Gig Logistics of Rural North-East India: An Ode
When I recently visited my parents’ village in North Eastern India ‘s Manipur, like any person who had enjoyed same day delivery and food apps in the city, I was distraught that I couldn’t get the cute sweater delivered to my doorstep in 1 day, or that my village didn’t have 30-minute laphing deliveries.
Not surprising, as major delivery platforms have not seen a big enough ROI or the market just isn’t ripe for the picking yet. Hence, I needed to plan a full day in advance and optimize my time to and from the nearby market to fulfil these cravings. I enjoyed the little trips to the market place but I did wonder when doorstep delivery would stop being a dream here, in one of the more remote depths of the country.
However, compared to when I had visited the place ten years ago, I saw relative development in my district, Chandel, in the form of new black topped roads, brand outlets and concrete buildings popping up around my tiny village, and fast. I was surprised that heaps of construction materials were available round the clock, especially considering that Manipur has less resources like sand. My curiosity drove me to conduct a small scale research in my parents’ and several other villages on how in a sand-less area, there seemed to be no dearth of sand for the builders and home owners.
Sand in our villages was mostly sourced from Manipur’s neighboring state, Nagaland, which has rich deposits of river sand and coarse sand. There is great demand for it, especially in a village that is transforming into a small thriving town. As not everyone owns a lorry or a truck, this has led to a lucrative source of revenue for whoever can get the precious material transported from Dimapur to Manipur.
There are three models in this business:
(i) The transporter/lorry owner only transports ready orders of the sand/construction materials
(ii) Lorry owner buys the sand and resells to the end consumer or a retailer in bulk
(iii) Lorry owner buys the sand and is the retailer.
Sand in Chandel costs Rs. 185 per unit at retail price which is pretty high. To compensate for the price (and quality), many home owners and contractors choose to get their sand from Dimapur (a district in Nagaland) where it costs Rs. 50 a unit. Capacity of a typical lorry (6 wheeler) is 500 units of sand. 500 units of sand in Dimapur costs Rs. 25,000.
The distance between Dimapur and Chandel being ~250km, it costs about Rs. 13,000 for a round trip’s fuel, and various taxes (both GOI & state groups imposed) are approx. Rs. 7,000 per loaded trip.
As a pure transporter, charges for a truck load varies between Rs. 45,000 to Rs. 60,000, depending on demand, inclusive of fuel, taxes and driver fees. Profit is about Rs. 25,000 to Rs. 40,000 per trip.
As a reseller, a truckload of sand is sold at Rs. 79,000, inclusive of fuel, taxes and driver fees. The owner makes at least Rs. 34,000 per trip as profit.
And as a retailer, a truck load of sand is sold at Rs. 92,500 and a profit of ~Rs. 47,500 is made per trip. In this model however, warehousing costs come into play and the turnover is longer.
Now a round trip takes about 4 days with proper rest for the driver, and since there are many customers waiting, a lorry easily makes about 5–6 trips, with lots of rest, in a month. That leaves the owner with at least Rs. 1 lac to Rs. 3 lacs profit per month after paying off his driver; even more if he is the driver. And this is not counting the chips, cement or hardware transportation, which are all in equal demand and which can be bundled with the sand. Any loan taken to buy the lorry is comfortably paid off. This income has led to many aspiring to buy transportation and construction machinery in the region.
Nowadays, there are local aggregators of the service and that makes it easier to pay the taxes and provide some security to the transporters. They get orders from all over the state and their partners deal in all kinds of transport. But it is a fragmented market and many still make the bookings via connections.
In this arrangement, the only challenges to the transporters lie in the roads and taxes, as there are losses that occur throughout the journey even in a well-packed load, and taxes are not standard. So far, competitors aren’t an issue to the few that own the vehicles, and demand and supply are steady at present. For the customers however, the price difference remains a rueful topic.
I asked the home owners if they were okay with the seemingly large cost of transportation. They accept the business as they need the materials, in this case sand, and they save about Rs. 16,000 per truck load buying from the transporter, even though the costs are comparatively exorbitant. But without the lorries, there wouldn’t be concrete homes dotting the hills…
The housing and transportation situation has birthed an ecosystem of sorts, consisting of sand miners and sellers in Dimapur, and lorry owners, contractors, home owners, retailers and aggregators in Chandel. An interconnected web that is spun by the aspiration for development- one that has left big players out of the picture for the time being. But how long will it be until that changes?
The international trade corridor to facilitate East Asian and South East Asian trade is underway and the North East plays a strategic role in India’s relationship with the two regions. This would bring better roads, interconnected rail-lines and opportunity.
There may certainly come a day when the big players show up and Uber-ize the fleets of trucks and lorries here, introduce state-of-the-art transportation infrastructure, advanced technologies, warehouse facilities and standardization. That day, we may see a new rural North East- more connected, more formal and more powerful. But today, our world is the villages that are well on their way to being called small towns, with the organic transportation ecosystem underneath that makes this step forward possible.
