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Activity steady in Apr’22…

…demand stable; freight rates rise further

* Logistics activity was weak in first half of Apr’22 but picked up well during the second half with broad based pick-up in demand. Daily average e-way bill generations were up 28% YoY and 6% MoM in Apr’22. The fleet utilization levels stood at 80-85%.

* With strong demand pick-up in the second half, logistics operators were able to take price hikes in the range of 4-5% that offset the sharp rise in diesel prices over Mar-Apr’22.

* Volumes handled at major ports rose 6% YoY to 65mmt. Fertilizer/Petroleum, Oil, Lubricants (P.O.L) /Other Cargo reported growth of 14%/12%/16% YoY, respectively, in Apr’22, which was offset by a sharp decline in the Iron Ore segment by 17% YoY. Growth was impaired by the container shortage and elevated sea freight rates.

Daily average e-way bill generations rise 28% YoY (flat MoM); daily average toll collections increase 6% MoM in Apr’22

Daily average e-way bill generations remained flat MoM and clocked ~2.5m/day in Apr’22. E-way bill generations have been on a rise since the last few months (excluding Nov’21), indicating the sustained improvement in truck operations due to the pick-up in economic activities. Daily e-way bill generations rose 28% YoY with intra-state bill generations increasing 28% YoY and inter-state growing 27% YoY in Apr’22. The improvement in MoM activity is also reflected in the daily average FASTag toll collection numbers, which grew 6% MoM and reported INR1.4b/day in Apr’22

Rail EXIM container volumes up 7% YoY in Apr’22

While the overall container volumes handled at ports remained flat YoY, EXIM container volumes handled by Indian Railways increased 7% YoY in Apr’22. The Railways’ market share in EXIM containers stood at ~33% in Apr’22 (v/s ~31% in Apr’21). Domestic container volumes handled by Railways rose 26% YoY in Apr’22.

Traffic handled at major ports increases 6% YoY in Apr’22

After remaining flat YoY in Mar’22, traffic handled at major ports rose 6% YoY in Apr’22. Fertilizer/P.O.L./Other Cargo posted growth of 14%/12%/16% YoY, respectively, in Apr’22, which was offset by a sharp decline in the Iron Ore segment by 17% YoY. Among the major ports, Ennore and Mumbai reported growth of 16% YoY, followed by New Mangalore (+15%), Vizag (+13%) and Deendayal (+12%). Conversely, Mormugao, V.O. Chidambaranar and Kolkata reported declines of 22%, 14% and 13% YoY, respectively. Container cargo remained flat YoY in Apr’22, on a TEU basis.

Freight rates increase 4-5% MoM as retail diesel prices continue to rise

The diesel prices at retail outlets have been on the rise owing to sharp increase in the Global crude prices. With strong volumes in the second half of Apr’22, fleet operators managed to undertake a freight price hike of 4-5%, which was sufficient to cover the rise in costs. The next couple of months would be crucial to watch if transporters are able to pass on any further increase in diesel prices. VRL Logistics continues to remain our top pick in the Indian Logistics space.

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