The first month of the current calendar year has brought some cheer to the trucking industry as freight rates on trunk routes saw a rise of 6-8 per cent due to improved cargo offerings from the agri segment as well as some increase in FMCG (fast moving consumer goods) output.
“With 20-25 per cent increase in cargo flow of fruits, vegetables and food items and 4-5 per cent improvement in manufacturing output, particularly FMCG products, truck rentals were up during January this year. This is the first time since January 2012 that truck rentals have shown significant increase,” according to a statement of IFTRT (Indian Foundation of Transport Research and Training).
Rental on Delhi-Mumbai-Delhi round trip on a 9-tonne payload truck was up 6 per cent at Rs.61,000 on February 1 againstRs.57,800 on January 2. Delhi-Chennai-Delhi round-trip saw an increase of 7 per cent to Rs.94,700 from Rs.88,500 and Delhi-Ranchi-Delhi trip rental saw a rise of 8 per cent to Rs.61,000 from Rs.56,500.
The most important factor contributing to such a recovery in freight rates was the shrinking truck fleet on trunk routes. There has been a 15-20 per cent drop in the volume of national permit trucks on medium and long haulage.
Also, a significant drop in resale price of used trucks contributed to churn in truck fleet. Price of old trucks (five year and above) fell 25-30 per cent, thereby preventing truckers from selling old vehicles and purchasing of new ones.
“The trucking industry needed such a drop in truck sales to taper off their overcapacity created between October 2009 and March 2012,” said S. P. Singh of IFTRT.
