1. Truck rentals down 4% in June on low cargo availability

Truck rentals down 4% in June on low cargo availability

Subdued availability of the cargo from the manufacturing, infrastructure and agricultural sectors along with reduction in the diesel prices have pulled down the truck rentals by 3 to 4% across various trunk routes in June

By: | Mumbai | Published: July 16, 2015 12:38 AM

Subdued availability of the cargo from the manufacturing, infrastructure and agricultural sectors along with reduction in the diesel prices have pulled down the truck rentals by 3 to 4% across various trunk routes in June, reports from the Indian Foundation for Transport Research and Training showed.

Cargo such as vegetables and fruit shrunk as the mango crop, which was available in abundance in May and June, was not there and closing of wheat procurement by the agencies further exacerbated cause of the truck fleet owners.

Sanjay Singh, senior fellow, IFTRT, said that every sector from manufacturing to agriculture did not provide adequate cargo in July.

“The drop in cargo availability across the board has resulted in trucks waiting for three to four days for return cargo on the key trunk routes. Automobile dealers saddled with excess inventory of truck chassis at June quarter end, as truck fleet owners shy away from new purchases due to weak truck transport business in the market,” said Singh in the report.

The freight rates in the busiest route — Delhi to Mumbai — fell by 4% to Rs 82,210 per round trip while the same on the Delhi to Guwahati route — the most expensive — also fell by 4% to Rs 1,41,500 per round trip.

According to the report, road transporters may have to wait for another 2-3 quarter to see any increase in the availability of the cargo from the infrastructure, manufacturing and mining sectors.

“As per market situation, Rs.0.71 per litre cut in diesel price on July 1 may have some marginal reflection on the truck rentals in the current week. However, the larger picture of quick recovery in the manufacturing sector and exports seem to remain very uncertain,” said IFTRT in the report.

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