Insider Exclusive – Farmers’ Protest 2024: Supply Chain Disruptions Loom as Delhi Borders Sealed

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Amidst heightened security concerns, the ongoing farmers’ protest in 2024 has escalated, leading to the complete blockade of all borders to the national capital region. The mass agitation, which began as a plea against contentious agricultural reforms, has now morphed into a significant socio-economic issue with far-reaching implications, including disruptions to supply chain and logistics activities in and out of the capital.

After the announcement of the farmers’ Delhi Chalo’ movement, security has been tightened at the Singhu, Ghazipur, and Tikri borders of Delhi and traffic restrictions have been imposed. Delhi’s borders have been fortified with concrete barriers and iron spikes laid on the road to prevent vehicles from entering the city.

With transit points obstructed and movement restricted, the ripple effects of the protest are reverberating across various sectors. According to reports, thousands of trucks are stuck on the way between Punjab and Delhi – more than 5,000 of which are waiting to supply goods into the capital. As of now, only essentials carrying commercial vehicles are being allowed into the now fortress city.

The blockade may lead to the disruption of crucial supply chains, exacerbating existing logistical challenges. As a result, consignments may face unprecedented delays as transportation routes get paralyzed. Due to farmers taking to the streets, businesses worth crores of rupees can be affected every day. Other roads including the National Highway have been completely closed.

Due to the farmers’ agitation, the routes leading in and out of Delhi have been diverted. Due to this, vehicles now have to travel longer distances. The freight cost is fixed on per kilometer basis. In such a situation, when vehicles have to travel a longer distance, it is sure to have a direct impact on freight rates.

As the protest intensifies, concerns mount over the potential long-term impacts on supply chain and logistics activities. Industries reliant on seamless transportation face the hazard of significant hurdles in maintaining operations and meeting consumer demands. Moreover, the closure of borders poses logistical nightmares for businesses, with inventory management and distribution networks severely disrupted.

Transport body All India Transporters Welfare Association (AITWA) issued a notification to the truckers/transporters informing them of road blockages and suggested they use alternative routes for the transportation of goods.

On the other hand, the Confederation of All India Traders (CAIT) General Secretary Praveen Khandelwal has urged Delhi Lieutenant Governor VK Saxena to ensure the uninterrupted movement of goods in Delhi. He says that due to the farmers’ movement, there should not be any disruption in the movement of goods coming into Delhi or going out of Delhi. For this, the government should make the necessary arrangements.

Considering that Delhi is neither an agricultural state nor an industrial state, but rather the largest trade distribution center of the country where goods come from and go to different states of the country, if there is any disruption in the supply chain, it will hurt the trade activity of not only Delhi but also the neighboring states.

The blockade not only disrupts the movement of goods but also affects the livelihoods of countless individuals involved in logistics and transportation. Truck drivers, logistics personnel, and supply chain workers bear the brunt of the disruptions, facing financial losses and employment uncertainties.

The 2020–2021 Indian farmers’ protests were primarily against three farm acts passed by the Parliament of India in September 2020. These protests significantly impacted freight systems in Delhi, particularly because major highways were blocked by protesting farmers. The blockades disrupted the movement of goods and caused delays in freight transportation, leading to increased logistics costs and transit times. A similar situation can arise this year too.

To mitigate these challenges, the transport industry and businesses implemented several measures including but not limited to:

Route Diversification: Companies explored alternative transportation routes to bypass areas affected by protests, reducing delays and ensuring timely delivery of goods.

Technology Adoption: Embracing digital solutions such as route optimization software and real-time tracking systems helped transporters navigate disruptions more efficiently and communicate updates to customers.

Supply Chain Redesign: Some businesses redesigned their supply chains to minimize reliance on affected regions and diversify sourcing locations, ensuring continuity in the supply of goods.

Collaboration with Authorities: Transport companies collaborated closely with local authorities and law enforcement agencies to coordinate movement through protest-affected areas and ensure the safety of goods and personnel.

The last time too, the protests caused a major shortage of raw materials from bird feed to ply-wood industries, extending to the pharma sector too. This caused severe disruptions to the manufacturing sector. Due to the agitation, there was a crisis in the export of manufactured products as 7,500 trucks were stuck in different locations. The supply chain of raw materials was been broken, and finished products worth INR 400 crore stood lying in factories waiting for transportation.

Looking ahead, the prolonged standoff threatens to exacerbate supply chain vulnerabilities, posing challenges for economic recovery efforts. As stakeholders grapple with the repercussions, urgent measures are required to address the impasse and restore normalcy to supply chain and logistics operations.

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