Hyundai takes to shipping route after demonetisation hits truckers

What began as an experiment is emerging as a mainstream logistic option for India’s second-largest car manufacturer Hyundai Motor India (HMIL), precipitated by the Centre’s demonetisation move. The Korean chaebol has said it will use the coastal shipping route to overcome the challenges of truck availability, delays in transit time and uncertainity of road operations.Hyundai has decided to utilise coastal shipping a third time in 2016 with a cargo of 2,500 units to be shipped to Gujarat, NCR and Mumbai on Monday from Kamarajar Port at Ennore near here through Sical Logistics — the only operator so far to test waters through the shipping route as mooted by the Union government.

The firm will also have one more shipping during the month to meet the year-end demand from the dealers, said V Anand, senior general manager (outbound logistics), Hyundai Motor India. Hyundai had earlier in February and September shipped over 2,000 units to Kerala, Gujarat and NCR. In a telephonic interview with FE, Anand said: “The firm has decided to make it a regular affair, effective January 2017, with an average monthly shipping of 4,500-5,000 units.”

Due to demonetisation, there has been a sharp fall in fleet movements across the country. The truckers across India have found it difficult to operate fleets without enough liquidity to meet routine expenses. A recent IFTRT report pointed out that lakhs of trucks could not ply and the rentals plummeted to 30% in November.

Said Anand, “The lessons learnt from the previous trials came in handy to draw up robust alternative domestic shipment channels. HMIL and SICAL got together to put in place an end-to-end delivery plan for deliveries of cars to Gujrat, NCR and Mumbai. The 2,000+ cars, sent over two shipments, could service service 28 dealers in 19 cities across these regions.”

“The longer delivery time notwithstanding, coastal shipping is also eco-friendly and cost-effective. There has been a cost saving of R1,500-R2,000 (depending upon car size) between road and coastal shipping. And whatever benefits we derive out of this route, will be passed onto the customers,” he said.

Hyundai Motor India Ltd.