Overall economic slowdown hits truck rentals hard in 2019

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Published: January 3, 2020 1:25:00 PM

Due to general economic slowdown during the year, the cargo offerings, on an average, fell by 15%, covering factory output, fruits, vegetables, food items with slowness in import-export trade, while a large number of infrastructure projects got stalled due to cash crunch.

economic slowdown, IFTRT, BS-IV trucks, overall truck sales, rentals in Delhi-Guwahati-Delhi route, overall truck salesContinuing the downward trend, December too saw a decline of 2.5% in truck rentals, the association said in a release here.

Truck rentals on main trunk routes across the country dropped between 10.4% and 19.4% in calender year 2019. This is despite an increase of Rs 5.30 a litre in diesel prices during the year, said Indian Foundation of Transport Research and Training (IFTRT), the apex body tracking the truck industry for over two decades. Continuing the downward trend, December too saw a decline of 2.5% in truck rentals, the association said in a release here.

Due to general economic slowdown during the year, the cargo offerings, on an average, fell by 15%, covering factory output, fruits, vegetables, food items with slowness in import-export trade, while a large number of infrastructure projects got stalled due to cash crunch.

Hence, 2019 witnessed fall in truck rentals by a minimum of 10.4% to a maximum of 19.4% despite a marked increase in diesel prices during the year, IFTRT pointed out. While Delhi-Nagpur-Delhi route saw a minimum rental drop of 10.4%, the Delhi-Ranchi-Delhi route witnessed a maximum drop of 19.4%. Similarly, rentals in the Delhi-Guwahati-Delhi route declined by 17% and Delhi-Raipur-Delhi route rentals fell by 15.8%, IFTRT said.

Therefore, truck sales too have plunged without any excitement for pre-buying BS-IV trucks as migration to BS-VI is due from April 1, 2020 and reportedly the BS-VI trucks shall be costly with high maintenance cost. According to IFTRT, the fall in December rentals was largely caused by major drop in arrival of fruits and vegetables and food items in the APMCs and factory gates too generated lesser cargo with infrastructure projects continuing to be on slow pitch and the whole cargo flow on trunk routes was lower by 15%.

As monthly fleet utilisation in 2019 plummeted by 35% for a truck running on trunk routes (due to overall economic slump, recession in some of the industries), consequently the monthly revenue of trucks in last two quarters has plummeted by 40% on reduced round trips on trunk routes with 4-5 days waiting period for return cargo on most routes, which in turn impacted the overall truck sales.

Now, truck makers are pinning their hopes on the mandatory vehicle scrappage policy, which is yet to be approved by the union Cabinet. IFTRT has been consistent that there are several other tools to curb vehicular air pollution by digitising annual vehicle inspection and maintenance regime and upgrading the computerised PUC checkup system.

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