Gujarat Inc set to face hike in transport costs

Industries in Gujarat might be in for another setback as transporters in the state are demanding a hike in freight rates.

The demand for a revision of contracts has gained pitch because the price hike in petrol has been rolled back partially from Tuesday night, while the prices of diesel have not been reduced.

Transporters of Rajkot have already given an ultimatum to the industries, stating that November 16 will be the date from which the revised rates will be applicable.

Meanwhile, the transport associations of other districts have also been told to revise their freight charges as well.

It may be stated that in August transporters of the state had supported the strike called by the All India Motor Transport Congress (AIMTC) against the proposal of service tax levied on the industry.

With trucks remaining off the roads for a few days, the industry was hit hard.

The Rajkot Goods Transport Association has already announced an increase in contract rates with various companies.

The Rajkot association is seeking about an eight per cent hike in freight charges on line with the recent price hike of eight per cent on diesel.

A Rs 2.12 per litre hike makes diesel available for Rs 30.09 per litre and transporters say that the hike is the steepest in the last few years.

The members of the Rajkot transport association are mainly engaged in moving minerals and lignite for thermal power stations from mines of Saurashtra and Kutch.

"Our transporters have urged us to revise the freight charges in view of the recent price hike of fuel. It is difficult for a FMCG player to agree to this due to the competition in the market. However, we are keeping an eye on the situation," said Manoj Nambiar, sales manager, Aswin Vanaspati Industries, based at Vadodara.

Mukesh Dave, general secretary of Akhil Gujarat Truck Transport Association (AGTTA), said, "An increasing number of toll booths on highways had already increased our cost by about five to ten per cent depending upon the destination. The truckers in open market have already increased the freight charges according to the hike in diesel prices. The transporters working under contracts with the industry had not been able to increase their fares due to the terms set by the consignor. It is unusual to demand for a revision of agreement during the on going term but this time it seems inevitable for us."

At present the freight charge between Ahmedabad and Rajkot is about Rs 1,800 to Rs 2,000 per 10 tonne of cargo.

Similarly, the charges for Ahmedabad-Vadodara and Ahmedabad-Surat are Rs 1,800-2,000 and Rs 3,700-3,900 per ten tonne, respectively.

"Surprisingly there is disparity between diesel prices across the nation. The diesel in Daman is about two rupees cheaper than that in Gujarat. In this case it is difficult for Gujarat-based transporters to compete with the trucks coming from other states or areas. We are planning to bring it to the notice of authorities," said Dave.

"We have been approached by the Rajkot Association to co-operate with their agitation by a written appeal. Things will become clear as soon as the market in the state will start working in full swing after the festive fever. We will discuss the issue with the members and decide how to co-operate with the demand of revising the freight charges agreed in contract," said Madan Jain, president, V V Nagar and Anand Transport Association.

The industry is yet to chalk out a strategy to the transporters demand. "We cannot transfer the additional burden onto customers. We are not sure how we will adjust this. We may have to pass on at least 50 per cent burden on end user in case we have to agree with the truckers," said Nambiar.

(With inputs from our Ahmedabad and Surat bureaus)