 "30% trucks in TN transport cluster idle for lack of cargo")
Over 30 per cent of the trucks at Namakkal in southern Tamil Naidu are idle, as recession combined with high input costs has hit one of the country's largest truck transportation industry clusters, which consists predominantly of individuals who own a single truck each.
The industry is under pressure owing to non-availability of cargo, since production has declined across sectors and infrastructure projects are not moving. And successive diesel price hikes are making things worse, said K Nallathambi, president, Tamil Nadu State Lorry Owners' Federation.
According to S Karthik, secretary, Southern Region Bulk LPG Transport Owners Association, Namakkal, an estimated 45,000 trucks (over 85 per cent of them owned by single-lorry owners) are in Namakkal now and 30-40 per cent of them are idle. Trucks that earlier used to run for 23-25 days in a month are now out on the roads for just 10-15 days.
People have invested heavily in these vehicles, since they were bringing in good revenues. For instance, the 4923 model, which carries equipment for projects mainly in the power sector, brings in about Rs 3 lakh a month for truck owners, while the truck cost some Rs 34 lakh.
"Many of us have invested in these vehicles, to cater to projects like wind mills. But no new wind mills are coming up in the country and BHEL projects have also slowed down, leaving the vehicles idle," said S Prabhu, the owner of a truck.
According to the Indian Wind Turbine Manufacturers Association, in 2011 companies added wind mills which can generate around 1,000 Mw of power, whereas in the first half of 2012 only 150 Mw was added. Projects worth about Rs 7,000 crore came up in 2011, compared to just around Rs 1,300 crore in 2012.
According to industry estimates, nearly 200 container trucks used to load cargo at various manufacturing units of BHEL every day. Today, not even 20 container loads are needed.
The other major segment which has been hit is rigs used for drilling bore-wells, with each vehicle costing around Rs 80 lakh. This segment was hit mainly due to diesel price hikes, and truck rentals have dropped by around five per cent, with 15-20 per cent all-round drop in cargo availability across the country.
They also said during the good times the vehicle population across the segment in and around Namakkal increased substantially - creating a major demand-supply mismatch now. There are 10,000-11,000 trucks within a radius of seven km, according to local industry representatives.
Input costs have also played a role. Truck owners said the price of a pair of tyres is as high as Rs 34,000-35,000 today, compared to Rs 22,000 about 18 months ago. The insurance premium has increased to Rs 10,550 from Rs 6,260 and toll charges have gone up by nearly 20 per cent. About 83 per cent of a truck's income goes into tolls and diesel charges. The balance is used for loan repayment, maintenance, insurance and tax.
On the other hand, rentals have fallen by around 15-20 per cent due to a drop in cargo availability, they noted. "Owners are not able to venture into new businesses, since this part of the state is not suitable for agriculture and also lacks industrial activities," said Karthik.
Fleet owners are hoping that the festival season later in the year brings an increase consumer spending, leading to an improvement in the business climate and the freight market.
The industry is under pressure owing to non-availability of cargo, since production has declined across sectors and infrastructure projects are not moving. And successive diesel price hikes are making things worse, said K Nallathambi, president, Tamil Nadu State Lorry Owners' Federation.
According to S Karthik, secretary, Southern Region Bulk LPG Transport Owners Association, Namakkal, an estimated 45,000 trucks (over 85 per cent of them owned by single-lorry owners) are in Namakkal now and 30-40 per cent of them are idle. Trucks that earlier used to run for 23-25 days in a month are now out on the roads for just 10-15 days.
Also Read
The worst-hit is the trailer segment, due to the slowdown in orders from public sector units like Bharat Heavy Electricals, he said. Some 4,000-5,000 trailers are parked in Namakkal. These include heavy vehicles like the 4923 model.
People have invested heavily in these vehicles, since they were bringing in good revenues. For instance, the 4923 model, which carries equipment for projects mainly in the power sector, brings in about Rs 3 lakh a month for truck owners, while the truck cost some Rs 34 lakh.
"Many of us have invested in these vehicles, to cater to projects like wind mills. But no new wind mills are coming up in the country and BHEL projects have also slowed down, leaving the vehicles idle," said S Prabhu, the owner of a truck.
According to the Indian Wind Turbine Manufacturers Association, in 2011 companies added wind mills which can generate around 1,000 Mw of power, whereas in the first half of 2012 only 150 Mw was added. Projects worth about Rs 7,000 crore came up in 2011, compared to just around Rs 1,300 crore in 2012.
According to industry estimates, nearly 200 container trucks used to load cargo at various manufacturing units of BHEL every day. Today, not even 20 container loads are needed.
The other major segment which has been hit is rigs used for drilling bore-wells, with each vehicle costing around Rs 80 lakh. This segment was hit mainly due to diesel price hikes, and truck rentals have dropped by around five per cent, with 15-20 per cent all-round drop in cargo availability across the country.
They also said during the good times the vehicle population across the segment in and around Namakkal increased substantially - creating a major demand-supply mismatch now. There are 10,000-11,000 trucks within a radius of seven km, according to local industry representatives.
Input costs have also played a role. Truck owners said the price of a pair of tyres is as high as Rs 34,000-35,000 today, compared to Rs 22,000 about 18 months ago. The insurance premium has increased to Rs 10,550 from Rs 6,260 and toll charges have gone up by nearly 20 per cent. About 83 per cent of a truck's income goes into tolls and diesel charges. The balance is used for loan repayment, maintenance, insurance and tax.
On the other hand, rentals have fallen by around 15-20 per cent due to a drop in cargo availability, they noted. "Owners are not able to venture into new businesses, since this part of the state is not suitable for agriculture and also lacks industrial activities," said Karthik.
Fleet owners are hoping that the festival season later in the year brings an increase consumer spending, leading to an improvement in the business climate and the freight market.