Fleet utilisation flat, freight rates up

In March, fleet utilisation trended at the level seen the month before, with improving utilisation of cement and mining products (largely coal) negated by lower utlisation levels of loose goods and textiles. For bulk commodities such as steel, auto-carriers and petroleum tankers, utilisation was flat on-month.

Freight rates, though, edged up on higher diesel prices.

From here, an increase in diesel price by Rs 5 per litre would push up freight rates by 2-3%.

Considering the government’s investment plans and borrowing plan for the first half of the year, the increase in diesel price could be passed on to sectors such as steel and cement.

Consumption sectors such as fast moving consumer goods/durables (FMCG/FMCD) and textiles, however, would find it difficult to pass on the incremental cost to end-consumers.