Freight Rates Raised By 4% As Transporters Face Higher Operating Costs

India’s transport and logistics sector has started raising freight charges by around 4% as transporters attempt to offset mounting operational costs triggered by the recent increase in diesel prices and other input expenses. Industry bodies said the revision has become necessary as operators are struggling with shrinking margins amid higher fuel, tyre, toll and maintenance costs.

The latest round of freight hikes follows the recent increase in petrol and diesel prices by state-run oil marketing companies. Diesel prices were raised by nearly ₹3 per litre across major cities earlier this month after a rise in global crude oil prices linked to geopolitical tensions in West Asia. In Delhi, diesel prices climbed to around ₹90.67 per litre, while rates in Mumbai and Kolkata crossed ₹93 per litre and ₹95 per litre, respectively.

Rising Input Costs Add Pressure On Fleet Operators

Transport associations said the impact of the fuel price increase has been amplified by higher costs of tyres, lubricants, diesel exhaust fluid (DEF), toll charges and spare parts. According to industry estimates, tyre prices alone have increased by nearly ₹1,000 per unit in the past month. The All India Transporters Welfare Association (AITWA) had earlier indicated that freight rates could rise by 3-3.5% depending on route, vehicle type and operating profile. However, several transporters across industrial corridors have now begun implementing hikes closer to 4% to fully pass on the additional burden to customers.

Logistics operators warned that the increase could have a cascading effect on prices of consumer goods, FMCG products, agricultural produce and industrial raw materials, as transportation remains a critical component of supply chains. Experts believe sectors dependent on road transportation, including e-commerce and quick-commerce firms, may witness higher last-mile delivery costs in the coming weeks.

In some regions, the pressure has been even more severe. Transporters operating around Gujarat’s Kandla and Mundra ports recently announced a 20% hike in freight rates due to bulk diesel shortages and sharply higher industrial fuel prices.

Industry executives said freight demand has remained uneven in recent months due to slower cargo movement and softer business activity in several states. Transporters in Madhya Pradesh recently claimed that nearly 25-30% of commercial vehicles were lying idle because of weak demand conditions.

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Indian Stocks Likely To Be Impacted

The rise in freight rates is likely to impact logistics, transportation and consumption-focused companies. Listed firms that may remain in focus include Delhivery, Transport Corporation of India, Blue Dart Express and VRL Logistics due to higher operating costs and possible freight revisions.

Consumption-oriented companies such as Hindustan Unilever, ITC, and Dabur India may also face margin pressure if logistics expenses continue to rise.

Sources:

Business Standard

Economic Times

The Times of India