Logistics

Truck rentals plunge, hit by new Covid-19 wave

New Delhi | Updated on April 14, 2021

Drop in arrival of food items and vegetables at mandis, says transport research body

Truck rentals have plunged beyond expectation in the first fortnight of April, prompted by a surge in Covid-19’s new wave that has led to a decline in the arrival of food and vegetable items at the mandis (Agriculture Produce Market Committees or APMC), according to the Indian Foundation of Transport Research and Training (IFTRT), a transport sector think tank.

APMCs were set up by the State governments to ensure good price discovery for farmers and to prevent retailers from having an undue bargaining advantage.

Covid-19's new wave in the last fortnight has led to a decline in arrival of food and vegetable items at the APMCs, with a 10-15 per cent drop in demand from restaurants and hotels, said IFTRT’s Senior Fellow S.P. Singh.

Dispatches from factory gates, too, dropped lower by a similar 10-15 per cent.

The worst hit was production in Micro Small and Medium Enterprises (MSME), although diesel and tyre prices (two main variables operating expenses) have remained unchanged over the previous fortnight of March 2021).

RENTALS DROP

Consequently, truck rentals on trunk routes plunged beyond expectation for round trips on an 18-20 tonne payload between April 1 and April 14, said IFTRT.

Rental charges on the Delhi-Mumbai-Delhi route dropped 16 per cent on April 14 against April 1 (from Rs 1.35 lakh to Rs 1.15 lakh), the two big metros in the North and West. Both the cities face a sharp surge in Covid-19 cases.

Also, rentals on the Delhi-Nagpur-Delhi route have plunged by 10 per cent (from Rs 1.07 lakh to Rs 96,800), the research body said referring to Nagpur, the central point of the country that has a lot of warehouses given the location.

Similarly, rates on the Delhi-Ranchi-Delhi sector have plunged 15 per cent (from Rs 1.17 lakh to Rs 1 lakh), with the eastern city facing a sharp surge in Covid-19.

Rates on the Delhi-Chennai-Delhi sector are down 13 per cent (from Rs 1.55 lakh to Rs 1. 35 lakh), while truck rentals on the Delhi-Kandla-Delhi route have dropped by 15 per cent (from Rs 1.02 lakh to Rs 86,000).

Overall, on 75 medium and long haulage truck routes tracked by IFTRT, trucking business has faced a sudden slump after bouncing last month, due to fears of a “direct or backdoor lockdown” across the country.

Fleet utilisation down, drivers head home

Fleet utilisation is down to 60 per cent and given the emerging trend of truck drivers preparing to return to their home towns or villages to escape the new wave of coronavirus, the situation for trade, commerce and industry is grim, leading to panic in the transport business.

That said, the Government has done its bit by extending the payment of road tax or permit fee by three more months up to June 30, 2021. Also, for the second consecutive year, the annual hike in insurance charges (with effect from April every year) have been avoided at the orders of the regulator, which has come as a relief for fleet owners. But if the situation remains dull, truckers may default in paying their equal monthly instalments (EMI) for truck purchase. Also, truck unions may demand yet another moratorium, predicted IFTRT’s Singh.

Published on April 14, 2021

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