A few days earlier, a tremendous step has been taken by our government for the demonetization of 500s and 1000s. With the aforementioned step taken and already been implemented, people are experiencing a feeling of mixed emotions, but overall every citizen is showing appreciation and bracing it with their support and high-spirit. But somehow it has affected the logistics industry to a great extent. Many companies are seeing downfall just for this sole reason. In this article, we will see how the demonetization of 500s and 1000s has affected the current logistics realm.
Bengaluru transport and logistics:
Demonetization has driven almost 70% off the trucking business. The reason behind that is not difficult to understand as 80% of the Trucking business is solely based on cash transactions. Our trucking industry contributes almost 4.8% of our annual GDP, which is about Rs 544,800 crore. If we calculate on a daily basis, it comes to around Rs 1,492 crore daily. Now thanks to demonetization, it has come down to 290 crores. This amount is not enough for the trucking industry to sustain.
Bengaluru transport and logistics have gone completely cashless and every Bangalorite is trying to pay for their fare via online payment mode. But not being equivocal here, it had a big impact on current logistics scenario. Many orders are getting cancelled. The reason is quite simple. During any Logistics and Transportation, the fare will be sometimes more than 500 INR and forcefully they have to pay 500 or 1000 rupee note. For this, the overall logistics business is getting affected, since no one is accepting the old 500 and 1000 rupee denominations. With this going on, many logistics and transportation companies are getting fewer orders than before. Some businesses are currently declining for this whole and sole reason.
There is also a solution for that, which we would like to discuss here. The customers can use cashless transactions like online payment or they can pay via their Paytm wallet, if they have one. With this facility, they can really pay on the move, anytime.
Namma Bengaluru is pushing itself towards cashless transactions and logistics companies like City Link is encouraging their customers to use online payment for their trips.
Some major impact:
- Many COD orders will fail
- Transactions on debit cards will increase
- POS terminals usage will surge
- Mobile wallets will push customers to load wallets
- More efficient cash management at ATMs
A piece of advice for all logistics companies:
If logistics companies want to swim across this tough situation, then they will have to definitely go for cashless transactions. Any Logistics and Freight company must encourage their customers for cashless transaction; there are no other options available. A company must encourage their customers for online and similar payment methods. This will yield a mutual benefit to both the company and the customer.
City Link 