The truck rentals in India are seeing a sharp decline for over the past 6 months, according to a report of the Indian Foundation of Transport Research & Training (IFTRT). The freight rentals have gone down by 15%, averaging around 2 – 3 per cent per month from November 2018 to May 2019.
The major reasons to be considered for this freight downfall are the plunge in the factory output and the increase in cargo capacity. There has been no major fuel price increase in the past two months due to the prevailing Lok Sabha elections and yet the freight has been in a downshift.
“The truck that would earlier make three trips in a month now makes 2 and transporter revenue has fallen by about 30%”, said SP Singh, Coordinator, IFTRT. This has resulted in a steep drop of monthly revenue for fleet operators as well as truckers.
“Wheat harvest is over but summer fruit and vegetable load continues and the mango season will go for another two months, this is partially compensating for the drop in factory load and infrastructure related cargo”, said SP Singh.
The agri-cargo holds the potential to make up for half of the freight downfall. Altogether, both factory output and infrastructure is lying low and the e-commerce domain which is flourishing well makes up only about 5-6 per cent of the total cargo sector and is not able to make any considerable difference to the shortfall of the freight. The impact lies on medium and intermediate truck sales because the containerized vehicles are the ones that get into the agri-cargo segment.
About recovery, Girish Wagh, President, Commercial Vehicle Business Unit, Tata Motors was quoted as saying, “Factory output and consumption are both down and Q4FY19 was the worst in terms of demand for trucks. But there will be pre-buying tail wind on account of BS6 so things should improve in the second half of the year but commercial vehicle (CV) industry is cyclical and we are in the 7th year of growth so we can see de-growth next year.”
For the truck makers as well as the transporters, they are most likely to see no sign of improvement anytime soon before the second half of the year. The sales are currently experiencing serious downfall and everyone in the industry at this point is waiting for its revival and the sales volumes to improve.
