Despite easing of lockdown, logistics remains a paint point for FMCG firms

Faced with such challenges, FMCG companies are increasingly partnering with delivery platforms and aggregators for availability and delivery of products to consumers.
The movement of goods continues to be the pain point for FMCG companies that have drawn up plans to improve operations this month once the easing of the lockdown comes into force.

According to the Federation of West Bengal Truck Operators’ Association (FWBTOA), truck availability has improved only marginally, at around 10 per cent out of a total vehicle count of nine million pan-India. When the lockdown had kicked in, truck availability was eight per cent.

“The availability of trucks is improving with each passing day, but it is still a struggle given the continued shortage of drivers and vehicles,” said Shahrukh Khan, executive director–operations at Dabur India Ltd.

Harsh Agarwal, director at Emami Ltd seconded his views, saying, “While truck shortage may have improved marginally, it needs to improve further still. The manpower situation too is better now and we expect it to improve further as and when some relaxation is introduced by the government."

Officials from the fast moving consumer goods (FMCG) industry and sectors such as cement said that movement of trucks is restricted owing to the containment measures in red zones. Such zones fall on major routes to ferry goods from one corner to the other.

“While factory areas are mostly in green zones, there are quite a few red zones, where movement is extremely restricted, that fall on the route truckers take to cart the goods to the market. It is here that the major logistical challenge is coming up,” an official from the FMCG sector said.

Large FCMG players such as HUL, ITC, Marico, Nestle and Emami have resumed operations at most of their plants and have plans to scale up operations in the near term.

“Most of our manufacturing units have commenced the production and the operations are scaled up considerably. Even though few units continue to grapple with local restrictions and labour unavailability, we are optimistic that the situation will progressively improve over the course of time”, a Marico spokesperson said.

Sajal Ghosh, general secretary at FWBTOA said that there is a serious shortage of drivers as most of them have returned home and are unwilling to come back until the situation eases.

“Moreover, despite a Central government notification asking states to honour passes issued by a state, the police are unwilling across different states which is posing a major problem in movement of goods. Obtaining travel permits at every district level in a route is a tiresome process”, Ghosh said.

Sector officials opined that considerable amount of power on movement and logistics, has been given at the micro-level, right to the Panchayats to enforce the lockdown. “That is where the problem has been cropping up as each Panchayat is taking its own decisions based on the Covid-19 situation and thus seamless logistical movement is getting affected”, a sector official said.

Faced with such challenges, FMCG companies are increasingly partnering with delivery platforms and aggregators for availability and delivery of products to consumers.

Marico has also introduced tele-servicing and an app for retailers which enables retail partners to feed in their requirement digitally or through a phone call.

Under a challenging scenario prevalent even now, market tracker Nielsen expects FMCG industry growth for second half of 2020 to be in the range of 5–6 per cent which is marginally higher than the growth rate in the first half of the 2020 calendar year.

  • Truck availability as per FWBTOA stands at 10% of 90 lakh trucks
  • Trucks are majorly routed to carry medicine, PDS items, clear port consignments
  • Few trucks available for FMCG companies’ disposal
  • FMCG companies are keen to scale up production

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