More Truck For The Road
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Image: Vikas Khot
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BUILDING MUSCLE Siddhi Vinayak's Baid shows off his new trucks
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n the 8th day of the 8th month of the year 1988, AMN 2388, a Tata Motors 1616 truck carrying petroleum blew up somewhere in West Bengal. Such was the impact of the explosion that the railway bridge against which the vehicle collided came crashing down. Molten iron and 42 dead people lay there in a heap.
R.C. Baid can never forget that day. It was his second day in office. And AMN 2388 was one of the first trucks he had bought, from his savings, to start his own road transport business. The accident threatened to close down his venture.
Indian Railways sued Baid. The claim passed on to the insurers, New India Assurance. New India, in turn, sued the Public Works Department (PWD) claiming that the speed breaker on the location was too high and too close to the bridge. The PWD, in turn, sued Indian Railways claiming that the bridge was too low and that had caused the accident. As things turned out, Indian Railways didn’t pursue the litigation and Baid survived.
For someone who started off literally with a bang, Baid, 49, has made a lot of quiet progress. Siddhi Vinayak Logistics, a company founded by him in Surat, owns a fleet of more than 1,500 trucks. He has 20 of the top 30 blue chips as his clients: Tata Motors, Tata Steel, Essar Steel, Bharat Petroleum and Mahindra & Mahindra (M&M) are just some of them. And Baid says the privately owned Siddhi Vinayak crossed a net turnover of Rs. 200 crore last year.
But his beginnings were humble enough. Baid never went to school and got married at the age of 16. Like businessmen of a bygone era, he travels everywhere with a briefcase, speaking in broken English. He is also addicted to chewing tobacco. Two hours into our meeting and chewing his fifth dose of tobacco, he admits, “I am diabetic, suffer from high blood pressure and have problems sleeping at night.” Not the type of guy you would associate with the big transformation that the Indian road transport sector is witnessing today. The truth is, Baid is one of the handful of logistics businessmen driving that change.
For long, India’s truckers thought small. They operated low horsepower (HP) trucks that could cover no more than 300 kilometres a day. Even though India’s booming industrial growth created a demand for faster, more powerful vehicles so that raw materials could reach factories and finished goods reach consumers on time, the country’s abysmal road infrastructure wasn’t ready for the upgrade. The logistics industry is also fragmented and most of them are small players with limited capital. Repeated attempts by vehicle makers to launch super trucks have failed.
But Baid and a select few truckers are demonstrating that the time for the upgrade has come. Late in 2009, Baid ordered 100 trucks from Tata Motors at 285 HP and Rs. 31 lakh price tag each. By going in for trucks 60 percent more powerful than the ones already in his fleet, he was taking a big risk. The upfront investment and the costs of operation would rise significantly. This is the fear that holds back smaller truckers from experimenting with such heavy pulling vehicles. But then, why did Baid decided to take the plunge.
Baid says he hopes to recover his investment by running more trips with these faster and more powerful trucks. The roads have improved, especially in the last two years, and the industry is quite willing to pay a premium for faster delivery. If Baid succeeds, there is no reason why hundreds of other truckers won’t follow. Truck makers have already begun to respond to this unfolding change.
The Green Signal
Modern trucks with new engines, air-conditioned cabins and power above 250 HP are nothing radical or new. Multinationals like Volvo have tried introducing them in India before. But, the market wasn’t ready. “When we entered India more than a decade ago, we found that the infrastructure was not ready for high performance trucks. Which is the reason why the need for a niche market was felt and Volvo entered applications like mining and over dimensional cargo,” says Milind Kulkarni, who manages brand and communication at Volvo Trucks India.
A lot has changed since then. And heavy commercial vehicle makers believe that this is just about the right time to raise the bar. “Modernization is happening across all portfolios of life. In commercial vehicles also it was in a sense due. It’s just that here the dynamics are around operating economics and profitability. So you needed a certain environment of cargo or high-tonnage mining operation where high horse power trucks are required and then you need the infrastructure in terms of roads for them to be justified,” says Ravi Pisharody, president for commercial vehicles at Tata Motors.
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