Rating agency

in the report states that even at the new level since October, freight rates are still lower than the levels seen in the last quarter of last fiscal year, even the recovery of freight rates has been widespread, most combinations of road products experiencing increased freight rates.

Last month, 80-85% of the combinations saw an improvement in freight rates compared to August, while 15-20% were unable to pass on the rise in diesel prices due to fuel considerations. supply and demand, according to the report released Monday.

Over the past two or three years, the national road freight industry has encountered many speed breakers. While the new axle load standards resulted in a noticeable drop in fleet utilization levels in fiscal 2019, the BS-VI standards resulted in a 10-15% increase in the prices of new trucks in fiscal year 2019. during fiscal year 20. And then came the COVID-19 pandemic and the sharp economic contraction.

In the third quarter of FY21, freight rates for cement steel carriers and autos had improved significantly. The first two segments benefited from infra push.

Freight rates for the transport of industrial goods such as cement have been relatively strong, as has the movement of consumer goods and agricultural products. But, those for textiles, especially ready-mades, are struggling as demand could take a few more months to return to pre-pandemic levels, according to the report based on 32 different routes and 11 different product types.

In the first quarter of FY21, fleet utilization rates plunged with most consumption and demand centers stranded, and a sequential recovery was visible with a gradual reopening of the economy over the course of for the next three quarters.

Amid all this, the recovery in freight demand has been sporadic across all segments, with FMCGs recovering faster than discretionary products such as ready-made clothing / textiles and other consumer goods. sustainable. Additionally, even within states, recovery varied based on pandemic workload and unlock levels.

The agency has been tracking freight rates and operator cash flows on 32 key routes every two months since October 2020 and will now provide the data signals on a monthly basis.

Over the past two years, many operators of large fleets (over 35 tonnes GVWR) have moved away from bulk products to focus on lighter items.

Again, the industry is showing signs of improvement in freight index and free cash flow availability on all road-product combinations despite rising diesel prices as freight rates have increased. relatively more than the soaring fuel prices from June to October.

Despite the improvement in the index in October to 122 (similar to February 2021 levels), rates continue to be at a level (17%) comparable to October 2020, according to the report.