Truck Rentals Steady in July Despite Weak Freight Demand

Truck rentals across India's key trunk routes remained largely stable in July despite continued global economic uncertainty, uneven monsoon conditions and localised disruptions caused by flooding, according to the latest Shriram Mobility Bulletin published by Shriram Finance. The report said the logistics sector is now looking towards the festive season as the next major driver of freight demand.

The bulletin noted that global market uncertainty continued to weigh on demand for goods and vehicles during the month. Poor monsoon rainfall affected agricultural freight movement in several regions, while flooding in parts of Gujarat, Kerala and the Himalayan region disrupted trucking operations.

On a month-on-month basis, truck rental trends remained largely unchanged across major freight corridors. Bengaluru–Mumbai–Bengaluru recorded the highest increase of around 2.1%, followed by Kolkata–Guwahati–Kolkata at approximately 1.9%. Rentals on the Delhi–Hyderabad–Delhi and Mumbai–Kolkata–Mumbai routes rose by around 1%, while Delhi–Chennai–Delhi and Delhi–Bengaluru–Delhi posted marginal increases of about 0.9% and 0.4%, respectively. Rentals on the Delhi–Mumbai–Delhi, Delhi–Kolkata–Delhi, Bengaluru–Kolkata–Bengaluru and Guwahati–Mumbai–Guwahati routes remained unchanged, whereas Mumbai–Chennai–Mumbai recorded a marginal decline of around 0.6%.

Compared with July last year, truck rentals were higher across all major routes tracked in the bulletin. Delhi–Kolkata–Delhi registered the strongest increase at around 15%, followed by Bengaluru–Mumbai–Bengaluru at approximately 11% and Kolkata–Guwahati–Kolkata at about 9%. Delhi–Mumbai–Delhi and Mumbai–Chennai–Mumbai also recorded year-on-year increases of around 8% and 7%, respectively.

Vehicle sales trends during July were mixed on a sequential basis. Agricultural tractor sales increased by around 14% month-on-month, while goods carrier sales rose by approximately 8% and earth-moving equipment sales by around 6%. Sales of three-wheeler goods vehicles and construction equipment vehicles each increased by about 3%, while maxi cab sales were higher by around 17%.

On a year-on-year basis, however, all major vehicle categories recorded growth. Three-wheeler goods vehicles rose by around 47%, followed by earth-moving equipment at approximately 35% and maxi cabs at about 34%. Agricultural tractor sales increased by around 31%, goods carriers by approximately 29%, motorcycles and scooters by about 28%, and passenger cars by around 20%.

Electric vehicle sales continued to grow during the month. E-two-wheeler sales increased by around 7% month-on-month, while e-three-wheeler sales rose by approximately 16%. Electric passenger car sales declined marginally by around 1% compared with June. On an annual basis, electric passenger car sales increased by around 148%, e-two-wheelers by approximately 114% and e-three-wheelers by around 97%.

Sudarshan Holla, Joint Managing Director and Chief Operating Officer, Commercial Vehicles, Shriram Finance, said freight rates across key trunk routes remained broadly stable, indicating a relatively steady operating environment for transporters. He added that the upcoming festive season is expected to be an important demand driver for the logistics sector, with truck rentals likely to remain at current levels, although stronger cargo movement during the festive period could result in a modest increase in freight rates.

The bulletin also highlighted mixed trends in fuel consumption and highway toll collections. Petrol consumption increased by around 1% month-on-month, while diesel consumption declined by approximately 6%. Compared with a year earlier, petrol consumption was higher by around 8.6% and diesel consumption by approximately 9.4%. The report attributed the higher annual diesel consumption partly to increased use of diesel-powered irrigation pump sets in regions affected by poor rainfall and water shortages.

FASTag collections declined during July, with transaction volumes falling by around 4% month-on-month and collection value declining by approximately 1%. On a year-on-year basis, transaction volumes were lower by around 6%, while the value of collections increased by about 7%.