A Case Study of Trucking Operations in Goa http://www.competitioncommission.gov.in/Market_Studies_Research_Projects/CompletedStudies/Link_of_Study1.pdf
Trucking operations in Goa can be categorized into two kinds of operations: * Ore Movements * General Movements Ore Movements Goa is essentially a mining economy. Significant iron ore exports take place from Goa. The major mining companies in Goa are Salgaocar, Sesa Goa and Dempo. These companies utilize the services of various local truck operators. The trucking movements for iron ore take place in the following way; initially trucks carry the ore from the mine pit to refinery and after the ore is processed, it is further carried by trucks from the refineries to the jetties wherefrom they are transported to the Mormugoa port trust for export by means of barges. The mining companies are likely to appoint different operators for these respective movements. The process of selection of truck operators in Goa is quite interesting. There is no formal contract in most cases. Rather; there are agreements between local village panchayats and the mining companies. This is mainly done to keep the vil lage panchayats in good humour so that they would not unnecessarily obstruct trucking m ovements. As per the agreements reached the mining companies offer truck quotas to the village panchayats. Freight rates are determined mainly on basis of bulk de nsity. For instance, pig iron has a higher bulk density than coke. So the operator could load a given volume of pig iron, and also carry additional part-load in the truck, which is not possible in the case of coke. Hence, coke is charged a higher rate as compared to pig iron. Another peculiar feature which emerged from the interviews with various users of trucking services in Goa was that operators tended to charge higher rates if users levied a 128 relatively bigger penalty on theft of ore during transit. Users expressed concern over increasing pilferage of ore during transit. Earlier this was non-existent but is now a common feature owing to the large increase in price of ore in the world market. Pilferage occurred by means of collusion between the truck operators and barge operators. Also, it is very difficult to detect pilferage. For instance, from a truck load of ore, if three chunks of pig iron ore are removed by the operator, it is impossible to detect but could fetch the operator around Rs. 20000. It was revealed that by such relatively 'minor' pilferages, a barge owner managed to export his own barge full of ore to China, where the demand for ore is at its peak owing to the booming economy. The informality in the transactions between operators and users is further emphasized by the way in which price changes are negotiated. Negotiations take place between the truck operators' association and the mine owners' association. An important parameter, which act as a signaling device for price changes, are changes in ore prices in the world market. When price of ore rise in the world market due to greater demand, then the operators expected a part of the increase to be passed on to them in the form of higher freight rates. Conversely, when price of ore falls in the world market, they are willing to cut down freight rates. Entry of new operators in the market for ore movements is highly restricted. As mentioned earlier, the quotas were allotted to various village panchayats. Furthermore, since the movements were of a highly localized nature, i.e. within the limits of Goa, it was virtually impossible for new operators to enter the trucking market. Non-Ore Movements: For the general trucking movements, there existed both large fleet operators of India as well as smaller truck operators. Each of them had their own clientele. The larger operators moved consignments for companies at various industrial estates at Goa whereas the smaller operators moved for the smaller companies as well as catered to individual movements. The larger operators usually entered into rate contracts with the users. The customers who moved larger consignments were given certain rate discounts. Other customers were quoted standard rates. Operators like Transport Corporation of India used a relatively innovative way to get new business in Goa. If a local operator is moving relatively large consignments for a company, the TCI enters into an agreement with the operator. As per the agreement, the operator becomes a franchisee of TCI. While TCI gets an entry into the company's movements, the smaller operator gets to use TCI's brand name to generate new business. The larger operators denied any kind of harassment at the check posts and also claimed that they did not indulge in overloading. However, they did admit to problems at check posts in those States, which levied octroi on goods movements. The smaller operators typically owned between one to five trucks. They got their business either by direct contact with customers or in some cases, used the services of a broker for which they had to pay commission to the broker. The commission was either a fixed rate of Rs 250-300 per consignment or was charged at the rate of 15 paise per kg. Freight was charged at the rate ranging from Rs. 1.30 per Kg to Rs.2 per Kg depending on market conditions. Some of the smaller operators did complain of some harassment at the check posts but admitted overloading only to the extent of two tons over the legally permissible limit. -- _/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/ _/ _/ Frederick Noronha | http://about.me/noronhafrederick | http://goa1556.in _/ P +91-832-2409490 M 9822122436 Twitter @fn Facebook: fredericknoronha _/ Goa,1556 CC shared audio content https://archive.org/details/goa1556 _/ _/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/_/
