A truck driver ferrying cars from manufacturing plants to various parts of the country, is enjoying his extended stay in the outskirts of Chennai as many companies, including automobile manufacturers, have temporarily stopped delivery till the GST rates take effect on September 22.
With lakhs of trucks idle for the last one week, the freight rate has plummeted by 30-35 per cent due to lack of demand.
However, the rates will not only bounce back strongly post September 22 but there will be a huge shortage of vehicles with too much demand for movement of goods. The current demand is only from ecommerce portals, industry sources said.
Drivers are enjoying advanced holidays, he said. However, it is going to be a different scenario post September 22 and there will be hardly any time to take rest, he added.
The Director of the Delhi-based Chetak Group, and a large fleet operator moving automobiles across the country, said government decision to reduce GST is good for consumers but it halts the entire supply chain from part suppliers to last mile delivered due to halt in buying.
Almost 90 per cent trucks are idle and waiting for load as OEMs have said no loads till September 22. Only few dispatches for marriages or other important functions are happening, he said.
However, post September 22, there will be a mad rush to push the vehicles to ensure that customers take delivery during Navaratri. Freight rate will increase by 30-40 per cent as the Diwali festival is coming. Right now volume is down by nearly 30 per cent due to poor despatch by manufacturers, he said.
The Managing Director of the Tiruchi-based Subham Freight Carriers India Private Ltd, a large fleet operator, said there is a huge lull in the market as there is no movement in sectors like white goods and automobiles. Trucks are waiting idle across the country, he said.
The Mumbai-based freight rate has dropped by 30-35 per cent per cent due to poor cargo volume. However, post September 22, the freight rates will shoot up significantly due to huge demand for trucks. This is only a temporary phenomenon due to the revision in the GST rates, he added.
An official with an automobile dealer said billings for new vehicles will start happening as per the new GST rates, even if someone books today. No delivery is being planned for this week, he said.
According to Chief of Operations at Blue Dart, the current slowdown in vehicle utilisation is only a temporary outcome of the GST reforms.
From September 22, as the revised rates take effect and festive sales commence across major e-commerce platforms, we anticipate a sharp rebound in demand. The twin impact will not only boost shipment volumes but also trigger heightened requirements for trucks, commercial vehicles, and allied logistics resources.
