deserted, with trucks carrying supplies held up on roads and highways. There are over 2,400 APMC markets in India, of which Maharashtra has over 300. An estimated 500,000 trucks transport perishable items like processed food, vegetables and fruits to these markets from across the country on a daily basis. Now, with truck movement partially restored, shipments have started to trickle in, though levels remain far below normal. For instance, the APMC market in Vashi, Navi Mumbai, normally sees between 400 and 500 trucks arriving daily with farm produce from various parts of Maharashtra. On the morning of April 1, only 80 such trucks had arrived for the day. Some 150 trucks are directly supplying markets in Dadar, Ghatkopar and Byculla in Mumbai, but even these have witnessed abnormal delays.

The Indian Railways has also been transporting essential commodities on freight trains, which meets the needs of bulk transportation. For instance, much of the transport of foodgrains from the Food Corporation of India (FCI), which stockpiles and distributes foodgrains across the country, takes place via rail. As much as 40 million tonnes of foodgrains are transported by the FCI every year, around 85 per cent of which is by rail. The FCI depends on road transport only in areas with poor rail connectivity. A small tonnage of foodgrain is also transported via ships, for instance to the Lakshadweep and Andaman & Nicobar Islands. The FCI owns 98 rail sidings, where foodgrain rakes arrive directly at FCI depots. Reports suggest the FCI is currently focused on supplying grain to food-deficit states like Uttar Pradesh, Bihar and Himachal Pradesh. According to a PIB press release, on April 1, it transported 148,000 metric tonnes of grain to food-deficit states, with a total of nearly 1 million metric tonnes of grain having been transported to various states since March 24.

Another problem is that, as a result of the pandemic, drivers are also now in short supply. Truck drivers now either say that they are unavailable, or unions ask for more money, says the CEO of a leading food company. Underscoring the pain to come, he adds: It will be impossible for companies to pass these added costs on to consumers. Explaining the lack of manpower, Sanjeev Diwan, a prominent truck union leader in Punjab, Chandigarh and Haryana, says that many drivers are not reporting for work because their families are worried, also emphasising the many shipments stuck on Indian highways. And adding to the difficulty of getting road freight moving again is that some state governments have imposed lockdowns of their own. For instance, on March 30, Punjab chief minister Amarinder Singh both extended the Union government’s lockdown in his state to April 14 and directed its borders to be sealed.

Efforts also appear underway to increase cargo flights if only to ensure the movement of essential medical supplies. On March 30, the Union ministry for civil aviation announced that it had been (and would be) requisitioning Air India and Alliance Air aircraft to carry out supply operations across the country’ in coordination with state government requests for medical supplies. As per the announcement, on March 29, an Alliance Air flight from New Delhi carried such supplies to Kolkata, for Guwahati, Dibrugarh and Agartala. On other occasions, shipments of ICMR (Indian Council of Medical Research) Covid-19 kits have been transported to metros like New Delhi and Chennai.

On the commercial side, the picture is more mixed. SpiceJet’s air cargo arm, SpiceXpress, says a major focus in recent days has been the transport of medical good diagnostic kits, face masks, sanitisers and surgical equipment with SpiceJet even repurposing passenger aircraft for cargo to fulfil government transport requisitions. A spokesperson also notes that the firm has faced problems in first-mile pickup and last-mile delivery, saying that regulations on the movement of goods have taken longer than expected to be implemented. SpiceXpress has a fleet of five dedicated freighters criss-crossing the country every day, also flying to countries in West Asia and Southeast Asia with cargos of fresh fruits and vegetables, cold chain medical supplies and medicines. The firm says there has been an uptick in demand for the transport of meat, fresh fruit and vegetables to West Asia from India. The pipeline is now flooded with charter enquiries from across the world, including Korea, Argentina and Canada, adds the spokesperson.


The FMCG sector, one of India’s economic engines, is totally dependent on a healthy transport network. Industry spokespersons talk of huge business disruptions in the first days of the lockdown following the sudden restrictions on the movement of goods and workers.

Mumbai-headquartered Hindustan Unilever, India’s largest FMCG firm, was able to operate only a handful of its 28 factories in the days just before and after the lockdown. To prevent the spread of the virus, local administrations had imposed strict curbs, preventing workers from travelling to and sometimes working at factories. Later, many factories were closed as local authorities issued curfew orders, and, as in Maharashtra, ordered private offices and factories to be closed. Spokespersons from FMCG titan ITC tell a similar story. While we have since then obtained permission [to operate and transport our goods] in some states, the lack of trucks remains a major challenge, says a spokesperson.

This story of frozen supply lines has played out in any number of India’s economic sectors. The sudden lockdown meant that interstate and local truck movement was severely impacted across the country, breaking supply lines and with the added shortage of workers in factories because of the pandemic-induced fears and restrictions, conditions became ripe for confusion in the business ecosystem’.

This was clearly visible in the e-commerce sector. Before March 24, the government’s call for self-quarantining led to a number of people staying home and logging on to e-commerce platforms for their daily (and perhaps panic) buying. As the crisis intensified, platforms like Amazon and Big Basket were reduced to selling only essential goods. Then, on March 25, transport networks froze entirely. Making a quick recovery impossible was the vague regulatory environment while the prime minister had announced that passes would be issued to transporters for essential goods’, no clear administrative protocols to do so were immediately forthcoming. For firms, this meant delayed orders and jammed delivery pipelines.

As a result, e-commerce majors experienced a virtual, prolonged breakdown of business from March 22 to 29. For instance, during the March 22 Janta Curfew, Amazon, Flipkart and Big Basket, despite expecting the surge in demand, found it impossible to complete orders to transport goods from warehouses to customers. In the days between the Janta Curfew and the national lockdown, there was so much confusion every state administration was taking independent decisions on restrictions on movement and transport, says an industry source. Even some district administrations were throwing spanners into the works. Matters have improved somewhat since then: With the increased clarity regarding essential goods, we have decided to deliver only those items, say sources at Amazon India.

Even so, many online vendors report severe problems in completing orders. This is so widespread that Paytm Mall, for instance, has temporarily waived penalties on merchants for cancellations and delays in shipping orders. About 100,000 orders on the platform are pending due to government restrictions. Srinivas Mothey, senior vice president at Paytm Mall, says, [Our] support teams are working hard to ensure that all seller queries are resolved and updated information about order processing is shared regularly.

Even the currently most critical sector pharmaceuticals has not been spared. While the central government’s department of pharmaceuticals issued directives on March 26 to ensure the unobstructed movement of raw material, packing material and manpower’ for the production, packing and distribution’ of drugs and medical devices during the lockdown, experts have questioned its implementation.

RUN AGROUND: On March 26, Mumbai’s Sassoon Dock was largely deserted. Photo: ANSHUMAN POYREKAR/GETTY IMAGES

The Medical Technology Association of India (MTaI), an apex body representing large medical technology firms, says that state governments and local level administrators are not acting in concert with the directives. They seem not to have understood that this 21-day lockdown is to prepare hospitals [and stockpile resources for what is to come], says MTaI chairman Pavan Choudary. He says that trucks carrying vital raw materials remain stuck at city and state borders, and though some manufacturing and warehousing firms have been issued official paperwork exempting their operations from the lockdown, they are caught up in endless litigation with local police and administrative bodies over the movement of their materials.


On March 30, a consortium of CEOs from the food processing industry spoke with Harsimrat Kaur Badal, the Union minister for their industry. They raised a number of issues, such as state authorities not adhering to central guidelines on transport during the lockdown, asking for official directions on the matter to be issued to state police stations. They also say the multiple exemptions and permissions required to reopen factories are an unsustainable burden on the industry.

Other major issues exist as well. For instance, as Rajnish Gupta, an edible oil wholesaler in New Delhi, points out, the production and supply of edible oil is permitted, but not of empty bottles and caps. (This problem also affects industries like pharmaceuticals.) On an average, food processing units have stocks [of packaging materials] for about a week, estimates a CEO from that industry. The non-availability of labour is yet another problem, workers are not reporting to work for fear of the novel coronavirus. Although we are trying to convince workers that we are ensuring the highest standards of social distancing and hygiene, many are not returning, he says.

On March 29, officials from the Prime Minister’s Office briefed the secretary of the ministry for drinking water and sanitation, Parameswaran Iyer, about the setting up of 11 working groups to oversee the government’s crisis response, anchored by Prime Minister Modi’s principal secretary, P.K. Mishra. Iyer, who is known for his execution skills and has worked with the prime minister on the Swachh Bharat initiative, has been assigned the working group on logistics. He heads a team of senior bureaucrats from several major departments, including those of food procurement and public distribution, consumer affairs, border management, the CBDT (Central Board of Direct Taxes) and the NDMA (National Disaster Management Authority), among others. The most critical of his tasks is bringing the food processing sector back online. A measure of how serious this moment is lies in the immediate target, experts say it will be a great success if Iyer’s group can quickly return the sector’s output to even 40 per cent of its capacity.

The issues that Iyer’s group needs to solve are myriad. One major issue to be addressed is that the government needs to quickly create, publish and implement a clear system for exemption papers to be issued to various industries in various states. Some states and local administrations are doing their bit to help, the Delhi Police has said it will expedite transport passes, while the Bengaluru Police has issued guidelines for curfew passes and the Maharashtra government has begun issuing passes and guidelines to transporters.

In the face of the COVID-19 pandemic, the government’s decision to impose a national lockdown has generally been regarded as a necessary evil. However, for the cure to not exact a worse toll than the disease, it is essential that the country’s production and distribution of essential supplies, which rests entirely on a functional transport and logistics sector, remains robust and active. If the looming crisis in the production and supply of these commodities, including food, medicines and medical supplies not addressed on a war footing, the national lockdown will impose an insupportable burden on the nation.

Ready to Go, Unable to Leave

Harishchand Yadav, 55, Driver, Shreya Logistics Mumbai

The national lockdown has come as a nightmare for Uttar Pradesh-based Yadav (in white). His truck has been parked since the announcement on March 24. His employer, Lalit Kumar Pathak, has a fleet of 25 trailer trucks, but all of them are now idle at the firm’s garage at Jasai, near Jawaharlal Nehru Port in Navi Mumbai. No one knows when the textiles, rubber and steel firms that his company works with in cities like Vadodara, Vapi and Silvassa will get back to business. Some of Pathak’s work also relates to agri products, but these shipments were also being frequently stopped at checkposts, leading to the decision to pause operations. Most of my 50 staff are from Uttar Pradesh and Madhya Pradesh. Since they cannot go home, I have to provide for their upkeep, which comes to around Rs 6,000 a day, says Pathak.

A day of absolute chaos

Saurabh Kumar, 36, Founder, Grofers NCR

As soon as the lockdown was announced, there was a complete breakdown of work for a day. Kumar says his delivery agents couldn’t get to warehouses. There was complete chaos, everybody knew that essential services were allowed, but on the ground, there was a lot of confusion on day one. Getting permissions was cumbersome we had to apply in each district we work in and each district had different rules. His business now faces a labour shortage and problems ensuring a supply of goods. Delivery to consumers will get sorted out, but getting raw materials to manufacturers and ensuring manpower and the supply of goods from brands are points of worry. Most brands say they have their supply chains stocked for a month, but if the lockdown is extended, there could be shortages in supplies of essentials. Kumar says that the implementation of a centralised control agency, an online portal for permissions and uniform guidelines across the country would have helped prevent the chaos.

Far from Normal

Sanjeev Diwan, 47, Owner, Chandigarh Indore Roadlines Chandigarh

Diwan’s company is one of the biggest in Chandigarh, operating about 40 trucks. He says that more than 10,000 of his peers’ vehicles are stuck on highways across the country. And many of the drivers and cleaners who have made it back are unwilling to get back behind the wheel. Their families are worried, says Diwan. Long-distance shipments are stranded at various toll plazas and petrol pumps. Stranded drivers have no option but to fend for themselves, but being far from home and without reliable access to even groceries has made life difficult. Worse, since the Punjab government sealed the state borders, movement has become almost impossible.

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