Ramesh Kumar
Things are not that bad as is made out to be by the Opposition and critics of the NDA government as it enters Year 4.
Hindustan Times' story this morning points out that the March 2017 quarter net sales have gone, even while net profit has not kept pace.
That's fine. Net sales rise invariably points to more delivery dispatches to market shelves. That is to say, lot of movement on road, rail or perhaps air even. Am sure, mostly via road given its dominance. That's a big plus for transport segment.
Higher net sales as well signifies higher production. Simple logic: how can you sell, unless you produce more. One may ask: what about built up inventory. Let's remember that the good old inventory management is passe. No sensible corporate stocks for months together keeping higher cost of holding.
If production is comparatively high, it as well means more inbound of raw materials/components. Again, more transportation from vendors to manufacturing site.
Of course, transporters/fleet owners might cry hoarse that their earnings are flat with no rise in freight rates. This anomaly is their own making. How? Demand supply mismatch. Too many trucks chasing too few consignments and the resultant hectic dog-eating-dog competitive environment among the most unorganized transport segment.
There is movement of raw materials/components. And there is movement of finished goods. More, that is.
This higher production has a cascading effect: higher energy consumption. So higher power generation wherever. Someone is producing power which again demands its own production needs.
Now, move to 3PLs/4PLs. More job managing in executing production planning goals and delivery scheduels at manufacturing zones. Again more activity at remote warehouses: docking, crossdocking of higher payload vehicles from manufacturing plants or mother warehouses and last mile delivery to wholesalers and or retailers.
Let us not ignore the impact on oil marketing companies. More movement literally translates into higher fuel buy.
And more income for toll managers on highways.
Greater movement as well means more money in the pockets of everyone directly or indirectly.
For me, this Hindustan News is a Big Positive.
What about destocking on the eve of GST roll out? Will it not impact sale and therefore, production and down the line activities? Unlikely, if analysts are to be believed. Trade is being convinced of the maker willing to take a hit in case of any GST shortfall.
