Waking up early to reach D-Mart Thane before 7 AM and stand in queue to get a token when it is being distributed is one of the chores of 55 year-old Arvind Ganatra, a senior level management professional. On an average around 800 tokens are given out and the timing to come to the store based on the number of the token is mentioned. For Ganatra, it was 9 AM on a Tuesday. So he went back home, and returned a few minutes before the time given. “The discounts and the freebies have diminished considerably,” he said to Free Press Journal. “I just pick up the essentials and some snacks for the children and rush out as I have to start work once I go back home,” he said. The female members of the family cannot be sent to the shops out of fear of the pandemic.
Unlike the first time around, when consumers were hoarding as they were caught in a never-before experienced situation of a complete lockdown, this time around they have become wiser. Logistics is working and essential goods are being supplied.
However, the second surge of COVID-19 and lockdowns and restrictions in some states is going to hit consumers hard. The rise in petrol prices, the lack of adequate people in the logistics sector and manufacturing being impacted by the rising number of COVID-affected will make the price of daily essentials go up. Though the supplies are enough in the market, these will last for a fortnight or slightly more, said a distributor.
BK Rao, senior category head-marketing, Parle Products, said prices of almost every item has gone up. “Cardboard carton prices have shot up 25-30 percent. Laminates are up 15 to 20 percent and all this will have an overall impact. Fuel prices have gone up. We are trying to absorb prices. But in June or July, prices of snacks—namkeens, chips, etc will go up 7-8 percent,” he said.
Some of the suppliers have resorted to buying raw material directly from the source. Angshu Mallick, deputy CEO, Adani Wilmar Limited said though though the company procures material directly from the mandis, the situation is a bit stressful this month, he said. “April was much better than May. But most of the mandis now operate only on alternate days and often even when open, either the brokers or the labourers are not fit and hence, work is getting slow”, he said.
The price of petrol and diesel has been hiked for as many as six times in May making it their highest-ever across the country. This will have an impact on logistics. The Indian road transport sector carries goods worth $150 billion a year, which means about $12 billion of business is done per month. The truck fleet utilisation had peaked to 85 percent in March, which was better than the pre-COVID levels, but has now dropped to 70 percent. Truckers will be hard-pressed to pay back their EMIs, said an analyst.
With lockdowns and restrictions, there is a limitation of working hours. Loading, unloading and despatch have to be done in these limited hours. Given the rise in COVID cases, a large number of labour having moved back to the villages, the issues are many. Localized rules and regulations unlike last year’s national policy for e-commerce deliveries is also leading to chaos, said logistic firms.
The concerns are not just about supply chain alone. Timely procurement of raw materials is an issue at the manufacturing stage and the scarcity thus caused impacts the price of goods. “At any given time, around 30 percent of the pipeline is not really active. Some factory or the other is under stress or either workers are positive or manufacturer or supervisor. Contract manufacturing is affected. Even if you are able to produce, from factory to depots—transfer of goods are posing certain challenges with labour shortage and coupled with rise in fuel prices, prices of essential products are bound,” said Rao of Parle.
A few logistics firms shared the issues they were facing during the second COVID wave. The key issue that the logistics industry is facing is of shortage/unavailability of manpower. In the second wave the infection is more widespread and the workforce is either battling with the infection themselves or attending to immediate family members who are COVID-infected, said Vivek Juneja, Founder and Managing Director, Varuna Group. “These issue is further amplified by the inherent fear especially within the blue collar workforce due to shortage of vaccine in the country. Even if vaccines are available they are not equipped to use the CoWin portal and hence remain one of the most affected frontline workers,” he said.
The rapid spread of COVID has changed the graph for logistic industry. The employer is worried about employee safety as the manpower shortage continues. But even drivers hesitate from undertaking long distance trips – due to risk as well sudden lock-downs and absence of return load , said Anjani Mandal, CEO, Fortigo Logistics. Consequently, long-distance route trucks are in short-supply and this is not expected to change soon. – owing to risk and lock-downs / reduced capacity in factories at short-notice which in turn is Covid-related or labour shortage, he said.
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