Many transporters have raised freight rates between 15-30% recently.

Steady rise in diesel prices 18 straight hikes in as many days through June 24 has pulled down truck plying rate to around 50% from 58% on June 8. The increase in freight rates resulting from the high costs that dented demand as well as the lack of availability of enough drivers have compounded the problem.

In absolute terms, from 8.7 lakh (58%) of the registered national-permit trucks plied on Indian roads on June 8, the number has come down to around 7.5 lakh on Tuesday, All India Transporters Welfare Association (AITWA) joint secretary Abhishek Gupta told FE. Truck plying, an early indicator of inter-state commerce picking up, had steadily improved recently from a low of 4.5 lakh (30%) on May 8.

Getting plying rate return to over 10 lakh vehicles or 70% of the national permit-registered that prevailed before the outbreak of Covid-19 pandemic, now hinges on driver availability and willingness of businesses to pay higher freight rate after about 15% increase in diesel prices since June 7.

“Back-to-back increase in diesel price is resulting in mounting losses for transporters, who can’t pass on daily price increases to customers,” Gupta said.

Oil retailers have revised diesel prices on daily basis since June 7. The diesel prices in Delhi have gone up from Rs 69.39/litre on June 6 to Rs 79.88 on Wednesday, up by 15.1%. The transport fuel’s price went up by 14.7% to Rs 78.22/litre in Mumbai during the period.

Usually, freight revision by transporters are done only after 5% or 10% increase in diesel prices. Many transporters have raised freight rates between 15-30% recently.

“But, in today’s market, no customer is willing to pay more and only expecting reduction in cost,” Gupta said, referring to difficulties to transmit higher input cost. As a result, transporters are not being able to give risk-incentives to drivers by way of enhanced pay for taking risks at the of Covid-19 pandemic. Many miffed drivers have preferred to go back to their villages due to no increase in pay or lower than expected increase, Gupta added.

After lockdown was imposed to check Covid-19, plying rate of trucks fell drastically. The rate was 8% on April 12, before improving to 24% on April 24, 30% on May 8 and 58% on June 8.