The Direct Impact of 'Hidden Road Accidents': Perspectives on the Trucking Industry
In an earlier post, I had made an introduction to a relevant topic on 'Hidden Road Accidents', i.e. road accidents that don't find their way into the official govt. statistics and also remain hidden from the scrutiny of Corporate Supply Chains. The link to that post is below.
In this post and another upcoming one, I shall share interesting insights about the impact of such accidents, both the direct/visible impact (this post) as well as the nuanced repercussions (upcoming post). But first, let’s look at the introductory numbers with regards to trucks/lorries.
Based on empirical data, it is estimated that 'hidden' truck accidents, where at least one of the parties involved is a truck, occur once every 140,000-150,000 kms of movement, which an average Indian truck covers in ~3.4-3.6 years. To further the classification, we focus on those 'hidden' accidents that involve a minimum Damages & Repairs billing of Rs. 100,000.
Direct Economic Impact: Let's understand the impact through numbers
- Based on the above metrices, the Damages & Repairs cost opportunity due to 'hidden' truck accidents is estimated to be Rs. 8,000-12,000 crore per annum. A large proportion of such repairs are done by unorganized garages or unauthorized repair-shops, involving low-quality substitutes of components and materials. Besides being a sheer wastage of economic value in cargo transportation chains (and thus contributing to overall inefficiencies in supply chains), the use of substitute materials risks the future upkeep of trucking assets.
- The second, and equally interesting perspective, is that these accident-trucks spend 7-15 days (a consevative estimate) in the repair-shops / garages. Imagine this: each of these 'hidden' accident-hit truck in the garage has let go of business worth Rs. 30,000-100,000. At a collective level, the fleet industry has lost annualized revenues of at least Rs. 10,000 crores.
The direct economic impact of 'hidden truck accidents' on the Trucking Industry can be summed up from three different perspectives, all of which demonstrate the efficiency-guzzling nature of 'Hidden Road Accidents'.
- The industry loses upwards of Rs. 18,000 crore in direct business value, annually.
- Put differently, the fleet industry brings down its net profitability by 15-18% on account of such 'Hidden' truck accidents.
- and, please digest this: the industry loses ~30,000 driving years of truck trips to these 'hidden accidents', annually. In essence,
- Driver Available, Truck Isn't.
In my upcoming post on 'Hidden Road Accidents', I shall focus on the more nuanced but highly-concerning repercussions of these accidents.
PS - If you found the above interesting, do follow us at:
