Cost pressures mount for truckers amid West Asia conflict

Chennai: After remaining firm and showing a sequential increase in March, truck rentals on trunk routes may see a spike in April as the Indian trucking industry begins to feel the impact of the ongoing conflict in West Asia.

On the Delhi–Mumbai–Delhi route, rentals for an 18-tonne payload truck rose by 1.2% to Rs 170,000 in March, up from Rs 168,000 in February. Similarly, the Delhi–Kolkata–Delhi corridor witnessed a 1.8% increase to Rs 170,000 (from Rs 167,000). However, rates on the Delhi–Hyderabad–Delhi route remained flat at Rs 198,000, while the Delhi–Chennai–Delhi route saw a marginal increase to Rs 215,000 from Rs 214,000 in February, according to data provided by Shriram Group.

Last month, strong year-end industrial and consumption activity, along with stable fleet availability and no major supply disruptions, supported freight rates. However, LPG tanker movement was hit due to curtailed supplies.



Meanwhile, S P Singh of IFTRT pointed out that freight rates were under pressure in some segments during March. "While some support came from seasonal cargo flows such as a strong rabi harvest and the early arrival of summer produce, overall demand for trucking remained weak, particularly from MSMEs, which account for a significant share of road transport demand," he added.

Sudarshan Holla, joint managing director and COO, Commercial Vehicles, Shriram Finance, said higher toll charges from April 1, cost pass-through by tyre manufacturers, and the likelihood of rising fuel prices may push truck rentals higher in April. "If the conflict persists, cost pressures on operators will intensify," he added.

Industry representatives noted that if the geopolitical situation does not stabilise, the coming months could see further stress in the trucking industry.

Cargo availability could also be impacted by slowing economic activity, reduced consumer spending, and disruptions in the supply of raw materials.

The current challenges in the trucking industry have been further exacerbated by excess truck capacity in the market, driven by a recent surge in fleet additions supported by lower GST, input tax credit benefits, discounts from commercial vehicle dealers, and easy financing options, Singh said.
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