The Hindu Business Line : Truck rentals on the upswing

Bangalore, Nov. 11 That the economy is inching towards positive growth and stability is reflected not only in the continuous upswing in truck rentals in October, but also in the rise in truck sales.

Trucking trade has been seeing an improvement since April when agriculture commodities helped in the recovery of rentals, while, the manufacturing sector, which hit the double figure in the last month, after inching in single figure since the economic slowdown last September, helped it neutralise the impact of lower agri-commodities movement.

According to the monthly report of the India Foundation of Transport Research and Training (IFTRT), rentals on major trunk routes rose 4-5 per cent during October 8 to November 7, while truck sales itself hit a positive growth at 59 per cent, on a lower base of 12,335 during the period in 2008.

Growing demand from the manufacturing sector — which provides 70 per cent of the freight load to the trucking industry — has pushed up the rentals from a minimum of Rs 1,200 a round-trip to Rs 23,500 a round trip to a maximum of Rs 3,400 a round trip to Rs 67,000. However, agriculture commodities — fruits, vegetables and pulses — played spoil sport this time due to depressed monsoon resulting in lower production and hoarding.

Good arrivals of summer fruits and vegetables and wheat procurement in April led to the surge in truck rentals on an average by five to six per cent. A drop in the truck fleet also aided the increase in rentals during the period.

However, the current increasing trend is attributed to the steady demand growth for movement of freight from manufacturers. . The increase in truck sales owes itself to the improvement in the infrastructure sector and mandate for a countrywide adherence to the emission norm of Euro III from April, 2010. Also, lower interest rate — which was a five per cent reduction to 11.5 per cent in the last three months — fuelled the growth in sales of commercial vehicles, said IFTRT.

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