Against a 30-35% rise in truck rentals during the last 10 quarters (October 2009 to March 2012), the first quarter of the current financial year witnessed a drop in truck rentals of 8-11% on trunk routes, with almost 10-15% lower cargo offerings coming from the manufacturing sector.
Brokerage Prabhudas Lilladher in its analysis pointed to a host of factors behind this. The SME sector, provider of 70% of cargo from manufacturing, has been witnessing lower production due to massive 8-10 hour power shortage in most states. Moreover, 25-30% lower arrival of summer season vegetables and fruits in agricultural produce marketing committees and a 3-5% drop in import-export cargo are too have reduced the cargo flow to the truck freight market, resulting in the almost double-digit drop in truck rentals, said Prabhudas Lilladher.
So, in spite of a 5-7% increase in cement shipments, higher consumer spending and a rise in wheat and mango arrivals in June 2012 helped the relatively smooth cargo flow in Punjab, Uttar Pradesh, Andhra Pradesh, eastern Rajasthan, Haryana and parts of Bihar, the cargo flow from small and medium manufacturing units declined significantly, by 25-30%. This resulted in truck rentals being under stress for a third consecutive month.
Some of the larger manufacturing units posted higher output figures, as a result of which the inventory pile-up with distributors and wholesalers has gone up, the analysis said.
According to the Prabhudas Lilladher report, truck operators in various production centres currently have to wait for two to three days for securing a return load, against the normal waiting period of 12-16 hours earlier.