The Hindu Business Line : Chennai transporters to insist on transit insurance — Not to accept goods sans cover from May 1

THE Chennai Goods Transport Association (CGTA) members will not accept consignment from any of its customers (big or small) from May 1 without adequate transit insurance cover for the goods carried by them.

The association is also making representations to the Centre to make transit insurance coverage for goods compulsory either by the consigner or by the consignee.

Talking to newspersons here, the association President, Mr K.M. Narasimhan, said highway robbery was on the increase in the Chennai region and the transporters had lost heavily due to cargo theft. In the last two years, goods worth about Rs 10 crore had been lost in around 70 cases of robbery. Repeated requests to customers to cover transit insurance for the goods had not yielded any results driving transport companies out of business, he added.

The CGTA urged its customers to compensate transporters for the increase in the diesel cost, which had gone up by about 35 per cent in the last one year. The association, which had about 250 members operating about 5,000 trucks, had also formulated a new formula to cover the diesel cost, he said.

Accordingly, for any increase in diesel price of up to Re 1, the customer should allow for an increase of five per cent in the existing booking freight in future. The transporters would bear the burden if the price increase were less than Re 1. The transporters would reduce the freight rate by five per cent if the diesel price came down by Re 1 a litre. The marginal increase in the freight cost would keep the transport industry on the road, he said.

According to Mr Narasimhan, despite the diesel hike in the last one year, the transporters had not been compensated adequately. Customers take shelter under the annual contract, which did not allow for any cost escalation. Repeated pleas from transport companies and the association had not yielded any positive response from the customers and the road transport users so far, he said.

When asked whether the members would follow the association's decision as they would not like to lose any customer, Mr Narasimhan said, "we are all in shambles nearing dead-end of the road. It is a critical moment for us and the members do not have a choice but to adopt the association's decision, which was fair".

The association has urged the Tamil Nadu Government to provide adequate parking space outside the city limits for trucks. This followed a ban on entry of heavy trucks inside the city during daytime. The heavy vehicles were allowed between 9 pm and 7 am at which time the consignment receivers do not work, he said.

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