Fleet utilisation flat; freight rates slip in February: CRISIL

Fleet utilisation levels were flat on-month in February 2022, as improving utilisation of bulk commodities such as steel, and auto carriers and petroleum tankers was negated by 100 lower utilisation levels for agri products, and in mining 95 activities and cement transportation. This impacted freight 90 rates, which dipped marginally, despite flat diesel prices, said a CRISIL research report.

“CRISFrex declined slightly on-month, with free cash flow (pre-equated monthly instalment) mirroring the trajectory. Flat utilisation levels exerted pressure on freight rates, constraining transporters’ ability to generate higher cash flow,” a media release by CRISIL said.

Aggregated decrease in freight rates was ~1% on-month, with slight decrease in rates on most routes. On 5-7% of the routes, though, there was no change in freight rates.


According to the report, Freight rates edged slightly lower in February 2022, largely because of relatively unchanged fuel prices over the past three months and flat utilisation levels.

“The flat utilisation level on-month was because improving utilisation of steel transporters and auto carriers was negated by flat agri product utilisation and fall in cement freight utilisation. Cement transport utilisation dropped because of sluggish construction activity,” said CRISIL.

It added, “Dispatches for consumer goods were flat on-month, slightly impacted by subdued consumption, especially in rural areas. This translated into the CRISFrex Index slipping marginally on-month in February 2022, to 119, from 120 in January 2022.”

“Flat utilisation levels and diesel prices, and marginal dip in freight rates resulted in the industry’s margins shrinking to ~20% from ~21% in the previous month.

Given the current geo-political situation, it is imperative to observe fleet utilisation, freight rates as well as diesel prices over the next 1-2 months as market dynamics could change rapidly. Export-import could be impacted because of supply chain disruptions and trade issue,” said Crisil.