Truckers raise freight rate by 8% on fuel price hike

Transporters across the country have raised truck rentals by 8% after the government hiked fuel prices on July 1. The government has hiked diesel prices by Rs 2 per litre and petrol by Rs 4.

The impact will consequently be felt by the retail fraternity, including branded retail majors and mandis of fresh fruits and vegetables as well as other products that are transported by road.

Kumar Rajagopalan, chief executive officer of Retailers Association of India (RAI), told FE, "Now that truckers have raised rates by nearly 8%, prices of perishable fruits and vegetables are likely to shoot up and front end of retailers will get impacted. Amidst the scenario, retailers should try their level best to absorb the prices and not pass on the burden to customers. Moreover, retail sector will also get impacted due to combination of various other factors which will be felt soon after the Union Budget is announced on July 6, 2009."

Currently, there are retail majors who directly source perishables fruits and vegetables from mandis. Rajan Malhotra, chief executive officer, Big Bazaar, said, "We source fruits and vegetables directly from the mandis. If the mandis hike prices, then everybody will get impacted. Even we may have to hike prices. But all will also depend on the announcement on the Union Budget."

According to Ramesh Agarwal, president, All India Transporters' Welfare Association (AITWA), "Our costs have gone up by 7.6% because of the petrol and diesel price hike. So, transporters have raised rents by 8%."

However, All India Motor Transport Society secretary Gurinder Pal Singh said the hike in freight rates would be in the region of 3 to 5% and come into force from next week. Transporters would raise the freight rates in the region of 3 to 5% in the coming week. According to Transport Corporation of India (TCI), which has one of the largest fleets of trucks in the country, the hike in rentals would be between 3 to 7%.

The transporters have gone on strike twice in the last one year protesting high diesel prices, among other issues.