
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 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:
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 Item | Fair 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
2. Drivers
3. Shippers/Customers