The Hindu Business Line : Truck rentals up by 15% during Oct '05-Mar '06

Truck rentals on trunk routes went up by 15 per cent during the six-month period (October 2005 to March 2006), even though there was no hike in diesel prices.

According to a research report, corporate and bulk goods consignors have increased their freight rates in annual transport contracts for fiscal 2006-07 ranging from 10-12 per cent for truck hire from big transport contractors. However, the increase has not hit the profitability of companies significantly in the backdrop of buoyant economy.

Meanwhile, during the first three weeks of April, freight rates have hardened on intra-State trucking movement due to arrival of wheat crop in several States and the peak summer fruit season has triggered additional cargo from all parts of the country. This trend is expected to continue till June, it added. The rates have been hiked for the first time in the last two decades , said a report by Indian Foundation of Transport Research and Training which is an autonomous organisation engaged in research and monitoring of transport and automotive sector. The steep increase in freight rates has been driven by the Supreme Court judgment (November 2005) banning the overloading of trucks.

Other factors driving the upward move of rentals include 9.3 per cent growth in manufacturing sector, construction industry boom, 25 per cent import-export increase and 8 per cent GDP growth, it said.

Last fiscal, the diesel price went up by Rs 3.50 per litre - Rs 2 per litre in September 2005 and Rs 1.50 took place in June 2005.

The Supreme Court has upheld the illegality of various notifications issued against fixed monthly fee by State Governments permitting free movement of overloaded trucks. The Apex Court directed the State Governments that excess cargo in a truck over the prescribed gross weight limit must be offloaded before continuation of its further journey.