It is time to see roads as central to any supply chain. Else, the grand call for ‘resilient supply chain’ will falter at every level – national highways, state highways and intracity roads. While road accidents occur on all three types of roads, the last acquires a certain additional significance since they represent last mile connectivity and involve multiple agencies making a unified oversight a nightmare. Unless big businesses intervene, the situation is unlikely to change.
A shift in perspective or angle of vision can completely alter our way of seeing any phenomenon even if we are familiar with it. Problems considered in isolation come together as a single problem, paving the way for a holistic view. This is what I am pleading for when we are talking of roads and road accidents, with a sense of urgency now given the global call to build resilient supply chains. Incidentally, I am willing to wager that supply chain in its entirety is likely the latest (large scale) investment interest, apart from anything to do with tech, subject to realistic valuations.
Resilient supply chain
‘Resilient supply chains’ became a rallying call across the world by both businesses and politicians, in response to supply disruptions in certain products, chief of them being chips, during the Covid-induced pandemic. If India has to succeed in its goal of attracting global companies, it has to address two interdependent components: manufacturing and infrastructure of which we are concerned with roads. Manufacturing is a separate issue which I will deal with later.
The length, breadth and ‘complexity’ of supply chains is the direct result of manufacturing decisions. Length is a function of how much of manufacturing is outsourced, breadth being a function of geographical locations and ‘complexity’ being a function of the multiple risks companies will inevitably encounter as a result of the length and breadth. Using appropriate weightages, you can create a SCVI: ‘supply chain vulnerability index’. What is certain to figure most prominently in such an index is the shoddy condition of roads.
Roads – supply chain’s Achilles heel
Consider some data. Around 2.7 trillion metric tons per kilometre was transported by roads in India in fiscal 2019, according to data as on March 31, 2023 published in Statista, which adds that road transport is the dominant and growing mode of freight traffic in India https://www.statista.com/statistics/667440/road-transport-freight-india/. You may also visit https://www.ceicdata.com/en/india/railway-passenger-and-freight-traffic-monthly/freight-traffic-net-tonne-kilometres for related data.
A report by the Ministry of Transport, Government of India relating to road accidents in 2021 (https://aiche.onlinelibrary.wiley.com/doi/abs/10.1002/prs.12154) notes that 35.8% of fatal accidents were on National Highways, 24.6% were on State Highways and 39.6% were on ‘other’ roads. You may refer to https://morth.nic.in/road-accident-in-india for detailed year-wise data on road accidents. In a 2021 analysis of tanker road accidents in India, Rajan Kumar Gangadhari and two others have identified three main reasons: driver negligence, road conditions and equipment failure (https://aiche.onlinelibrary.wiley.com/doi/abs/10.1002/prs.12154).
Statista adds another relevant but painful data: the number of fatalities due to road accidents was 154 thousand in 2021 alone and that between 3-5% of GDP is invested in such accidents (https://www.statista.com/statistics/746887/india-number-of-fatalities-in-road-accidents/). According to the World Bank, road accidents kill 900,000 people every year, more than anywhere in the world, costing India $156 billion, as quoted in Bloomberg (May 24, 2023) https://www.bloomberg.com/news/features/2023-05-24/four-problems-and-solutions-for-india-s-dangerous-roads. According to an earlier report from the World Bank, more than 75% of rural households reported a decline in income leading to increased debt burden because of poor roads (https://www.worldbank.org/en/news/press-release/2021/02/13/road-crashes-in-india-increase-household-poverty-and-debt). This 2021 study was done in collaboration with SaveLIFE Foundation which surveyed four states – UP, Bihar, Tamil Nadu and Maharashtra. This is shocking indifference.
Using the principle of last mile connectivity employed in telecom, a subject of intense debate some years ago, it is time to address the same in the case of road transport – intra-city roads, which cause nearly 40% of road accidents, as noted above.
Staggering absurdity: Moon landing but
Armed with a frugal budget, ISRO has accomplished an extraordinary mission to the moon’s south pole, a feat that is stark contrast to the way we are twiddling our thumbs when it comes to such a mundane thing like roads. There is an unchallenged entrenched network invested in the continuing business in building shoddy roads and road repairs, even with some municipal corporations enjoying a budget bigger than many state governments put together.
There is only one way to fight this network: through another network. As Professor Manobar Sawney once observed, you can fight a structure only with another structure. Can Big Business in India be that structure through its influential organisations such as CII, FICCI, Assocham, Nasscom, to mention a few?
Takeaways
Resilient supply chain is the new mantra
Might become the next investment attraction
Road conditions will spell doom for the dream of resilient supply chain
Big business needs to intervene
