Truck rentals up 6% on diesel price hike, strong cargo support

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Chennai | Updated: October 3, 2018 2:32:38 AM

The truck rental on the trunk routes has increased by 6% in September on the back of a sharp incease in diesel price as well increased cargo offerings.

Truck, Truck rentals, diesel price, diesel price hike, cargo support, cargo offeringsThe Foundation further said that during September 2018 the factory gates provided 10%-15% more cargo over last month with steady support of cargo offerings and fleet engagement in export trade.

The truck rental on the trunk routes has increased by 6% in September on the back of a sharp incease in diesel price as well increased cargo offerings. The diesel price during the month increased by Rs 4.60 a litre, which is sharpest during the last nine months — since January 2018. Moreover, on the back of a buoyant double-digit increase in cargo offerings from factory gates with steady flow of fruits, vegetables, food products and poultry items along with constant engagement of truck fleet in the infrastructure sector, saw truck rentals on the main routes gone by 6%, said Indian Foundation of Transport Research and Training (IFTRT), the apex body tracking the truck industry for more than two decades.

According to IFTRT, with international Brent crude oil touching $82.90/bbl on the back of a weak rupee at Rs 72.60/dollar, the daily diesel price hike doze becoming a normal for trucking industry and as such the trade, commerce and industry have reconciled to the fact that truck rentals and retail freight charges are bound to rise for next several months due to the cues that the crude price could touch even $90/bbl by next March 2019.

Therefore, it has become convenient for truck transporters to increase truck rentals on trunk routes with effortless ease and pass on the fuel cost burden more than its real impact on to the truck hiring businesses in agriculture, manufacturing and infrastructure sectors. Normally, about 70-75% of the truck rentals in the open market load are fixed by goods transport agents and truck unions in different parts of the country, while 25%-30% of the goods transportation business is contractual based on annual or multi-year rate contract between transporters/common carriers and corporate/PSU consigners in the country.

Interestingly, Q2FY19 (July-September 2018) has been a buoyant period despite the monsoon season as availability of cargo from all sectors — manufacturing, export trade, agri food items and truck fleet employment in the infrastructure sector too — has been fairly positive leading to improvement in more round trips for truckers on trunk routes and higher working hours on infrastructure projects of multi-axle heavy duty trucks and trailers.

The Foundation further said that during September 2018 the factory gates provided 10%-15% more cargo over last month with steady support of cargo offerings and fleet engagement in export trade, agri food items transportation to APMCs and engagement in major road building and construction projects.

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