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Will MHA directive on cargo movement ease supply chain woes?

By invoking the Disaster Management Act while announcing the nationwide lockdown, MHA brought out guidelines on the measures to be taken by different ministries and state governments to contain COVID-19, which it modified several times later

Rukmini Rao   New Delhi     Last Updated: April 13, 2020  | 19:35 IST
Will MHA directive on cargo movement ease supply chain woes?
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  • MHA directive reiterates states to allow both essential and non essential cargo movement
  • Empty trucks to be allowed to pick up stuff or return after delivery

With stocks of packaged food depleting and farmers across India stranded with market-ready produce, the consumers, producers and logistics players are fighting a bureaucratic battle to keep India stocked up and fed in the times of COVID-19 lockdown. In its latest directive, the Ministry of Home Affairs reiterated that state governments should facilitate inter-state and intra-state movement of all trucks and other goods carriers without any permit or approval as long as the driver has a valid driving licence.

It also directs the states that empty trucks and good carriers should also be allowed to operate while on the way to pick up goods or returning after the empty delivery. This is subject to strict adherence to hygiene and social distancing. The direction comes after logistics operators complained about trucks getting stranded at state borders and also movement of drivers and authorisation that most state governments were asking for to let the consignments pass through the state borders.

Essential versus non-essential

By invoking the Disaster Management Act while announcing the nationwide lockdown, MHA  brought out guidelines on the measures to be taken by different ministries and state governments to contain COVID-19, which it modified several times later. The consolidated list of such directions shows that industrial establishment can be open except the manufacturing units of packaging material for food items, drugs, pharmaceutical and medical devices, manufacturing units of essential goods including the drugs , pharmaceutical medical devices and their raw material and intermediaries, among others.

However, most states, while trying their best to contain the pandemic with limited resources, are taking a final call on what to allow into the state or district in times of a lockdown.

"Making a distinction between essential and non-essential goods for the purposes of the guidelines under the Disaster Management Act has caused problems because the law does not have the definitions of these terms, nor does it have any provisions relating to the maintenance of supply chains during a lockdown or a disaster," says Alok Prasanna Kumar, Senior Resident Fellow at Vidhi Legal.

"The fundamental problem was that guidelines to limit movement of persons have been unthinkingly applied to movement of goods creating an acute shortage of all goods," he added.

Rivigo's co-founder Gazal Kalra cites how the ambiguity even in food items are posing a huge operational problem. "For example, we had five consignment of apples which was already in transit when the lockdown was implemented and it was stopped at one of the state borders where it rotted away since it was not considered essential by that state," she said.  With the new directive explicitly reiterating that states should allow movement of trucks whether containing essential goods or not, it could ease some pain.

Farmers' woes to continue?

Pushkar Singh, CEO and co-founder of LetsTransport , an online truck aggregator start-up  says what is happening at the farm sector is currently a supply demand mismatch. "With a limited reach of start-ups to farmers, if the government can help in reaching out the farmers with their database and also on-boarding them, there are enough tech-based solutions that can be used to mitigate their losses," says Pushkar. 

On the supply chain side, Gazal says if the agri supply chain has to be balanced then certain materials will also have to be opened up. "Food and vegetables are high value consignments with short shelf-life," she says. So, unless the freight network can be balanced, costs are bound to shoot up like it already has with truckers making empty return trips.

Om Routray, VP at  Source Trace which provides SaaS-based solution to agri value chain says the immediate concern is around getting the produce to the market and assuring agri inputs with sowing season just around the corner. "The implementation of Centre's directives at the state and local bodies level should be ensured," says Om. "Farmers who have farm labour and want to resume work with necessary  precautionary measures want authorities to allow them to work," he added.

Also Read: Coronavirus lockdown: Auto sales crash 45% in March; commercial vehicles worst hit

Also Read: Coronavirus outbreak: Which states have announced lockdown extension?

Also Read: 'Help or we will die': Auto dealers send SOS to PM Modi amid coronavirus lockdown

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