Truck rentals recovered on a sequential basis in October, but still low on a year-on-year basis, data from the Indian Foundation of Transport Research and Training (IFTRT) shows. IFTRT is a research body that tracks the commercial road transport sector.
Rentals on trunk routes went up by 3-4 per cent in October against September levels because of increased fleet utilisation by 10-15, due to peak festival season which drove consumer spending.
October witnessed higher cargo. There was a 15-20 per cent rise in arrivals of fresh fruits and vegetables in the wholesale markets. There was also a diversion of truck fleet to intra-State operations to cater to paddy procurement in several states, IFTRT said. Also, there was higher movement of retail parcel, part load dispatches of electronic goods, consumer durables, garments, gift items, confectionery, dry fruits, among others.
However, October 2012 rentals are still subdued on a year-on-year basis, reflecting excess capacity in the truck market. Compared with rentals last year, rates this year are lower by 1-2 per cent on most trunk routes.
Following the diesel price hike of Rs 5 a litre in September, truck rentals rose 12-15 per cent. But, within a week, the freight market resisted due to continued low cargo offerings. As a result, rentals settled down with an increase of 5-6 per cent in the open market for the full truck load (FTL) on trunk routeswhich constitute almost 70 per cent of the cargo moved by road, IFTRT said. Truck freight in the case of contractual business was adjusted immediately after the diesel price hike by 4-5 per cent between transport contractors and corporate hirers. Contract transport now comprise 25-30 per cent of freight volumes from manufacturing and commodity sectors. These transport contracts have an in-built escalation clause to reflect the corresponding revision in diesel price.