Freight rates in May fall but transporters defer fleet expansion plans

Customers pay less after six months for but transport companies feel the pinch of inflation.

Freight rates on key routes in May fell for the first time in six months, as transporters pass on the benefit of reduced fuel prices to customers. The cheaper rates came on the back of the government cutting excise duty on diesel and petrol, according to Crisil’s freight Index (CRISFrex).

However, inflation influenced consumer spending across segments to dent freight volumes and transpoters' earnings. It also made transporters defer on buying new trucks.

Truck rentals on key routes dropped by 5-6 per cent, said Indian Foundation of Transport Research & Training (IFTRT) in a note on Wednesday.

“The fleet utilisation during the month