SC's order can have `weighty' problems

print   ·  
HEAVYWEIGHTS MUST keep off the road. K. K. Mustafah
HEAVYWEIGHTS MUST keep off the road. K. K. Mustafah

Raja Simhan T. E.

The Supreme Court order on restricting truck overloading is likely to have far-reaching consequences for the domestic truck and shipping industries. The restriction will increase cost of road transportation by 25-30 per cent and, in turn, shipping freight cost for consignees, say industry sources.

Court order

The Court on November 9 said permitting overloading of trucks by nine State governments on payment of specified charges was a violation of the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rule, 1989. Overloading should not only be stopped immediately but also overloaded cargo should be offloaded at the point of penalty, the cost of which has to be borne by transporters.

American President Lines (APL), a global shipping line, said Indian authorities will be laying extra emphasis on enforcing the Motor Vehicles Act. They will enforce a limit of 23 tonnes for containers to be transported by road, says an APL trade notice on its Web site.

Shippers should, therefore, ensure that all containers (20 ft, 40 ft or alternative sizes) do not exceed a gross weight, including container and cargoes of 23 tonnes. Containers landing at Indian destinations in excess of this limit will be delayed by the authorities until the weight is reduced for road transport. "If this occurs, it will be necessary to charge all additional costs incurred from this to your or your consignee's account as appropriate," the line said.

The Central Warehousing Corporation, a Government of India undertaking, said that in case of containers having 23 tonnes or above, it would not be liable to move the boxes in view of provisions of the Motor Vehicle Act. The Nhava Sheva Container Operators Welfare Association said that in India the vehicle with the highest payload is a Volvo with a capacity of 31 tonne on triple axle. This means that no transporter will be allowed to carry 2x20 ft loaded containers, given that almost all 20ft loaded containers are above 18 tonnes each. And, given the economics, no transporter will acquire Volvos to transport one 20ft loaded container from the container yard to the freight station and vice-versa, the association said in a trade notice.

Consequences to trade

The court's judgement will have serious consequences for the entire trade. As transporters, the association members will be able to carry only one 20 ft loaded container on a 40ft trailer and this, obviously, means that the rates of the transportation will be the same as 40ft loaded containers. It is imperative that these guidelines are strictly adhered to, because in the event of the vehicle being caught with an overloaded container, the vehicle along with the container will be held by the authorities to reduce the weight. The penalties by the transport authorities will be recovered from the trade, the association said.

The Mumbai and Nhava-Sheva Ship Agents Association said the weight limits would affect one-fourth of 20ft container traffic through the Jawaharlal Nehru Port, and a little more than a fourth of the 40ft of imports and almost half the 40ft of exports. The weight restrictions would not apply only to rail transport, but also once the containers are discharged at the inland container depot.

In effect, the weight limits would apply to all containers being exported to and imported from India, the association said.

Impact analysis

An impact analysis on the Supreme Court's order by Crisil Research and Information Services Ltd (CRIS INFAC), provider of business analysis and options, says that freight rates would reduce in the medium term from the current high levels and a one-time additional demand would benefit the commercial vehicles industry within the next six-eight months.

This additional demand will be in the range of 15,000-28,000 medium and heavy commercial vehicles.

India is in the midst of building national highways under the National Highway Development Programme entailing an investment of Rs 1,60,000 crore in the next five-seven years. The Golden Quadrilateral, and the East-West and North-South corridors are also under construction.

These highways, which are being built with huge investments, are expected to last for 10-12 years.

However, even a 10 per cent overloading of goods carriage in excess of the prescribed weight can reduce the life of roads and highways by 35 per cent, the report said.

(This article was published in the Business Line print edition dated April 17, 2006)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.



Recent Article in Today's Paper

‘It’s time for a rate cut’

Ahead of the Reserve Bank of India’s (RBI) monetary policy review on June 2, Finance Minister Arun Jaitley said the time is right... »

Comments to: Copyright © 2015, The Hindu Business Line.