Decline in Truck Rentals Sparks Concerns in Logistics Sector

Truck rental demand fell in November on major trunk routes due to various factors like reduced urban demand and BS4 truck bans. This led to lower occupancy levels, higher logistics costs, and declining rental rates. Despite some agricultural output growth, transportation services continue facing challenges.

Truck rentals experienced a decline in November across key trunk routes, following the festive season surge, as demand for transportation services waned. According to an industry report, fleet occupancy levels dropped to around 60 percent.

Shriram Finance attributes this drop to a range of factors including poor urban demand, the ban on BS4 trucks in the NCR region due to air pollution, election activities in Maharashtra, and decreased agricultural produce movement.

These factors increased logistics costs and led to a decline in rental rates, particularly on routes such as Delhi-Chennai and Delhi-Bengaluru. Despite a slight rise in agricultural output, private consumption and vehicle sales continued to struggle, with notably reduced numbers in the electric vehicle segment.

(With inputs from agencies.)