SME slump threatens freight transport with falling rentals
Jul 09 2012, 14:48 | By CNBC-TV18
Rentals in the trucking industry during the first quarter of 2012-13 have been hit, especially on main routes between Delhi and Mumbai amongst other routes. This is a worrying trend since this is indicative of falling freight volumes and a consequent fall in demand for medium and heavy commercial vehicles, reports CNBC-TV18's Sunanda Jayaseelan.
The rentals on the main routes including Delhi-Mumbai-Delhi and Delhi-Kolkata-Delhi have come down by over 2% month-on-month after rising for 10 straight quarters . Prabhudas Lilladher, in a report submitted earlier on Friday, pointed out to the continued weakness in medium and heavy commercial vehicle segment.
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The Prabhudas Lilladher report also explains that the slowdown in freight volumes is caused by the slump in the SME sector which transports manufactured products via medium and heavy commercial vehicles.
The report concludes that the outlook for the sector is rather grim and adds that if volumes and prices do not correct over the next two-to-three months, growth for the next quarter and for FY13 is expected to be flat-to-negative.
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