Maintaining the growth momentum, truck rentals again rose by 3.5% in October 2016 on the back of extra pick-up in the festival season, ‘kharif’ crop harvest and high consumer spending. In September, truck rentals went up by 4%.
With low food, fruit and vegetable inflation providing quantum improvement in cargo offerings and diesel cost going up by R2.37 a litre on October 15, fleet owners, however, preferred to go in for extra utilisation of their idling trucks, said a report by the Indian Foundation of Transport Research and Training (IFTRT), the apex body tracking the truck industry for decades.
With businesses at their peak due to the festival season, and kharif harvest and consumer spending buoyant, low inflation for food items, consequent cargo offering from agriculture, factories and improved foreign trade volume push up truck rentals during October, conveniently and instantaneously absorbing the diesel price hike.
According to the foundation, the dispatches post monsoon on truck routes and booking & delivery of part retail load went up by 35% in October, leading to further improvement in fleet utilisation, as 25% national permit holder and inter-state permit holder trucks were diverted to home states for harvesting and procurement of kharif crops like paddy, cotton, coarse grain, pulses and edible oil processing agri-items.
The maximum demand for freight movement is coming from SME units, cars, two-wheeler transportation, consumer durables, FMCG, general merchandise, cement, timber, various high value marble and tiles.
In September, truck rentals witnessed a 4% hike on the back of diesel price revision and fleet demand jump post monsoon season and onset of festival spending period.
This may be the last festival demand season before the Goods and Service Tax (GST) is introduced from April 1, 2017, which will minimise tax avoidance.
As usually, with continuation of kharif harvesting and beginning of ‘Chhat Puja’ in some states, truck drivers will be on short supply in first half of November 2016 and it may help truck rentals to remain high, the report added.