Transporters are raising freight rates to pass on the fuel price hike, but with inflation looming, operational efficiencies need to kick in, officials said on Thursday.The government raised petrol and diesel prices the second time this year by about 10 percent to curb losses at its state-run refiners. The move sent the BSE benchmark index to its lowest close in two months on accelerated inflation concerns.
Crude oil prices have risen over 30 percent this year to break a crucial $130-a-barrel level two weeks ago, bumping up Asian jet-fuel prices by more than half."Fuel constitutes 50-60 percent of the total cost, therefore, this time it will be difficult for logistics companies to absorb the hike," Vineet Agarwal, executive director of Transport Corp of India Ltd, said.
Transport Corp will raise freight costs by 3-4 percent immediately due to the lean season for the business, but will eventually raise rates by 5 percent, Agarwal said."As 70-75 percent of our customers operate on a contractual basis, the hike will be passed on to them immediately."
"The freight rate will go up like anything because of the increase. It will impact every commodity," said S.M. Jalan, managing director of trucking and warehousing services firm, TCI Hi-Ways.Elbee Express, movers of high value goods by road and air, has also raised prices by an average 35-40 percent, said Nikhil Shah, executive director.
Blue Dart Express, Gati and DTDC Courier & Cargo, in which Reliance Capital owns about 40 percent, also operate in the express delivery space."We are improving efficiencies and trying to drive down our dependency on fuel through route management and fuel efficient vehicles," Elbee’s Shah, said.
Container transporters are trying to decrease their dependency on road transport and move cargo via trains and coastal shipping.
"Trucking will be used as the last mile connectivity," Sudhir Rangnekar, managing director of Sical Logistics, said.
"This will give a fillip to other transportation means."
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