Truck rentals slide by 4-5% on trunk routes in November

Truck rentals on trunk routes dipped by 4-5% after briefly peaking during the festival season in October

The slowdown in the economy is reflected in truck rentals. In November, truck rentals on trunk routes dipped by 4-5 per cent after briefly peaking during the festival season in October.

According to the report by the Indian Foundation of Transport Research and Training, the October gains were short-lived. What stalled further fall in truckers’ revenues was the continuous support from wheat, rice export-related transportation and the sustained domestic transportation of cement, tiles, sanitary material, pharma, FMCG goods and increased arrival fresh fruits and vegetables.

The Foundation's senior fellow and coordinator S P Singh said that truck rentals started falling in the second half of November after a stable period during Diwali festival, thanks to increased cargo movement.

According to Singh, the small-scale manufacturing sector, a major contributor to cargo movement, is passing through tough times due to pile up of inventories.

“In a positive development, the truckers are putting on hold induction of new trucks and fleet expansion, despite heavy inducements coming from vehicle manufacturers. Therefore, indiscriminate fleet expansion by operators has come to a halt because truckers have fresh memories of 2008-09’s economic slowdown and the resultant crisis in the truck transport business," Singh noted.

He added that the truckers were able to pass on the increased cost of diesel price hike of Rs 5 per litre by way of 5-6 per cent jump in truck rentals in September.

However, the gains from further freight increase of 3-4 per cent in October did not help as rentals dropped by 4-5 per cent in the second half of November.

Singh has sought the government's intervention to increase expenditure on infrastructure sector and encourage consumer spending to infuse life in the economy and help the truck transport, which moves more than 80 per cent of the cargo in India.

Currently, he informed that there are over six million trucks and 250,000 transport firms in the country handling an annual freight volume of Rs 4,00,000 crore.

SPEED BREAKER
Full truck load (16.2 tonne gross vehicle weight) rental (Rs per round trip)

Trunk Route 

Round Trip
from Delhi*

  Rental Movement ( per round trip)

Rentalas on
2nd  Nov. 2012Rental  as on
1st Dec 2012
with Decrease(%)Monthly Rental
Avg  for April’10
-March'11Monthly Rental
Average for April’11
-March'12 Mumbai56,50054,300 (-4%)51,15856,598 (10.6%) Nagpur53,70051,000  (-5%)49,05854806 (11.7%) Kolkata58,00055,700 (-4%)50,35957,809 (14.8%) Guwahati1,01,00096,000  (-5%)90,541

1,02,154 (12.8%)

Hyderabad77,30074,200 (- 4%)66,97576,625 (14.4%) Chennai87,00083,500 (-4%)79,85889,242 (11.7%) Bangalore86,20082,800 (-4%)77,95087,417 (12.1%) Ranchi57,20054,400  (-5%)49,93356,308 (12.8%) Raipur53,60051,500   (-4%)48,75954,392 (11.6%) Kandla43,00041,300 (-4%)35,40041,867 (18.3%) Bilaspur53,50051,400 (-4%)47,43354,017 (13.9%) *9 tonne payload                                  Source : Indian Foundation of Transport Research & Training