Post Date : September 29, 2020
In what comes as a ‘breath of fresh air’ for the sea and road transportation segment, the sector recorded a continued recovery on a month-on-month basis in August although it remains lower year-on-year, according to India Ratings and Research (Ind-Ra).
Port volumes sustained the recovery trend that was recorded in the months of June and July by improving to 85 to 90 per cent of the pre-COVID levels. In August, E-way bill collections went up 2 per cent m-o-m while railway volumes were up 4 per cent y-o-y.
Although air transport activity too is headed towards normalcy, with plant load factor at around 65 per cent for flights; substantial fleet remains grounded and passenger numbers in July were significantly below normal levels.
The overall major port volumes have recorded a monthly improvement in August, though the volume trade remains lower y-o-y, says Ind-Ra.
Dwell time for import containers at JNPT Port recorded a monthly improvement to 22 hours in July with a gradual resumption of business activities. However, during the same period, port dwell time for export containers increased marginally to 75 hours in July.
The overall major port volumes recovered in August, reporting a decline of 10 per cent y-o-y. During April to August, the overall volumes fell by 17 per cent.The recovery in monthly volumes was led by 38 per cent and 29 per cent increase in imports of iron ore and fertilisers respectively.
Road transportation has seen an upward trend with a gradual increase in the availability of trucks and an increase in the supply of labourers, leading to a decreased railway market share which had increased in April, said Ind-Ra.
The market share of the road stood at 80 per cent during August. E-way bill collection at 49 million in August is gradually returning to normalcy. It stood at 86 per cent of the pre-COVID levels and remains 3 per cent y-o-y lower.
While stating about Fuel Consumption, Ind-Ra stated that Diesel consumption too witnessed a rise with a gradual pick-up in the business activities post lockdown. However, diesel consumption witnessed a m-o-m decline of 15 per cent and 12 per cent during July and August compared to the m-o-m decline of 11 per cent in July and August 2019.
While average freight rates witnessed a negligible increase, the impact of higher diesel prices is likely to weigh on profitability. Diesel prices though declined by about 10 per cent m-o-m in August.
Amidst GDP forecasts being revised further downwards, the recovery in corporate travel is deemed to be slower than Ind-Ra’s initial expectations and could remain under pressure even in 1H FY22.
Passenger traffic nearly remained nil in April and June due to the nationwide lockdown and travel restrictions.
Although domestic carriers started operations in May and June,the current passenger load factor at 59 to 76 per cent may not be truly representative of the actual recovery as a large number of aircraft are still grounded,said Ind-Ra.
Freight traffic in July stood at around 65 per cent of normal air freight volumes can be attributed to the overall weakness in economic activity, dearth of manpower and reduced availability of belly-load freight capacity with many passenger aircraft grounded.