Untimely rains drive trucks off the highway, rentals fall

Written by Rachit Vats | Mumbai | Updated: Apr 19 2014, 06:18am hrs
TruckTruck rentals for a Delhi-Mumbai-Delhi round-trip has come down to Rs 60,500 from Rs 63,000.
After registering a growth of 10-11% on a month-on-month basis during the January to March period, truck rentals have dropped by around 4-6% on trunk routes during the first 15 days of April. This was mainly due to untimely rain in many parts of the country, which resulted in damage to fruits and vegetables in the fields and delayed wheat harvesting and procurement in APMCs in several states.

Traditionally, transporters look to the agricultural sector for a boost at this time of the year as harvesting and procurement activities pick up and demand for trucks rise.

According to a mid-April alert by the Indian Foundation of Transport Research & Training (IFTRT) on Friday, the most adversely affected states are Punjab, Haryana, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Maharashtra and parts of Karnataka, Bihar and Rajasthan.

Consequently, truck rentals for a Delhi-Mumbai-Delhi round- trip for a 9-tonne payload has come down to R60,500 April 17 from R63,000 on April 2. Truck rentals on the Delhi-Guwahati-Delhi route dropped to R1,02,000 from R1,08,500, while the Delhi-Hyderabad-Delhi route saw a decline to R84,000 from R89,000 during the same period.

The IFTRTs mid-month alert, which normally is not the norm, stated that in the absence of the untimely showers, it was expected that during the current month wheat harvesting would pick up in Punjab, Haryana, Madhya Pradesh, UP, eastern Rajashtan and in parts of Bihar. However, with the rain having damaged standing wheat crop and delayed harvesting and procurement by two to three weeks in these states, leaving surplus truck supply.

Almost 20% of the truck fleet operating on national permit trunk routes have reverted to intra-state operations in the last week of March but are not able to be employed on local routes and, therefore, are pressing the truck freight market on the national permit trunk routes. Similarly, the 20-25% drop in arrival of summer fruits and vegetables has resulted in surplus truck fleet chasing lower cargo availability from agri-food commodities, said SP Singh, convenor, IFTRT.

The IFTRT report said that though the price of diesel was not hiked this month, it has not provided much relief to truck operators as this was offset by the drop in rentals and underutilisation of truck fleets across the country.

And that could spell bad news for commercial vehicle manufacturers. Singh said this setback may delay the fleet replacement and fleet expansion process. Earlier this month, IFTRT said there had been a shrinkage of about 15-20% in fleet size over the last one year. The total fleet size is about 60 lakh trucks and there are 75 trunk routes on which 18-20 lakh trucks currently hold national permits.