The Reality: Why 90% of Indian Fleet Owners Have Less Than 10 Trucks

The trucking industry plays a vital role in global transportation, moving goods and materials across vast distances efficiently. When we envision the industry, we often picture a fleet of massive trucks dominating the highways. However, the reality is that the majority of Indian fleet owners operate on a smaller scale, with less than 10 trucks. In this article, we will explore the reasons behind this surprising statistic and shed light on why smaller fleets are the norm.

Major Reasons due to Which Indian Fleet Owners Can’t Grow Their Fleets Aggressively

1. Interpersonal Conflicts in Family Run Businesses 

The trucking business can be highly competitive. The decision of maintaining a smaller fleet can be due to many reasons, some major ones being financial constraints, regulatory conditions, resource limitations and family problems. Some truckers may prefer to have more control over their operations and enjoy the freedom and flexibility that comes with operating a smaller fleet. They may prioritize a better work-life balance or prefer to handle most aspects of their business personally. Families can face various challenges and conflicts in a trucking business, just like in any other family-owned business. Here are some common reasons why families might fight in a trucking business:

1. Roles and responsibilities: 90% of the people owning trucking businesses distribute major roles wrt to fleet management and other practices among their families. Family members may have different expectations and opinions about their roles and responsibilities within the business. Disagreements can arise when there is a lack of clarity or when individuals feel their contributions are undervalued or overlooked.
2. Decision-making: Family businesses often involve multiple family members who may have different ideas and visions for the company’s direction. Conflict can arise when family members disagree on important decisions such as investment strategies, expansion plans, or the introduction of new technologies. Ego clashes may lead to varied views and ideas and cause hindrance in the expansion of business if it ever comes across. 
3. Communication breakdown: Poor communication or a lack of effective communication can lead to misunderstandings, resentment, and conflicts within a family trucking business. Communication gaps can occur when family members fail to express their concerns, listen to one another, or address issues promptly.
4. Personal conflicts and emotions: Family dynamics can sometimes bring personal conflicts into the business realm. Past grievances, unresolved family issues, or personal rivalries can spill over into the trucking business, leading to heightened tensions and disputes.
5. Work-life balance: Balancing family relationships and business responsibilities can be challenging. Long working hours, frequent travel, and the pressures of running a business can strain personal relationships, leading to disagreements and conflicts within the family.

Although there are companies run by families owning more that 300-400+ trucks, who know the balance between business and personal relationships. But these issues still persist in the industry and to mitigate these issues, it’s important for family members involved in a trucking business to establish clear communication channels, set defined roles and responsibilities, establish a succession plan, and seek external advice when needed. Regular family meetings, open dialogue, and professional guidance can help address conflicts and ensure the long-term success of the business while maintaining family harmony.

2. Uneven Policies Limiting Indian Fleet Owners 

Uneven policies can indeed pose challenges for truck drivers looking to expand their trucking business. The system in India is not architected in a manner which is truck business friendly as compared to other countries such as USA, Europe, Russia, and more. Major reasons are listed below which have proved to be an obstacle between truck owners and business expansion.

1. Licensing and Permitting: Authorities may have varying requirements for obtaining licenses and permits for operating commercial trucks. These requirements can differ across regions, making it difficult for truck drivers to expand their business across state or national borders.
2. Regulatory Compliance: Regulations related to safety, emissions, and other operational aspects can significantly impact trucking businesses. If these regulations are inconsistent or change frequently, it creates compliance challenges for truck owners/drivers and increases their operational costs.
3. Infrastructure and Access: The availability and quality of infrastructure, such as roads, bridges, and ports, play a crucial role in the trucking industry. Inadequate infrastructure or limited access to certain areas can hinder the expansion of trucking businesses.
4. Labor and Employment Policies: Government policies related to labor and employment, such as minimum wage laws, working hour restrictions, and employee classification rules, can impact the cost structure and operational flexibility of trucking businesses.

3. Operations Management and Lack of Automation

Operations management and lack of automation can significantly impact the growth and efficiency of a trucking business. Without effective operations management practices, such as optimized route planning and resource allocation, the business may face inefficiencies, increased costs, and reduced customer satisfaction. Manual processes and a lack of automation further hinder scalability, as they limit the company’s capacity to handle larger volumes of shipments and adapt to changing demands.

1. Inefficiencies in Operations: Without effective operations management practices, trucking businesses may face challenges in optimizing their processes. Inefficient route planning, ineffective load scheduling, and poor resource allocation can result in longer delivery times, increased costs, and lower customer satisfaction. These operational inefficiencies can hinder expansion by limiting the capacity to handle more business and meet customer demands.
2. Limited Scalability: Manual processes and a lack of automation can make it difficult for trucking companies to scale their operations. When a business relies heavily on manual tasks such as paperwork, manual data entry, and phone-based communication, it becomes challenging to handle larger volumes of shipments and accommodate the growing complexity of operations. Scaling up without automation can lead to increased errors, delays, and higher operational costs.
3. Cost and Investment Constraints: Implementing automation technologies often requires initial investments in hardware, software, and employee training. For some trucking businesses, the costs associated with adopting automation may present a barrier to expansion. Limited financial resources and the need to prioritize other operational expenses can make it challenging to invest in automation solutions that could enhance efficiency and support growth.

While the image of large trucking fleets may dominate our perceptions, the reality is that the majority of Indian fleet owners operate on a smaller scale, with fewer than 10 trucks. The reasons behind this trend are practical and logical, rooted in financial constraints, market access challenges, operational control, driver shortages, and risk mitigation. It is clear that the prevalence of smaller trucking fleets is a result of many conflicts in family run business and faulty government policies. With time, there has been a significant rise in the trucking business but still there is a long way to go. Implementing smart and strategic growth practices, fleet owners can effectively grow their fleet business.