Despite low cargo offerings, truck rentals rise 1-2% in August

Truck rentals surged by one-two per cent in August, compared with a decline of three-four per cent in July. The rise was despite lower cargo offerings from fruit and vegetables and a road transport strike in Maharashtra and the south zone.

The compensatory excess load availability on trunk routes from pulses, food items, export cargo and a steady manufacturing sector also led to a rise in truck rentals. The Indian Foundation of Transport Research & Training (IFTRT), in its monthly report, said the recovery in truck rentals also resulted from the beginning of the festival season and the consequent increased consumer spending in metros, Tier-1 and Tier-II cities in the country.

Senior IFTRT fellow and coordinator S P Singh told Business Standard, “The last month drop was partly due to overheating of truck rentals and required some correction because since October 2009, the truck rentals and retail parcel freight charges/part load freight rates have been continuously rising till the first quarter of financial year 2011-12. Now, cargo offerings into fruit and vegetable markets were lower, witnessing a 20-25 per cent drop. This is because apple crop arrivals from Himachal Pradesh during August and September are continuously declining, with estimated production of 3.2 lakh apple boxes, against 4.1 lakh boxes in the year-ago period.”

He, however, said the compensatory load loss was more than being met by 18.1 million ton (Mt) production of pulses, against 16.5 Mt in the year-ago period. Coarse cereals saw a new high of 21.3 Mt, against 19.6 Mt, oil seeds 31.1 Mt and cotton 33.4 million bales, resulting in a 15-20 per cent rise in production and despatches. Export cargo rose 35 per cent in August, compared to the same period of the previous year.

Though there was a disruption in traffic along a few trunk routes due to excessive rains and resulting floods, the sustained cargo availability on trunk routes helped truck rentals rise in August. “It is significant that the call for an indefinite truck transport strike by transport associations in Maharashtra and south India in the third week of August proved a non-starter, since truckers rebuffed their leadership's claim that truckers were unable to pass on the increased toll charges on highways, high taxation on diesel, increased third party motor insurance premium and run away increase in truck tyre prices during the last six months. Trucking operations remained normal during so-called strike. The revenue realisation of truckers/transporters remaining fairly firm,” Singh said.