The Hindu Business Line : Overhauling the road sector

A Parliamentary Committee has recommended several measures, including issuance of goods forwarding notes, mutual agreement on fixing the liability in case of loss or damage, punishment for overloading and single registration of all common carriers.

MEASURES ARE being taken to help regulate the unorganised road sector.

In a move aimed at effecting widespread reforms in the commercial road transport sector, a Parliamentary Committee has recommended a slew of measures that include issuance of detailed goods forwarding notes; mutual agreement on fixing the liability in case goods are damaged or lost; stringent punishment for overloading; and single registration of all common carriers or booking agents.

Fixing liability

The Committee has recommended that the liability of the common carriers in case of any loss/damage to consignment or delay in delivery should be limited to the amount mutually agreed upon by the consignor and the common carrier. Moreover, it has said that the mutually agreed upon amount should be reflected in the goods receipt or the forwarding note.

This will ensure that there is no ambiguity on the value of compensation to be paid for the loss of goods. The goods receipt shall include an undertaking by the common carrier about the amount of its liability for the loss or damage of any consignment or delay in delivery, stated the Committee.

Simultaneously, it has also suggested that the common carrier should not be held liable if he proves that the loss of goods/delay in delivery was not due to his fault or neglect. The recommendation is important as the Carriage by Road Bill, 2005 had proposed limiting the liability of the common carrier in case of any damage to goods at Rs 10,000.

No (absolute) limit should be fixed on the liability of common carriers as the latter is fully liable for safe and timely delivery of cargo, irrespective of its value, the Committee was informed by various stakeholders. Also, since the sector is open to market forces, the common carrier can charge higher freight rates where he is expected to take higher liabilities for loss of goods or delay in delivery.

Consignor's declarations

The Committee has said that the consignor should issue a goods forwarding note that declares the value of the goods booked, and whether they are hazardous to human life. "The consignor, who deals with the goods, would be in a better position to declare the nature of goods and it would not be appropriate to shift the burden of verifying the nature of goods to the common carriers," stated the Committee.

Single registration

The Committee has also called for single, all-India registration of all goods booking agents as common carriers, apart from broadening the definition of a common carrier. This is likely to help regulate the highly unorganised road transport sector.

Common carriers would include all players that provide road transportation services through motorised transport, including those who collect, store, forward or distribute goods to be carried by goods carriages under a goods receipt, goods booking companies, contractors, agents, brokers and courier agencies.

Pointing out that the sector is highly unregulated, the Committee has said that despite the importance of the road sector, there is no definite information on the number of common carriers, the share of national cargo they handle, the proportion of taxed and non-taxed cargo they carry or the annual freight charged. It has also called for single registration of a common carrier.

In case the common carriers are found violating norms five times, their registration should be cancelled, it said.