Fluctuating fuel prices have had an impact in the way FMCG and durable makers are transporting goods. Many are shifting to the Railways.
“We are reducing our transportation expenses by moving slowly to the Railways, since it costs one third of surface transport,” says Mr Dinesh Agrawal, Chief Operating Officer, Dhara, the edible oil division of Mother Dairy.
He says in the last one year, 17 per cent of the edible oil business has now shifted from the road network to Railways.
Durable giant Videocon Industries, too, is making the shift. According to Mr Anirudh Dhoot, Director, Videocon industries, “Fuel prices are definitely biting us and therefore we will be increasing our reliance on railways, from less than 10 per cent earlier to approximately 30 per cent.”
Videocon is looking to shift to the rail network for moving goods from Mumbai up to Kerala. “The stretch that we are looking at is the west and the south of India, where we are dominant,” says Mr Dhoot.
Whirlpool is contemplating a move as well. “During peak season, we often switch to Railways. This is not the peak season but considering rising fuel prices, this is definitely a possibility that we are looking at,” says Mr Shantanu Das Gupta, Vice-President, Corporate Affairs & Strategy- Asia South, Whirlpool
Larger Trucks
There are others like Pepsico, which haven't moved to the Railways, but have managed to cut transport costs by moving to bigger trucks. “To counter fuel price rise, we have started using bigger trucks. Earlier we were using 14 feet trucks and now we are more and more using 20 feet trucks, and sometimes even 32 feet trucks. We now use larger containers and have done away with part loads,” says Mr Anoop Sachdev, Vice-President (Marketing), Pepsico. Meanwhile, an official from an MNC chocolate giant told Business Line that factors other than costs influenced its transportation mix. “We also look at which mode of transport reduces our carbon footprint!” he said.