Higher Fuel Prices Keep Truck Rentals Elevated Despite Softer Freight Demand in June: Shriram Bulletin

Higher fuel prices kept truck rentals elevated across key freight corridors in June despite subdued freight demand, according to the latest Shriram Mobility Bulletin. The report noted moderate month-on-month increases in rentals on several major trunk routes, while fuel sales and FASTag collections declined, pointing to weaker vehicle movement. It also expects logistics activity to remain subdued through July due to the onset of the monsoon.

Truck rentals increased by around 2% on the Mumbai–Kolkata–Mumbai route, 1.8% on the Delhi–Bengaluru–Delhi corridor and 1.7% on the Delhi–Kolkata–Delhi route during June. Other major routes, including Delhi–Mumbai, Delhi–Hyderabad, Delhi–Chennai, Mumbai–Chennai and Guwahati–Mumbai, also recorded modest gains, while the Bengaluru–Kolkata and Bengaluru–Mumbai corridors remained flat, reflecting weaker demand in parts of southern India. On a year-on-year basis, the Delhi–Kolkata route recorded the highest growth of around 15%, followed by Bengaluru–Mumbai at approximately 11%.

"Truck rentals remained elevated, driven by higher fuel prices. However, freight demand continues to be subdued, resulting in lower fleet utilisation levels across the industry. With monsoon activity gathering pace, trucking activity is likely to remain range-bound through July," said Sudarshan Holla, Joint Managing Director & Chief Operating Officer, Commercial Vehicles, Shriram Financ

Vehicle sales trends were mixed during the month. Bus sales rose around 24% month-on-month, while agricultural tractor sales increased by approximately 18% ahead of the Kharif sowing season. Commercial tractor and earthmoving equipment sales also posted gains. However, passenger car sales declined by about 2% sequentially, while e-rickshaw sales fell by around 3%. Compared with a year earlier, goods carrier sales increased by around 21%, passenger car sales by approximately 28% and three-wheeler goods vehicle sales by about 42%.

Electric vehicle adoption continued to strengthen during June. E-two-wheeler sales increased by around 13% month-on-month, while e-three-wheeler sales rose by approximately 10%. On a year-on-year basis, e-two-wheeler sales grew by around 91%, and e-three-wheeler sales more than doubled, rising approximately 103%, according to the bulletin.

Fuel consumption and tolling data also reflected softer freight activity. Petrol consumption declined by around 3% month-on-month, while FASTag collections fell by approximately 3.6% in volume and 1.3% in value, indicating lower highway traffic compared with May. The bulletin added that easing crude oil prices could help reduce pump prices in the coming weeks, offering some relief to fleet operators.