Higher cost due to longer transit time is plaguing manufacturing industry in the southern region, according to a study conducted by A F Ferguson & Co.
The difference between ideal and actual time for a trip across key locations in southern region is six to seven hours. The manufacturing industry in the region is losing around Rs 300-Rs 400 crore (Rs 3-4 billion) of the value of the goods transported per annum due to delay in transit time.
The difference between actual and ideal transportation time between Chennai and Coimbatore is eight hours, Coimbatore and Hyderabad is 24 hours and Chennai and Ernakulam is 18 hours, according to the study.
The average speed of cargo movement in the region is 24 km per hour while the average time delay due to traffic jam and waiting at check posts is 30 per cent of the total journey time.
"Too many check posts choke the movement of goods, leading to a higher transit time," says Mallika Srinivasan, chairperson, infrastructure sub-committee, Confederation of Indian Industry-Southern Region and director, TAFE Ltd.
Operational issues including poor maintenance of vehicles, unguarded highways passing through villages, schools, and strikes; and infrastructure issues including an increasing number of railway crossings, narrow bridges on highways, and sub-optimal road quality enhance the delay, the study says.
A 30 per cent reduction in transit time would mean that the industry might need about 140,000 fewer trucks to move the goods. Reduced number of trucks would also mean less choking in highways and reduction in pollution, according to the study.
"Implementation of value added tax may help address some of the transit delay issues, but the provision of entry tax could nullify the advantage achieved through VAT," says Mallika.
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