The lower demand resulting in lower truckload on long routes has led to a drop of 25% to 30% in the monthly revenue of truck operators. The underperformance in terms of fleet utilization is becoming a problem for these operators.
The Indian Foundation for Transport Research and Training (IFTRT) has reported that low factory output at the leading industrial hubs has resulted in 25% less cargo for different trunk route destinations. Even the fruits and vegetable arrivals at all APMCs across India have witnessed a drop of 15% to 20%.
In the month of May-19, the truck rentals touched a low and since then have remained in the range of +.5%. The major routes have reported a decline in freight rates with Delhi-Mumbai-Delhi witnessed a drop of 11.4%, Delhi-Chennai-Delhi, and Delhi-Bengaluru-Delhi both saw a drop of 13% while Delhi-Hyderabad-Delhi freight rates were down by 12% and Delhi-Kolkata-Delhi were down by 11%.
The IFTRT coordinator SP Singh has expressed concern on this decline in freight rates as this would lead to default in EMI by the transporters and the sector may witness restructuring of repayment schedule for an existing truck loan contracts by fleet owners with NBFCs / auto finance banks.
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