Freight rates may stay high despite stir call off

Amit Mitra Hyderabad | Updated on August 24, 2011

Trucks lined up in Namakkal during the strike. — E. LakshmiNarayanan   -  THE HINDU

Even though road transport operators in the southern states have called off their six-day strike following a Government assurance on Tuesday evening, this may not immediately apply the brakes on the rising road freight rates.

Transporters expect freight rates in the South to remain firm in the wake of non-availability of vehicles and sudden surge in demand after the strike.

Commodity prices

“It may take another ten days for all vehicles to hit back the road and only after that, would freight rates soften to the pre-strike levels,” Mr Pavan Kumar Gupta, President of the Hyderabad Goods Transporters Association, said. Transport operators feel that freight rates will rule 15 to 20 per cent higher than the pre-strike levels at least for the next ten days, fuelling fears of further hike in prices of vegetables and other commodities.

Some transport companies said the freight rate between Hyderabad and Madurai was ruling at Rs 21,000 on Wednesday, as against Rs 18,000 a week earlier. Similarly, the rate between Hyderabad and Chennai was Rs 20,000, as against Rs 17,000 before the strike.

Demand surge

The rates may further nudge up in the next few days in the southern region as a spurt in demand is normally expected in the immediate aftermath of a strike. “For instance, the demand for vehicles from Hyderabad to various destinations has risen to over 650, but the current availability is only 500,” Mr Gupta told Business Line.

Prices of fruits, vegetables and other commodities have shot up in these States during the strike. For instance, sugar prices moved up by about Rs 60- Rs 70 a quintal in the last few days, while the textile trade at Erode was reportedly hit by almost Rs 150 crore.

Published on August 24, 2011

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