Truck rentals flat in Aug; sales crash 42% on bleak outlook, excess capacity
Sep 04 2013 , Chennai
“Truck rentals (on trunk routes) stayed range bound (+1 per cent or -1 per cent) in August. Though bumper apple crop in Himachal Pradesh and Kashmir resulted in improved cargo availability, heavy rains and floods in several states caused disruptions to utilisation of available truck fleet,” according to a statement of IFTRT (Indian Foundation of Transport Research and Training).
Truck rental on Delhi-Mumbai-Delhi round trip on a 9-tonne payload truck stood at Rs 54,000 on September 1 when compared with rate of Rs 53,400 on August 2. Delhi-Chennai-Delhi round-trip saw a marginal drop to Rs 81,800 from Rs 82,800 and Delhi-Kandla-Delhi trip rental was up marginally to Rs 41,800 from Rs 41,400.
Heavy rains and floods played havoc on utilisation of truck fleet in the past three months in most parts of the country and had caused extensive damage to summer fruits and vegetables during this period resulting in steep drop in truck rentals. But bumper monsoon season is now expected to reverse negative trends during coming months starting from end-September to November when next harvest season for fruits, vegetables, paddy, pulses and other food commodities is expected to improve the cargo availability.
“Besides, increased rural income may prop up spending and push demand for two wheelers, tractors, FMCG, consumer durables, textile, paints, construction material and other products leading to some revival of manufacturing sector and thereby improving truck fleet utilisation,” said S P Singh of IFTRT.
He also stated that any steep increase of diesel price by Rs 3 or Rs 5 per litre will lead to disproportionate freight hike by transport associations and unions like in the past. He urged the government to refrain from taking knee jerk action at the behest of oil marketing companies.
Meanwhile, saddened by the uncertain cargo outlook and under utilised truck fleet, transport operators remain cautious on new purchases. So, truck sales (5-59 tonne) crashed significantly at 42 per cent in August this year when compared with August 2012 with ICVs (intermediate commercial vehicle) also hitting the negative growth lane through drop in volumes by 29 per cent.
Sales of ICVs have by and large not dropped in line with M&HCV. But fall in cargo offering from agri and manufacturing sector has led to ICVs and even LCVs (light commercial vehicles) registering decline in sales.
Total sales of the trucks stood at 14,101 units during August this year when compared with 24,218 units in August 2012. All categories saw significant fall in volumes. Light commercial vehicle (5-7.5 tonne), intermediate commercial vehicles (8-14 tonnes), medium commercial vehicle (15-16.2 tonne), multi axle vehicles (25.2-31 tonne), multi axle trailers (30-49 tonne) posted decline of 24 per cent, 29 per cent, 50 per cent, 42 per cent and 59 per cent respectively.
With prevailing difficult economic scenario, the industry’s hopes now hinge on bumper food crop in the next season and upcoming festivals to boost consumer spending and thereby leading to improvements in truck sales.