Business Daily from THE HINDU group of publications
Tuesday, Jul 25, 2006
Money & Banking - General Insurance
Logistics - Policy
Pay more, get higher goods cover
New Delhi , July 24
Companies seeking higher risk liability coverage from transporters for moving their goods on road should soon be able to obtain it by paying higher tariffs.
The Carriage by Road Bill, covering the commercial road transport sector, proposes to increase liability cover for goods lost or damaged in transit to Rs 10,000 from Rs 100.
In order to move goods with higher liability limits, transporters or common carriers can charge higher tariffs from their customers - but they will be required to publish it. Currently, the sector is governed by the Carriers Act, 1865.
The Bill is likely to be re-introduced in the winter session of Parliament, after taking into account the Standing Committee Recommendations on the issue, according to the recently circulated Cabinet note.
The Bill mandates a single, all-India registration for all players providing motorised transport service - be it truckers or goods booking agents - as common carriers, according to sources.
It also attempts to curb overloading by fixing the responsibility of overloading on common carriers.
Currently, goods booking agents are not required to register and in case of overloading, truckers end up receiving the flak.
But truckers claim that goods booking agents are equally responsible as they book truckers for high loads.
And if one trucker refuses to carry overload, they move to another.
Moreover, the Ministry has proposed that a single "serious offence" should be enough to cancel the registration of a common carrier.
Though "serious" has not been defined in specific terms, overloading is one of the offences and can be considered "serious" in extreme cases.
The Parliamentary Committee had recommended that registration should be cancelled for common carriers found violating norms - including loading - five times.
The Bill also proposes to allow registration to only those companies that have experience in the sector.
For several firms operating in India, goods security on roads has been a major hassle.
Speaking at a conference recently, Mr Niraj Ambani, Senior Vice-President of Reliance Logistics, had said that security of cargo in hinterland is a major issue for players.
The Carriage by Road Bill was introduced in Parliament in December 2005.
It was then referred to the Standing Committee.
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