Truck rentals may rise 3-4%

Rentals were already high due to strong manufacturing sector growth.

Truck rentals are likely to go up by three-four per cent following the Rs 2-a-litre hike in diesel prices. Transport companies may also raise freight charges for consignments by 10-12 per cent.

S P Singh, coordinator, Indian Foundation of Transport Research and Training (IFTRT), said the increase in the price of diesal might lead to a three-four per cent rise in truck rentals on the back of a buoyant economy.
 

TRUCKING NEW TROUBLE
Truck route (Round trip/ 9 tonne payload)	Rental as on 25-Jun	Weighted diesel  hike impact
		Rs 2/litre	% increase expected
Del-Mum-Del	48,100	1,400	3.0
Del-Nagpur-Del	46,800	1,300	3.0
Del-Kolkata-Del	46,800	1,400	3.0
Del-Guwahati-Del	86,000	3,000	4.0
Del-Hyd-Del	68,500	2,200	3.5
Del-Chennai-D el	76,200	2,600	3.7
Del-Bangalore-Del	74,200	2,600	3.5
Del-Ranchi-Del	45,600	1,300	3.0
Del-Raipur-Del	46,100	1,300	3.0
Del -Kandla-Del	32,800	1,000	3.7
Del-Bilaspur-Del	48,900	1,300	3.0
The above calculation is based on fuel consumption per truck per round trip Source: Indian Foundation of Transport Research and Training

 

Truck rentals rose 21-23 per cent during November-May due to 16.5 per cent growth in the manufacturing sector and almost 25 per cent increase in imports and exports According to a compilation by IFTRT, truck rentals on medium and long haulage remained firm as the truck freight market and the manufacturing industry were expecting a Rs 3.20 per litre hike in diesel.

“The manufacturing sector alone is growing over 16.5 per cent. Apart from manufacturing, cargo offerings came from the import-export trade, agricultural commodities, both dry and wet products, and infrastructure,” he said.

When the economy started picking up in November 2009, truck rentals shot up due to a mismatch in demand and supply. Since then, the rentals have been rising consistently. The rentals also flared up due to the 10-12 per cent hike in tyre prices during January-June. “Diesel and tyres account for 90 per cent of the operating cost of a truck. Truck rentals have outpaced the increase in operating cost during the period. In June, effectively, truck rentals are overpriced by 8-10 per cent due to the demand for trucks outpacing the supply, following the increase in inter-state movement,” he said.

Since new national permits were not issued in May, it accentuated the shortage of trucks on trunk routes, Singh said.