Relief for road transporters as capacity utilisation rises

Mumbai: Capacity utilisation for road transporters in August has improved to more than 60%, as economic activity gathered pace and commercial vehicle traffic on highways reached 80-90% of the pre-Covid times.

Transportation of goods such as agricultural produce, FMCG, pharmaceuticals, iron ore and ecommerce consignments aided the upwards trend. Demand to carry automobile components, two-wheelers, cement and steel is also gradually improving.

Capacity utilisation for road transport companies has been improving month-on-month since falling to around 30% in May, but there is still a long way to go to reach normalcy, transporters said.

“The situation is slowly improving. Right now, there is about 60% capacity utilisation across the country and it could go up to 80% during Diwali,” Chetak Logistics director Sachin Haritash said.

The demand recovery was not evenly distributed across the industry. Operators who own 1-10 vehicles are worse off than their larger, organised counterparts. Small operators are generally attached to larger transporters and rely on them for receiving consignments.

“In a scenario where demand is subdued, large fleet operators are prioritising own fleet utilisation over small fleet operators,” Crisil Research director Ajay Srinivasan said.

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