Truck rentals buoyant in festival season, likely to remain firm in next fortnight: IFTRT

Fleet movement numbers till November 15 indicate that the momentum seen in October has not dimmed, according to data collated by the Indian Foundation of Transport Research and Training (IFTRT).

IFTRT said freight remained upward by 3 percent on trunk routes, supported by Diwali sales, 25 percent additional arrival of winter fruits and vegetables into agricultural produce market committees (APMC) or mandis, and kharif crop procurement by government and private trading houses.

It, however, also noted that due to weak economic sentiments, heavy truck and trailers sales are likely to remain dull during the fiscal 2020-21 and may spill onto the next fiscal.

In October, truck rentals saw a jump of 10-12 percent compared to September. The quantum jump in kharif crop harvest and micro, small and medium enterprises (MSMEs) rebounding led to this growth, the foundation noted.

"The truck rentals in the next fortnight are likely to remain firm despite festival season and kharif harvesting tapering off. But with 25- 30 percent of truck drivers going off on festival/Chhath Puja leaves, the idling fleet will bring scarcity of operating trucks on highways and hence truck rentals on medium and long haul should remain strong," said SP Singh, senior Fellow and coordinator, IFTRT.

The buoyancy in truck rentals shows that the economy is slowly getting its vibrancy back, thereby reflecting that the logistics business is on track. Indirect employment generated by every vehicle has a huge multiplier effect on the unorganised sector.

Truck rentals on the Delhi-Mumbai-Delhi route as of November 15 stand at Rs 1,18,200 for an 18-tonne pay load. On October 1, it was Rs 1,08,192.

The peak festival season has helped the trucking industry rebound during October and November 2020.