Truck rentals fell 3-4% in March

Fruit and vegetables dispatch declines by 20% due to unseasonal rains, factory cargo offering remains low

Truck rentals fell three to four per cent in March, month-on-month. There was a small uptick in cargo offering from the manufacturing sector. However, it failed to make up for the 20 per cent drop in fruit & vegetables cargo owing to unseasonal rains across eight states, data by the Indian Foundation of Transport Research and Training (IFTRT) showed.

Another reason for the decline in truck rentals is unseasonal rain across eight states during March that led to fall in cargo dispatches of fruit and vegetables during the month.

Truck rentals fell by about 4.5% in February, but has increased by about 4.5-5.5% during the first week of March, said IFTRT.

Unseasonal rains across eight states have also led to delay in harvesting of wheat and pulses in these states, said IFTRT, adding that there has been a 30-80% damage to various crops in these states.

"The situation has been further accentuated by not enough expected dispatches from factories to the distributors across the country as normally happens during last month of the fiscal every year as manufacturers in order to improve their balance sheet carry out maximum output during March every year," added the association.

IFTRT also noted that the Rs 1.21 per litre cut in diesel price on April 1 will impact the truck rentals next month, which may be dull due to late or less crop harvesting and less employment to trucks.

Diesel prices have fallen a more than 22% from their peak levels in September-end last year, while truck rentals have only fallen 5-10% during this period.

According to industry estimates, about 78% of trucks are in the unorganised sector and demand for commercial vehicles has significantly improved since September last year. In December 2013, total sales stood at 180,000 units which rose to 213,000 in December 2014, according to the Society of Indian Automobile Manufacturers statistics.

IFTRT said increase in truck sales for last two quarters by about 20-30% for various categories (5 ton-49 ton range) has largely been induced by 15% drop in medium and heavy truck fleet. There has been strong expectancy among fleet owners for huge demand for heavy multi-axle trucks and trailers in the coal belt of Chattisgarh, West Bengal, Madhya Pradesh, Odhisa and Jharkhand due to coal block auction by the government, it added.