Handle With Care Or Pay

Posted on March 13, 2011 | Author: Sunanda Poduwal | View 991

A new law that imposes penalties on movers and packers for damaged goods draws mixed reactions from the industry

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ARCHANA Chaudhury,a 33-year-old freelance writer,moved to Delhi from Mumbai in June 2010 by hiring a mover and packer.She has unpacked every box of her belongings except one,which has a Tanpura in it.She doesnt have the heart to open it as she believes her music instrument is damaged.Archana says the moving company gave her grief.A few household items were damaged,the delivery was late and to add insult to injury,the workers were rude.
Help has arrived in the form of a new rule that makes goods transport agents and courier firms across the country accountable for any loss or damage to goods or documents in transit.Under the Road Transport Ministrys Carriage by Road Rules 2011 notified on March 1,a packing firm is liable to pay 12 times the freight charge as penalty to the customer.There is finally scope for compensation for customers like Archana who have at least one bad experience with packing firms to recount.

Despite the notoriety for lax service,movers and packers are ubiquitous in every city.They have morphed into an industry thanks to an increasingly mobile workforce.Figures by executive search and HR consulting firm Ma Foi Randstad say up to 12 percent of the Indian workforce shifts to a new city every year.Its the mid-management and senior executives who hire these moving agents, says Ma Foi chief executive officer E Balaji.
The organised labour market in India is made of around 30 million people.Of this,10 million belong to the private sector.Just the private sector would have nearly five lakh shifting base (every year), says Balaji.There are also people switching locations within a city in search for cheaper and better accommodation.

These trends have seeded a nearly 650-crore industry,says a study commissioned by Writers Corporation,the largest international player in the field.The domestic segment chalks up to 70,000 intercity moves and 30,000 intra-city moves annually.International movement is about 30,000 a year,says the study.
The new rule makes it mandatory for such firms to register with the respective state transport departments.The so-called Good Transport Agents registration would be suspended for 15 days for the first violation and 30 days for a second.A third violation would lead to revocation of the licence.The notification has evoked mixed reactions from players in a largely unorganised industry.Nearly 25 players comprise the organised segment,but the size of the unorganised segment is difficult to fathom as every trucker doubles up as a mover.

Chief executive officer of Writers Corporation,Ajay Rao says entry barriers to the industry are pretty low and as a result every trucker becomes a mover.Many of these transport companies throw cheap prices at customers.They run commercial transport networks and to earn a quick buck,mix heavy commercial cargo with fragile household goods.It is the first time that someone has come up with a standard for the domestic sector, he says.
Others like Santa Fe Relocation say the ministry doesnt understand the difference between movers and packers and unscrupulous truckers that are part of Goods Transport Agencies.Santa Fe chief operating officer Anil Jagtiani says reputed packers and movers are already registered with sales tax departments.But many GTAs are not and the government is targeting them by creating problems for those who are part of the solution.Reliable movers and packers usually insure their shipments.

Why protect negligent clients who refuse to insure Also,would someone wake up and ask the government that isnt it too part of the negligence with our vehicles travelling on bad roads, he asks indignantly.

Ramesh Agarwal,chairman of Agarwal Packers and Movers,the biggest domestic player,says the notification would bring discipline to the industry.But suspension of licence and hefty penalties would blow away small players.Agarwal,also the national president of All India Transport Welfare Association,says the industry is labour oriented and inadvertent human errors shouldnt amount to such severe punishment.The rules started out as supporting the carriers but now they have turned it around.They have not applied their mind it seems. 

A large part of the packing and moving industry in India comprises players involved in domestic relocation.Only a handful of firms operate in the international segment,valued at around 200 crore.

In the domestic sector,established players such as Agarwal,Santa Fe and Writers arrive at a quote for customers through a standard format.For packing and loading facilities,they charge on a cubic feet basis and determine transportation costs based on a fixed rate for every kilometre.These rates vary depending on the number of household goods and distance covered.Organised players own a fleet of carrier trucks that are easy to track.
Unorganised players,on the other hand,arrive at a comprehensive rate without following any mechanism.These firms usually are truckers themselves.If not,they hire an outside agency and split the cost.The shared liability and diffused responsibility often lead to customer dissatisfaction,but they charge much lower than organised companies.

Many small players that bear the brunt of the competition from the unorganised sector are not aware of the notification but are worried about its implementation.Why should we pay if the transporter is at fault And what if the customers lie about their assets asks Anil Sharma of Data Packers,a small relocation company.

Some players welcome the proposed change.Our work was getting affected because of these smalltime vendors.They dont have networks or any kind of liability,says Abhilash Nair,regional manager for Crown Relocations.With the new notification,we will have some proof that we are registered with some kind of authority to prove our credibility, he says.

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