Vibrant economy led to steep rise in truck rentals in 2010

Truck rentals during calendar year 2010 rose by 24-40 per cent on trunk routes, with robust manufacturing growth and high consumer spending.

However, the rentals stabilised during December and are expected to remain firm in the first quarter of calendar year 2011.

The Indian Foundation Of Transport Research and Training (IFTRT)said: "Unlike the annual feature of routine decline in truck rentals during December every year since year 2005, December 2010 witnessed consolidation of truck rentals on the back of a steep increase since December 2009 to the tune of 24.1-39.6 per cent on trunk routes, as this was supported by consistent double digit manufacturing growth, import-export cargo growing by 18-20 per cent and consumers' spending spree based on over 8.5 per cent GDP growth."

IFTRT senior fellow and coordinator, S P Singh, told Business Standard the ongoing Gujjar agitation in Rajasthan had not impacted truck rentals.

"Apart from increase in diesel price totalling Rs 5.40 per ltr since last year (Rs 36.6 to Rs 42 per ltr), tyre prices went up by 13-15 per cent. Diesel and tyres constitute 90 per cent of the variable operating expenses for a truck operating on the trunk route.

Combining the impact of variable operating cost increases and other related routine expenses, truck rentals have been outpacing the increase in various costs per month because freight offerings during 2010 have gone up by over 10 per cent from bulk cargo like cement, chemicals, iron and steel, metals and marbles, 18-20 per cent from general cargo/merchandise and 25 per cent from high-value goods like white goods, electronic items, readymade garments, automobiles, etc."

An IFTRT report further said overall cargo loading/despatches by truck transport touched 3,700 million tonnes during 2010 over the 3,200 mt of 2009, a rise of 15 per cent.

More, rampant overloading of trucks by 50-150 per cent in excess of their legal load limit has added to the revenues of fleet operators, with only 25-30 per cent increase in operating cost.

The expansion in multi-axle trucks has further helped truckers to overload.

The report said truck sales increased to 28,728 units during December, copared to 22,683 units in the corresponding period of last year.

With the double-digit growth in manufacturing, accompanied by better growth in import-export cargo, the demand for trucks is moving up and the same trend may continue in the next quarter.