Is the CUSTOMER THE KING ?

THE CUSTOMER IS THE KING (The Unscrupulous Customer is THE DEVIL) "The Customer Is the King" - This is a maxim preached by the Great Mahatma Gandhi and followed by most business houses around the world (except maybe a few monopolistic businesses). In our Indian Transport Industry – the same principle applies very much. The Transporter does not spare any effort to meet the Customers’ needs and demands to their utmost capabilities. However – there is one phenomenon which occurs in the Transport business – which is not known to the general public. This happens not only in Transport – but in Logistics business on the whole (be it Transport, Freight Forwarding, Courier, Supply Chain Management, etc) This is what often happens: The Transport Company agrees to service the need of some reputed companies on a regular basis. With Public Sector Undertakings and with MNC Customers – there is usually a written “CONTRACT”, which spell out the Terms & Conditions clearly and both parties are EXPECTED to adhere to the terms. In most other cases – this is a majority of business understandings between the Transporter and Customer – THERE ARE NO FIRMLY CHARTED OUT CONTRACTS. There is no hard and fast rule, either that that customer would avail of services from the particular Transporter whom they have an (un-written) understanding with. It is also a known fact that most (99%) customers expect the Transporter to give them a 30 days to 45 days (even 60 days) Credit Facility, which is an acceptable norm in the industry. What may come as a shock to most laymen is the fact that there are a number of Customers – who use a particular transporter for a considerable period of time – using the Credit Facility, initially releasing payments to the Transporter, then gradually start delaying the payments beyond the agreed period of 30 days or 45 days. They would run up an outstanding of lakhs of Rupees, occasionally releasing a few lakhs (like dole outs) to keep the Transporter interested and continue extending services. Finally a situation comes – when the Transporter cannot afford to keep so much of outstanding payment with a particular client and puts pressure for release of payments. Here comes the bomb-shell!!! When the client gets too much pressure from the Transporter for payment – they (the client) will raise some unjustified dispute or arbitrary claim – usually it would be about damage to consignment or delayed delivery. The Claim would be to such a heavy amount – that the Transporter will be left dumbfounded as to how they would compensate the client, or pressure the client for their own dues (to the gullible Transporter – after all - they are a “regular and loyal customer”). Every Transport company in India worth mentioning, has definitely gone through at least one such experience – where they are unable to collect their payments (usually huge amount). But it doesn’t trouble the Client – there is a queue of other Transporters waiting to grab this business. They (Transporters) will go through the same scenario and end up in the same quagmire. Then the next, another and another transporter. It’s an un-ending cycle. There is no way that the aggrieved Transporter can stop the other Transporter from dealing with these unscrupulous customers. AND THEY (the Customer) KNOW IT, THEY FEED ON THIS. One would be SHOCKED to hear the names of some such unscrupulous clients – some of which appear in the Top 100 to 500 Business Houses in our country. Their Brands are well known, their Profits shooting through the roof, they enjoy an excellent reputation among the Consumers of their own products, their Stocks & Shares will be the leaders in the NSE & BSE. BUT THEY DON’T PAY THEIR TRANSPORTER – WITHOUT WHOM THEY CANNOT RUN THEIR BUSINESS – BECAUSE THEY KNOW THE SMART TRICK OF SWITCHING TRANSORTERS (and other service providers, vendors/suppliers of their raw material) AS AND WHEN THEY REACH THE OVERFLOW LEVEL. This is how many business houses in India function and thrive. These Customers are THE KINGS. These Customers are also THE DEVILS. Unfortunately, there is no way any Transport Service provider can stop this menace. There is no Law against this practice, a Transporter does not have a Redresser / Court or Forum which could safeguard the Transporter. Vinod Shankar Consultant & Trainer - Logistics Bangalore Dated – 6th June 2016