Truckers charging transporters more to cushion fuel hike
Truckers have started charging transport operators higher than before, so much so that they are recovering the increased cost due to diesel price rise, the data maintained by Indian Foundation of Transport Research and Training (IFTRT) shows.
However, the body of transporters, intermediaries and logistics operators, the All India Motor Transport Congress (AIMTC) has denied these claims, saying that a major part of fuel price rise happened in September, and it is hurting the business.
This peculiar discord suggests that while truck owners have been able to pass on rising fuel prices to their customers, namely transporters, the latter are unable to increase the charges they apply to their customers, such as manufacturers and food traders.
Diesel prices in Delhi have risen by ~11 per litre in the first eight months of the year (and by more than ~14 to date). To make a DelhiMumbai-Delhi round trip, the cost increase was ~6,930.
However, the rent of a truck for plying on that route increased by ~9,900 in the same period, from ~81,000 on January 1, outpacing the increased cost due to higher diesel price, the data shows.
Due to an unprecedented rise in consumer demand vis-à-vis supply of truck capacity, truckers were able to raise prices and absorb a higher fuel cost, S P Singh, coordinator at IFTRT, said. The institute maintains a repository of trucks plying along the busiest transport routes in the country.
“Though the second quarter of the financial year has traditionally been lean with regard to consumption, we are seeing a month-overmonth growth in consumer demand this time, for the first time in the last few years,” he told Business Standard.
In 2018-19, truck sales have shot up phenomenally. Sales of medium and high commercial vehicles have increased 63 per cent, while those of light commercial vehicles, by 36 per cent, over a low base of last year owing to demonetisation and GST.
However, the transporters' body, intermediaries and logistics operators, the All India Motor Transport Congress (AIMTC) has denied these claims, saying that most of the fuel price rise has happened in September as well, and it is hurting the business.
“Diesel price is increasing continuously this month, around ~5 till date (month to date), and it is (proving) detrimental to our operations. If the government does not consider reducing (fuel prices) soon, we may have to think of another chakkajam in future,” Kultaran Singh Atwal, chairman of AIMTC said in a release.
The AIMTC had mobilised its members for a blockade at the end of July, but had called off the strike after some promises from the finance and road ministries.
Contradicting IFTRT's data, Atwal said that the actual rise in fuel costs for transport companies has been higher than that experienced by the truckers due to a variety of factors, and that it is increasing daily.
“Delhi to Nashik used to cost us about ~40,000 per trip at the end of August. IT now costs us ~45,000 or so,” he said. Apart from diesel, expenses such as safety and security of the goods, administrative costs too add up for transport companies.