Reduction in carrying capacity hikes shipping cost
Industry body Assocham on Wednesday said reduction in carrying capacity of vehicles, and not hike in fuel prices, has led to the sharp hike in transportation cost.
By PTI |
NEW DELHI: Industry body Assocham on Wednesday said reduction in carrying capacity of vehicles, and not hike in fuel prices, has led to the sharp hike in transportation cost.
In an analysis on 'Inflation Due to Fuel Price Increases or Inflation Due to Down rating of Goods Carrying Capacity of Vehicles', the industry body said a ruling by the Supreme Court has led to 30 to 40 per cent reduction in carrying capacities of vehicles.
The apex court had mandated that the Gross Vehicle Weight (GVW) of commercial vehicles as registered should be implemented. The concession granted to transport operators by different state governments on relaxation of GVW is not right according to the law, Assocham said in a statement.
After this ruling came into effect, TATA 2515, for instance, which would earlier move 20 tons of weight of essential products, could now carry only 12 to 13 tons (a reduction of 35-40 per cent). The resultant increase in freight cost works out to as high as 67 per cent.
"The shortage of transport vehicles resulting from one change (reduced carrying capacity) has led to 25-30 per cent increase in freight cost. Therefore, the total increase in freight cost due to the reduced carrying capacity of vehicles is nearly 100 per cent.
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The diesel price increase in the last few months averages 7 per cent and would have an impact of 3 to 4 per cent in freight cost," Assocham President Anil Agarwal said.The ruling should be reviewed in the interest of the common man as the impact of rising prices of grains, pulses and essential commodities on account of higher transportation costs is becoming severely unbearable, the chamber said.
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