Fleet utilization surges in the Indo-Bangla sector, while seasonal and post-election activities raise freight rates across key regions.
Mumbai, September 05, 2024: Truck rentals surged across major routes in August 2024, marking a continued rise as the festive season and post-election activities stir the transport sector, according to the latest Shriram Mobility Bulletin. The demand for trucking services has notably increased, driven by both the upcoming holiday season and a resurgence in economic activities following state elections.
The reopening of bilateral trade between India and Bangladesh has led to a dramatic improvement in fleet utilization in the region, with the India-Bangladesh border area reporting a significant rise from 40% to 60%. The Kolkata-Guwahati-Kolkata route, a major artery for cross-border trade, saw the highest rental surge at 3.0%, followed by the Delhi-Kolkata and Delhi-Hyderabad routes, which registered 2.7% and 2.3% increases, respectively.
In the northern region, the Srinagar sector is experiencing a notable uptick in freight rates, spurred by both the apple harvest season and heightened political activities ahead of upcoming elections. Freight rates in this region soared by nearly 10% in August. Meanwhile, the Wayanad region has seen rising transportation costs due to a truck shortage, with many vehicles diverted to rehabilitation work following recent natural disasters.
YS Chakravarti, MD & CEO of Shriram Finance Ltd., commented on the market dynamics: “With the festive season on the horizon, industries are ramping up production and distribution, contributing to rising truck rentals across key routes. The reopening of Indo-Bangla trade routes has significantly boosted fleet usage, while regions like Srinagar and Wayanad are seeing sharp increases in freight rates due to unique local factors. However, floods in Gujarat have posed fresh logistical challenges, with Andhra Pradesh and Telangana facing similar pressures as they recover from recent flooding.”
The automotive market also saw shifts, with car sales down 6% in August, totaling 280,151 units, a drop largely attributed to heavy rainfall in regions like Gujarat, Andhra Pradesh, and Tripura. Meanwhile, Goa, Kerala, and Haryana experienced growth in vehicle sales.
Two-wheeler sales contracted by 8% month-on-month in August, but year-on-year sales were up 6%, as buyers anticipate increased demand during the festive season.
The used commercial vehicle (UCV) market remained robust, with strong year-on-year growth across all weight categories. Prices for 31 to 36-ton 4-wheel UCVs jumped by 12%, while the 3.5 to 7.5-ton category saw prices rise by 11%.
Fuel consumption trends mirrored the growing transportation demand. Petrol consumption rose by 2% month-on-month, an 8% increase compared to last year. Diesel consumption, however, dropped 10% in August, standing at 6.48 million tonnes. Toll collections also saw growth, with a 7% increase in volume and 8% rise in value year-on-year.
In the electric vehicle sector, the report showed declines in electric two-wheeler and three-wheeler sales, which fell by 26% and 3% year-on-year, respectively. However, e-way bill generation saw month-on-month growth in July 2024, indicating increased movement of goods nationwide.
As the festive season approaches, the transportation sector is poised for further growth, supported by both domestic demand and revived cross-border trade activity.
