NEW DELHI 04/NOV/2014: Despite reduction in diesel prices twice totaling Rs 5.62 per litre in a span of 15 days, the truck rental/freight on trunk routes have not moderated. Contrary to the estimates of expected 3%-4% reduction in truck rentals because of cut in diesel price, the freight charges on 11 trunk routes including Delhi-Mumbai, Delhi-Nagpur and Delhi-Chennai have remained unchanged between October 1 and November 1, according to a report prepared by Indian Foundation of Transport Research and Training (IFTRT).
However, in case of contractual transport business, which constitutes about 25% of freight transport, the firms have reduced charges reflecting the cut in diesel price, says the report. The thinktank on transport issues said this has happened because all such contracts have escalation and de-escalation clause. According to industry analysts, this trend is not surprising since it takes sometime to reflect the impact of diesel price reduction on freight charges. \"We expect the freight charges to fall in the near future. Fuel price is one of the components that add to the freight charge but there are several other contributing factors. It seems because of high demand of trucks due to festive season the freight charges did not fall,\" said Chittarnjan Dass of All India Confederation of Goods Vehicle Owners\' Associations ( ACOGOA).
Some of the All India Motor Transport Congress ( AIMTC) executives also said usually in festive season there is more demand of trucks to ferry goods. \"You can see how the freight charges don\'t go up soon after there were minor increase in diesel prices. It\'s market force that decides the freight charge,\" said one of them. The IRTFT report also said the festival season buying spree and increased cargo availability to truckers from fruits and vegetables markets, manufacturing sector (particularly SMEs), diversion of 10%-15% the truck fleet with national permit to procurement of paddy, cotton, pulses, oil seeds and other cereal items led to continuous demand for truck fleet. \"Therefore, it enabled the truck rentals to remain firm and stable during October 2014 despite quantum fall in diesel price,\" said SP Singh of IFTRT.