How Transport Corporation of India Is Shifting Gears from Fleet Expansion to Efficient Transportation

Somewhere along the Calcutta-Bombay (now Kolkata-Mumbai) route in 1958, Prabhu Dayal Agarwal's only truck caught fire. He had borrowed money to buy it and was only months into building his business. When the truck was destroyed, so was the cargo.

For a company with a single vehicle, there was little room to absorb such a loss.

However, Agarwal's next move was not to replace the truck. Instead he borrowed more money and paid the customers whose cargo had been lost.

Only then did he start rebuilding Transport Corporation of India (TCI). Nearly seven decades later, Vineet Agarwal, his grandson and TCI's managing director, still cites the incident as one of the foundational moments of the company.

“The money was raised much as the original capital had been, through borrowing and personal credibility. In those early years, relationships and reputation were the collateral,” Vineet says.

Many kilometres have been logged since then.

TCI has grown into a logistics company spanning road, rail and sea, with a network of around 1,400 locations. The company's fleet size is about 1,200 trucks and six ships. Like nearly all such journeys, TCI has had its fair share of potholes and speed breakers.

Truckin’ Not Enough

In the early years, India’s road infrastructure was poor. But as the conditions improved so did TCI’s business. But then another problem popped up: relying solely on one mode of transportation left the company exposed to the limitations of trucking.

The answer was diversification.

TCI became a public limited company in 1974, went public in 1982 and entered shipping in 1985 with the acquisition of two ships. The expansion coincided with another disruption, this time inside the family.

Prabhu Dayal Agarwal died in 1983. The following decade involved a restructuring of the family's business interests, eventually resulting in a split in the 1990s. For the company, the challenge was not just ownership. Businesses had to be realigned financially and operationally.

Vineet joined TCI in 1996, when the company was still largely a freight business with revenue of around ₹250cr. The new generation inherited a business that had a strong history but was still vulnerable to the cycles of its core market. The task was to reduce that dependence.

TCI branched out to express logistics, supply-chain solutions and warehousing. In 1996, it launched XPS Services as demand for faster transportation began to grow. But diversification meant entering businesses where TCI did not have the same experience or operating history that it had built in trucking. Mistakes followed.

One of the more consequential was Transystem Logistics International, TCI's joint venture (JV) with Japan's Mitsui & Co. Set up in 1999, the 49:51 JV was designed to provide integrated logistics services to automobile manufacturers, including inbound movement of components, just-in-time deliveries, warehousing and outbound transportation. However, pricing mistakes resulted in losses and pushed the JV close to bankruptcy.

The episode forced TCI to confront a problem that can be hidden during periods of rapid expansion, revenue growth does not necessarily translate into a viable business.

“As we scaled new verticals, there were periods when growth outpaced our comfort on margins and risk,” says Vineet. The response was unusually direct. TCI went to its customers and acknowledged that the pricing structure was unsustainable. The customers agreed to revisit the commercial structure, according to Vineet.

The immediate crisis was contained, but the experience changed how TCI approached new business. Profitability, risk assessment and return thresholds became more important in deciding whether to pursue growth.

Covid and After

The Covid-19 lockdown in 2020 brought India's logistics network to a near standstill. For TCI, the problem began with the people who physically moved the cargo. Drivers started leaving their trucks and returning to their villages amid fears of infection, police action and uncertainty around interstate movement.

“We had loaded trucks stranded mid-route and at customer sites, with no clarity on movement permissions,” says Vineet. According to him, nearly 40% of truck capacity across the industry became unavailable at one point.

TCI created support teams and war rooms across locations, coordinated with authorities and tried to provide food and safety support to drivers who remained on the road.

The problem exposed something fundamental about logistics: technology and physical infrastructure mean little when people operating them cannot move.

Customers were also shutting factories and reducing operations, making the situation more difficult. For TCI, the lockdown became less about expansion and more about keeping the existing system functioning. It also exposed how dependent logistics remains on a fragmented ecosystem of drivers, authorities, roads, warehouses and customers.

TCI's current transition is being driven by another set of pressures: emissions, customer demand, technology and the need to make transportation more efficient.

The company wants to shift its trucks towards alternative fuels over the next few years. It is also pushing more freight towards rail and sea. But this transition has its own bottlenecks. CNG, LNG and electricity are increasingly available, but the infrastructure required to operate them reliably across long-distance routes is still developing. A truck can be technically capable of running on an alternative fuel, but that does not solve the problem if the next refuelling or charging point is too far away.

Customers may also want to move away from fossil fuel but the cost and operational creases have to be ironed out.

The same applies to multimodal transportation.

Moving cargo from road to rail or sea is not simply a matter of shifting it from one vehicle to another. Schedules have to be chalked out, cargo transferred between modes and customers need transparency across the entire journey.

TCI says nearly a third of its business has shifted to multimodal transportation over the past 10–12 years. The remaining transition will depend partly on how quickly the wider ecosystem catches up.

The Next Leap

The next phase of TCI's growth comes with a significantly larger investment bill. The company plans to spend more than ₹500cr annually over the next four years, with investments spread across ships, trucks, railway rakes, warehouses and information-technology systems. That follows around ₹2,000cr of investment over the past decade.

TCI is deploying AI and machine learning across areas such as route optimisation, process monitoring and productivity. The challenge is increasingly about integrating these tools into day-to-day operations rather than simply adding new technology.

There is also the question of scale. Around 99% of TCI's leadership has been promoted internally, according to Vineet. As the organisation expands, maintaining that pipeline of talent and the culture built around internal development becomes more important. “Maintaining our culture of trust and ownership as we scale” remains one of Vineet's concerns.

For TCI, the next leap is less about adding to the network and more about changing how that network operates.