Heat Wave Takes Toll on Truck Rentals and Fleet Occupancy Levels in May: Shriram Mobility Bulletin

• Heat wave across India took a toll on fleet occupancy levels, which dropped to around 60% as drivers and loaders stayed away from their work during daytime.

• Tractor sales rise sharply in May as India prepares for a good monsoon.

• Fuel consumption and Fastag collections rose in May as holiday travelers and election campaigners hit the road.

• Export-import activity at the major ports in India saw an increase in May.

• Summer consumer goods like air conditioners, coolers, refrigerators and summer fruits kept the trucks rolling. Public infra activity dipped.

The June 2024 edition of Shriram Mobility Bulletin, released today includes interesting data about the latest state of the automobile and logistics sector. The bulletin compiles sales and rental figures for May 2024 and compares them to relevant figures from relevant periods to provide a complete picture.

The intense summer heat exerted its influence on fleet occupancy rates, which dropped to almost 60% as loaders and drivers decided to avoid working during the day in different parts of India. High summer temperatures, along with fewer public infrastructure projects, caused a drop in truck rental rates along the major routes. A significant downturn in rental rates was observed in the routes spanning Delhi-Kolkata-Delhi, Delhi-Chennai-Delhi and Mumbai- Kolkata-Mumbai.

But as India gets ready for what is expected to be an ample monsoon season, tractor sales significantly increased in May. Sales of agricultural tractors increased by a significant 24% in May 2024, indicating strong demand attributable to pre-monsoon buying. Meanwhile, sales of commercial tractors increased by 20% in the same time frame, exhibiting strong month-over- month growth.

Fuel sales and FASTag collections also saw a substantial rise in May 2024 due to the rush of vacationers and election campaigners hitting the road. There was a notable 6% increase in toll revenues from month to month, which suggests that there are more cars on the highways. The amount of fuel consumed surged by 5% month over month to 3.45 million tons, the highest level since May 2023.

This increase can be attributed to the heightened presence of wheels on the road due to election campaigns and people venturing out during the holiday season. Similarly, diesel consumption also witnessed a substantial uptick, rising by 6% month-over-month to 8.39 million tonnes.

The infra-activities saw a dip in that period. However, the demand for summer essentials like air conditioners, coolers, refrigerators, and the plentiful array of seasonal fruits kept transportation trucks active.

There was a significant increase in bulk cargo volume at major ports, rising by 7% compared to the previous month and 6% compared to the same period last year, totaling 71.9 million tonnes. The Kolkata Dock System handled the least amount of bulk cargo, while Kandlas Deendayal Port handled the most. Containerized cargo also saw growth, reaching 1081 TEUs (in thousand nos.) with a 5% month-over-month and year-over-year increase. This increase in the volume of container freight indicates a rebound, particularly in light of the 6% decrease in April, which suggested a strengthening trend in trade activity.

“The oppressive summer heat reduced fleet occupancy to 60%, but the promise of a good monsoon boosted tractor sales in May. Holiday travelers and election campaigners, along with increased export-import activities, drove up fuel consumption and FASTag collections. Despite a dip in public infra-activity, the demand for summer goods kept our trucks rolling, showcasing the indomitable spirit of our logistics network,” said YS Chakravarti, MD & CEO of Shriram Finance Ltd.

Shriram Mobility Bulletin is an initiative by Shriram Finance Ltd to provide stakeholders with a picture of India’s economy. Monthly, the company compiles statistical data about the logistics and automobile sector through its nationwide network of fleet owners & vehicle dealers. The data is analysed to unearth interesting & vital trends.

About Shriram Finance

Shriram Finance Limited is the flagship company of the Shriram group which has significant presence in Consumer Finance, Life Insurance, General Insurance, Housing Finance, Stock Broking and Distribution businesses. Shriram Finance Limited is one of India’s largest retail asset financing Non-Banking Finance Companies (NBFC) with Assets under Management (AUM) above Rs. 2.24 trillion. Established in 1979, Shriram Finance is a holistic finance provider catering to the needs of Small Road Transport Operators and small business owners and is a leader in organised financing of pre-owned commercial vehicles and two wheelers. It has vertically integrated business model and offers financing number of products which include passenger commercial vehicles, loans to micro and small and medium enterprises (MSMEs), tractors & farm equipment, gold, personal loans and working capital loans etc. Over last 45 years, it has developed strong competencies in the areas of loan origination, valuation of pre-owned commercial vehicles and other assets, and collections. It has a pan India presence with network of 3,082 branches and an employee strength of 74,645 servicing to 83.97 lakhs of customers.