AIMTC Pushes for Minimum Freight Rates
December 04,2024

AIMTC Pushes for Minimum Freight Rates: A Step Towards Stabilizing India’s Trucking Industry

The All India Motor Transport Congress (AIMTC) has proposed implementing minimum freight rates for commercial vehicles across India. This initiative aims to tackle critical challenges in the transportation industry caused by aggressive price-cutting and unhealthy competition. By introducing standardized freight rates, AIMTC hopes to create a sustainable and equitable environment for transporters, drivers, and customers.

The Problem: Unhealthy Competition

Currently, the absence of regulated freight rates forces transporters to compete by undercutting prices. This practice often leads to unsustainable rates, leaving truck owners and operators with razor-thin margins or even losses.

Example

For a 32-feet multi-axle truck trip from Chennai to Bangalore:

The ideal rate is ₹28,000.
Aggressive competition forces transporters to offer ₹24,000, putting significant financial strain on transporters.

The impact is far-reaching, with reduced vehicle maintenance, compromised driver wages, and a gradual deterioration of service quality.

AIMTC’s Proposal: Fair Pricing for All

AIMTC has proposed that the government establish minimum freight rates, akin to regulated fare systems for auto rickshaws and buses. This move would ensure:

A fair market environment.
Sustainable profitability for transporters.
Quality services for shippers and customers.

By discouraging exploitative pricing practices, the proposal could pave the way for a healthier and more stable logistics industry.

Comparison of Fair vs. Unfair Pricing

The following table illustrates the differences in cost structures between fair and unfair pricing for a round trip from Chennai to Bangalore using a 32-feet multi-axle truck:

Cost ItemFair Price (₹56,000)Unfair Price (₹48,000)
Diesel Cost (178L * ₹93)₹16,600₹16,600
Toll Cost₹5,000₹5,000
Driver Salary (15%)₹8,500₹7,000
Miscellaneous Costs₹3,000₹3,000
Total Operating Cost₹33,100₹31,600
Revenue₹56,000₹48,000
Profit₹22,900₹16,400

Stakeholder Impact

1. Transporters/Truck Owners

Benefit: Minimum freight rates ensure consistent profitability, enabling better vehicle maintenance and business expansion.

2. Drivers

Benefit: With fair earnings, transporters can offer improved salaries and working conditions to drivers, boosting morale and retention.

3. Shippers/Customers

Impact: While shippers may face a marginal increase in costs, they will benefit from better truck availability, reliable delivery timelines, and reduced negotiations.

Leave A Comment

About Author

Sed ut perspiciatis unde omnis iste natus err sit voluptatem accusantium dolore mo uelau dantium totam rem aperiam eaque ipsa quae ab illo inven.

Streamline your logistics operations with Delipack Express, the ultimate solution for efficient warehouse and logistics services.

Contact Info
Office Address
Select the fields to be shown. Others will be hidden. Drag and drop to rearrange the order.
  • Image
  • SKU
  • Rating
  • Price
  • Stock
  • Availability
  • Add to cart
  • Description
  • Content
  • Weight
  • Dimensions
  • Additional information
Click outside to hide the comparison bar
Compare

Get Best Rate for Your Freight Transport

Speak to a Delipack representative to learn the best solution for your business today!
Delipack Express