Truck Rentals and Freight Rates Surge in August Amid Festive Preparations and Trade Resumptions

Truck rentals climbed for the second straight month in August 2024, driven by festive preparations and post-election activities. Fleet utilization surged in the India-Bangladesh border region, and freight rates rose in multiple key routes. However, motor car sales dipped by 6% due to heavy rains, affecting showroom visits in specific regions.

Truck rentals continued their upward trend in August 2024, marking the second consecutive month of growth, according to the Shriram Mobility Bulletin. The festive season's approach and increased post-election activities have substantially driven demand across various transportation routes. Fleet utilization in the India-Bangladesh border region significantly improved, rising to nearly 60% from the previous 40%.

The resumption of trade activities between India and Bangladesh has notably increased truck rentals in the Kolkata-Guwahati-Kolkata route, registering the highest surge at 3.0%. The Delhi-Kolkata-Delhi and Delhi-Hyderabad-Delhi routes also witnessed increases of 2.7% and 2.3%, respectively. Freight rates in the Srinagar region rose by 10% due to apple harvest and poll-bound activities. In the Wayanad region, freight rates climbed because many trucks are engaged in rehabilitation work.

Shriram Finance Ltd. MD and CEO YS Chakravarti commented, 'As the festive season approaches, companies across India are intensifying efforts to boost production and supply, causing an uptick in truck rentals on key routes. The Srinagar area is particularly active due to the apple-picking season and pre-election activities, driving up freight rates. The reopening of trade at the India-Bangladesh border is also leading to higher fleet usage in that region.' However, recent floods in Gujarat have led to logistical challenges, affecting Andhra Pradesh and Telangana.

Motor car sales witnessed a 6% decline with 280,151 units sold in August 2024 compared to 297,623 units in July 2024 due to excessive rainfall, which affected showroom visits in Gujarat, Andhra Pradesh, and Tripura. Conversely, Goa, Kerala, and Haryana saw growth in vehicle sales. The two-wheeler segment saw an 8% month-on-month sales contraction in August 2024, though year-on-year sales rose by 6% due to festive anticipation. The used commercial vehicle market showed healthy year-on-year growth across all weight categories, with significant price increases.

In August 2024, petrol consumption rose by 2% month-on-month and 8% year-on-year. Diesel consumption dropped by 10% month-on-month, totaling 6.48MT. Toll collections saw slight month-on-month growth with a 7% year-on-year increase in volume and an 8% rise in value. Electric two- and three-wheelers registered declines year-on-year. E-way bill generation experienced a month-on-month increase in July 2024.

(With inputs from agencies.)