The Indian economy, which is in its recovery stage is slowly returning to normal. The indicators reflecting the movement of goods across the country are higher and in some cases rising to record level.
Nomura India Business Resistance Index released on Monday suggests that the economy is not far away from the pre-covid level. The report suggests that economic activity is currently only ~2 per cent below the pandemic level.
As per Sameer Narang, Chief Economist at Bank of Baroda, the recovery was driven by goods and services.
He said, “Consumer regimes in India and around the world have seen a shift from products to services as intensive services have not yet returned to the level they were before Covid.”
“While the recovery in logistics has been primarily driven by stockpiling and festive demand, this trend has remained stable,” he added.
As per the data from Indian Railways, the national transporter has registered highest ever loading figures i.e., 119.79 million tonnes (mt) of cargo during the month of January.
The rail freight in January 2021 increased by 8.7%. Earnings from freight grew 5.9% from a year earlier in January to ₹11,838.36 crore, showed government data issued this week.
During the pandemic, the reduction in rail freight traffic was limited as compared to many other sectors of the economy, as it was being used to transport essentials. Furthermore, due to fewer passenger trains, the railways took full advantage of empty tracks and increased the railway freight operations with freight trains running faster than usual. Also, many concessions were given to the public by the Indian Railways which helped grab more business. the railways waived payments for empty containers, which also led to an increase in the share of railways compared to other vehicles.
Rise in truck rental
The increase in truck rental are partly reflecting towards the increase in demand, along with rising diesel price.
According to the IFTRT, in January of this year, the rental of trucks loaded in different directions ranged from 6 to 50%.
Diesel prices continued to rise in January this year, as well as the quantum growth of the fruit, vegetable and food movement and the simultaneous increase in shipments from industrial areas, as well as the 2021 IFTRT. According to a February 2 research note.
E-Way Bill Packages
The E-way bill in January 2021, rose to 6.28 million, an increase of 10.5% over the previous year. The collections were at a record high in December, rising to 6.4 million, an annual increase of 15.9 percent. In January, e-payment packages fell for a month.
Apart from the above, some other logistics indicators also showed continuous improvement.
The port volumes have changed positively in December 2020 for the first time since February, notes India Ratings & Research on February 5, 2021. They grew by 7% month-on-month and 4% year-on-year, the note said.
The report further suggested, “Growth in December was led by annual growth rates for iron ore (14%), other liquids (16%) and container volumes (15%) and other commodity segments (13%). partly covered by a decrease in oil, lubricants (3%), fertilizers (7%) and thermal coal (11%) per year.
The increase in overseas deliveries has led to a shortage of port containers. With prices rising, there is a shortage of containers in many parts of the world, Nigam said, adding that work in India is no different.
Source: Bloomberg Quint