Truck Rental Rates Fall Due to Oversupply and Low Demand

Key Highlights:

• Truck rentals fell due to the oversupply of heavy trucks and reduced e-commerce demand.
• Manufacturing dispatches by MSMEs dropped 10–12% in May, lowering goods movement.
• Around 5–6 lakh trucks returned to regular routes after crop transport, adding to the vehicle surplus.
• Fuel, lubricant, and tire prices stayed high despite low crude oil prices, increasing operating costs.
• Truck sales remained weak in May, and the expected pre-buying before the AC cabin rule didn’t happen.

Truck rental prices have dropped recently. This happened mainly because there are too many heavy-duty trucks available and not enough demand, especially from e-commerce companies that usually use medium-sized covered trucks. This data was reported by the Indian Foundation of Transport Research and Training (IFTRT).

Fewer Shipments from Small Manufacturers

Micro, small, and medium enterprises (MSMEs) sent out 10-12% fewer goods in May from industrial areas. This lower dispatch also affected the demand for transport.

Transport Trucks Return to Regular Routes

Between March 15 and May 15, many trucks were used to carry wheat and pulses. Once the crop transport ended, around 5 to 6 lakh heavy trucks, especially 28-tonne three-axle ones, returned to their usual long-distance work. This added more trucks to the market and pushed rental rates down further.

Northeast Transport Hit by Rain, But Farm Goods Helped

The Northeast region faced heavy rain, which disturbed regular transport. However, the movement of fruits and vegetables from farms increased by 10-15% due to a good summer harvest. This helped reduce the impact of the rental drop.

Fuel and Maintenance Costs Still High

Even though Brent crude oil prices are low at $63 per barrel, diesel, oil, and tyre prices haven’t come down. This is because a few companies control the oil and tyre markets, not allowing transporters to benefit from cheaper crude oil.

Slow Sales of Consumer Goods in Summer

Sales of consumer items also remained low despite earlier expectations that the heatwave would boost demand. Many shops in cities are left with unsold products. In villages, people spent more money on building homes rather than buying goods, helped by better crop yields and more income.

Finance Pressure on Fleet Owners

Some large transport companies are struggling to repay loans. Many of them bought extra trucks earlier to take advantage of GST tax benefits. But now, they aren’t getting enough work. Although most payment delays are just one or two instalments, lenders are now more careful about giving new loans.

Truck Sales Stay Weak in May

Truck dealers said that sales were low to average in the second half of May. Many expected more people to buy trucks before a new rule from June 8, which will make air-conditioned cabins compulsory and increase truck prices by ₹35,000–50,000. But this rush to buy trucks did not happen. Even though India’s GDP growth is at 6.5% and the focus is on the domestic market, trade between states and within states is still slow. Cautious consumer spending is one of the main reasons behind this.

Also Read: Tata Motors Registered 28,147 Commercial Vehicle Sales in May 2025

CMV360 Says

The decline in truck rentals and weak truck sales shows that the transport and logistics sector is under pressure. With high running costs, reduced demand, and loan repayment issues, fleet operators are finding it hard to stay profitable. A stable policy environment and better fuel price management could help the industry recover faster.