Truck Rentals Fall 5–7% in May as Supply Outpaces Demand

Truck rentals fell by 5–7% in late May across key Indian routes. The cause: too many trucks, too little demand. This decline came after strong movement in March and April, according to the Indian Foundation of Transport Research and Training (IFTRT).

The main factor was the return of over 500,000 long-haul trucks. These trucks had moved wheat and pulses between March 15 and May 15. After finishing those tasks, they re-entered the regular freight network, mostly on long-distance routes. Their sudden presence pushed rental rates down.

Demand weakened at the same time. E-commerce firms pulled back orders for medium covered-body carriers. Small manufacturers, especially MSMEs, reduced dispatches by 10–12% across industrial hubs. This two-sided pressure—more supply, less demand—tilted the market.

The truck rental drop stems from an oversupply of long-haul heavy-duty trucks and reduced demand from e-commerce companies for intermediate covered body goods carriers; rain worsened the situation in the Northeast. Heavy showers hit transport links and delayed freight. But elsewhere, good harvests helped. Summer crops of fruits and vegetables moved fast from farms to markets. That flow rose 10–15% and gave some relief to falling rentals.

Fuel costs stayed high despite Brent crude trading at $63 per barrel; diesel and tire prices did not fall. Urban goods slowed too. Consumer durables did not sell well this summer. Heatwave predictions had raised hopes, but sales didn’t follow. Inventory piled up with city distributors. In rural zones, people spent more on home building; strong crop income made that possible.

Lenders grew cautious, some fleet operators struggled with loans, and many had bought trucks to claim GST input credit and tax benefits. But contracts shrank, vehicle use dropped, and defaults stayed low—often just one or two missed payments—but banks tightened credit checks.

Sales of new trucks stayed flat. A rule that mandates air-conditioned cabins will take effect on June 8. Prices will rise by ₹35,000–50,000. Dealers expected a buying rush that didn't come. Despite a 6.5% GDP growth target and a domestic focus, trade stayed soft, interstate and intrastate movement slowed, buyers held back, route pricing weakened, and freight margins fell.

The trucking industry in India is currently experiencing a period of uncertainty. Supply exceeds need while the costs remain stiff. Until demand steadies, pressure will persist on fleet operations, freight rates, and transport economics.

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