Sector Update |
Update | Logistics
7 October 2021
Sector
India Logistics
Technology
L
ogistics
T
racker
Logistics activity remains strong in Sep’21; higher volumes see
freight rates improve
E-way bill generation continues to be strong for the fourth consecutive month (+3%
MoM in Sep’21), indicating sustained improvement in road freight operations post the
lifting of COVID-related restrictions.
Freight rates have been rising for the last few months and improved further by ~5%
MoM for key routes in Sep’21. This was driven by a sharp pickup in volumes in the last
couple of months, led by the economic unlock. The increase in rates was despite no
major change in diesel prices during the month. Capacity utilization for trucks currently
stands at ~80% levels.
Volumes handled at major ports came in strong at 54mmt (flat YoY), driven by growth
in container traffic and petroleum, oil, and lubricants (P.O.L). Growth was negatively
impacted by the severe container shortage and elevated sea freight rates.
Robust e-way bill generations in Sep’21 indicate strong volume pickup and
improved truck operations
Key Indicators and YoY growth (%)
Sep’21
E-way Bills (in m)
Rail Traffic
(m tonnes)
Port Volumes
(m tonnes)
Diesel
consumption
(m tonnes)
67.9
106
53.8
YoY(%)
18.3
3.6
0.4
In Sep’21, e-way bill generations grew 3% MoM to ~68m v/s 66m generations
reported in Aug’21. E-way bill generations have been growing for the last four
months, indicating the sustained improvement in truck operations post the easing of
COVID-related restrictions. Overall e-way bill generations grew 18% YoY. Inter-state
grew 22% YoY, while intra-state grew 16% YoY in Sep’21.
The Indian Railways reported 4% YoY growth in EXIM container volumes, lower than
the overall growth in container volumes handled at ports. The Railways’ market
5.5
1.0
share in EXIM containers stood at ~33% in Sep’21 (~35% in Sep’20). Domestic
Source: GSTN, Indian Railways, IPA,
container volumes handled by the Indian Railways grew 36% YoY in Sept’21.
PPAC, MOFSL
EXIM container volumes by Railways up ~4% YoY in Sep’21
Traffic handled at major ports remains flat YoY in Sep’21, after 11% YoY
growth in Aug’21
Relaxations in lockdown rules after the second COVID wave led to a pickup in
industrial activity. This drove volume growth to 11% YoY in Aug’21 (7% YoY in
Jul’21). Volumes came in flat YoY in Sep’21. Container/P.O.L showed growth of
11%/10% YoY in Sep’21, followed by Coal (+5%) and Fertilizer (+5%). This was offset
by sharp decline in Iron Ore / Other Cargo by -60% /-1%. Volumes de-grew 7% v/s
August. Among the major ports, Ennore reported a sharp jump of 83% YoY, followed
by Cochin (+25%), New Mangalore (+17%), JNPT (+12%), Mormugao (+9%). On the
other hand, Paradip and Vizag reported decline of 22% and 18% YoY, respectively.
Container cargo (TEU basis) grew 12% YoY in Sep’21.
Freight rates up 4–5% in Sep’21; fourth consecutive month of increase
The recent increase is driven by a) wholesalers piling up inventory in the wake of the
festival season and b) the brisk arrival of fruits and vegetables in agricultural
produce market committees (APMCs). Truck utilization stood healthy at 80% levels
during the month. June–September saw cumulative rental price increases of 25–
30% as per IFTRT on select routes. The rental increase in September was despite no
major change in diesel prices (except INR1/ltr change towards the end of the
month).
Alok Deora – Research analyst
(Alok.Deora@Motilaloswal.com)
Research analyst: Dhirendra Patro
(Dhirendra.Patro@motilaloswal.com)
7 October 2021
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P
1
Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.