The Hindu Business Line : Plea to evolve viable truck hire charges

THE steep increase in the inflation rate and the recent hike in the prices of tyres and commercial vehicles have given rise to the issue of evolving viable hire charges for trucks used for transporting commercial goods based on inputs cost structure.

A drop in the freightage (hire charges) rates in the last six weeks - despite the increase in the prices of tyres, commercial vehicles and the recent revision in the diesel prices - has underlined the need for a concerted effort by the Government, transporters (cargo booking agents) and the owners of fleets to address the issue, said the Indian Foundation of Transport Research and Training (IFTRT).

A three-year high of inflation at 7.5 per cent has already had its impact on the whole economy and the added burden of increase in the prices of tyres and commercial vehicles by three per cent and two per cent respectively, and a six per cent jump in the diesel price have begun to strain the trucking industry.

The truck hire charges on main trunk routes have started showing signs of decline since June, reflecting an inconsistency in rates and the returns on investment to truck owners.

With the Government's decision to fix a band 10 per cent for revision of petroleum prices, it is high time that a review of the cost structure is factored into the freightage rates being determined, IFTRT said.

The distortion in the freightage rates is due largely to the inherent problems of the industry like rapid growth in the truck population in the last 26 months, forcing large fleet carrying more or less same volume of cargo.

In some cases even resorting to overloading by higher capacity trucks, the steep increase in input costs has failed to reflect in higher freightage rate.