Saturday, 4 October 2014

Truck rentals make smart recovery in September

CHENNAI : As against a drop of 2%-3% last month, truck rentals have made a smart recovery during September with an increase of 4%-5% on trunk routes . The arrivals of vegetable and fruit commodities into APMCs have gone up by 10%-15% and SME manufacturing units despatched over 15%-20% more goods / products into trading centres to create extra stocks for the ongoing peak festival season and increased consumer spending, said the latest monthly report by the Indian Foundation of Transport Research & Training (IFTRT).

The withdrawal of monsoon and beginning of peak festival season brought extra activity into the trucking business from the second half of September 2014 as small and medium manufacturing units (SMEs), constituting about 70%-75% of manufacturing output in the country, increase the despatches, at least by 15%-20%, to meet the demand from wholesalers and distributors across the country, who have been preparing timely inventory level to meet the festival demand in light of increased consumer spending. These SME manufacturers are predominantly from the electrical goods and electronic items, furniture and fixture items, gift items, toys, paints, construction material, low price consumer durables, mass consumption FMCGs sectors and demand has come from tier-II and tier-III cities apart from leading metro towns. However, the large scale corporate size manufacturers, which constitute 20%-25% of the country's total factory output, remained docile and their production and despatches remained almost flat. The more redeeming contribution to cargo volumes came from vegetable and fruit commodities with increase in despatches by 10%-15% to APMCs as against 15%-20% drop last month. This substantial cargo appreciation from agriculture produce and SME units led to 4%-5% increase in September 2014 truck rental charges on the trunk routes across the country.

The good news is the skipping of the latest monthly diesel price hike scheduled for September 30 2014. The monthly incremental 50 paise diesel price hike started from January 2013 has now resulted in erasing the "under recoveries" of oil marketing companies. Also with international crude price plummeting to $93/barrel, the window for the decontrol of diesel price has now been opened. Moreover, now diesel price is expected to be cut by Rs 2.50 to Rs 3.00 per litre in the current month. "This is a good augury for the stability of road transport in India," said SP Singh, senior fellow and coordinator, IFTRT.



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