Truck rentals have gone up across key routes since the start of June as states have begun easing restrictions, according to a report by the Indian Foundation of Transport Research & Training (IFTRT).
As COVID-19 restrictions ease in states, truckers anticipate business recovery, but rising diesel prices remain a cause of concern. Rentals have gone up across key routes since the beginning of June, according to a report by the Indian Foundation of Transport Research and Training (IFTRT).
Truck rentals shot up by 9 to 14 percent in the first half of June, the report by the Delhi-based think said. Meanwhile, the price of diesel rose by Rs 2.60 (in Delhi) and that of tyres jumped up by 6 to 8 percent during this period.
These two together account for 90% of the variable cost component of the trucking business, the report cited by Business Standard said.
According to the IFTRT data, truck rentals rose by 11 percent on the Delhi-Mumbai-Delhi route, by 10 percent on the Delhi-Hyderabad-Delhi route, 14 percent on the Delhi-Kolkata-Delhi route, and 12 percent on the Delhi- Chennai-Delhi route.
The major reasons for the sharp rise in truck rentals include an increase in the factory output of most bulk goods, last year’s low base, and partial lifting of lockdown restrictions in several states, the report suggests.
Earlier, truck rentals had recorded a cumulative decline of 23 to 27 percent in April and May due to the impact of COVID-related curbs, according to another IFTRT report. Back then, the rise in fuel prices and low demand also hit the truck operators.
"The increase in rentals has given a breathing space to the goods fleet owners after the sharp decline in freight rates by 18%-27% in April and 5%-8% in May 2021 because of the regional shutdowns and the fall in consumer spending,” SP Singh, senior fellow and coordinator, IFTRT, said in a statement.
This, along with the confusion in the management of the pandemic, affected the common man and trade and commerce, he added.
Meanwhile, experts have said that though the uptick in demand suggested by a rise in truck rentals is a positive sign, it should be kept in mind that the growth has been calculated on a very low base. They asserted that demand and supply dynamics in the coming months will define the future trajectory of freight rates.
“Close to 30-35 percent trucks are still idling,” Balmalkit Singh, chairman, core committee, All India Motor Transport Congress told Business Standard.
Though it’s a marked improvement from last month, the pain for the transport sector will linger on till all the trucks are deployed and rates continue to firm up, he added.
First Published: IST