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We monitor monthly indicators to assess freight and cargo movement across the road, port, and rail networks. Dec-23 capped a strong quarter for road freight operators, as GST e-way bill generation was up 22% YoY (aided by reduction in threshold limit in Aug-23). Q3 rail volumes grew 6% YoY buoyed by bulk commodities such as cement and steel. ATF prices corrected 12% in Jan-24 from the Oct-23 highs which bodes well for Blue Dart Express. Recent disruptions in the Red Sea region have snowballed and impacted container movement between Asia and Europe, leading to a 2.5x increase in container shipping rates since Dec-23; this has resulted in muted major port and container volumes in Dec-23 (-1% and +2% MoM, respectively). Such disruption in global trade could cause a short-term, supply-demand mismatch of containers and impact railway logistics operators like Container Corporation of India (NR) and Gateway Distriparks (NR).

E-way bills recuperated in Dec-23 after a tepid November

Momentum in e-way bill generation resumed in Dec-23, up 9% MoM (3M rolling average of 1% MoM vs. -2% in Nov-23) after a tepid November, albeit at lower than Oct-23 numbers on account of strong festive-season demand. Inter-state e-way bill generation grew 11% YoY, while intra-state bills grew 14% YoY. On a quarterly basis, bills saw 17% YoY growth, owing to festive-season demand (the entire season captured in Q3 this year against being spread across Q2-Q3 in the last FY), affirming an improved H2 this year. Such trends bode well for PTL operators like VRL Logistics. Average freight rates on trunk routes (Delhi to Mumbai, Chennai and Kolkata) stayed flat sequentially, as diesel prices have remained unchanged since Jun-22. ATF prices further corrected 4% MoM leading to 12% correction since Oct-23 highs, and should aid margins of air logistics operators like Blue Dart Express.

Bulk commodities drive growth in rail cargo in Dec-23

Rail cargo grew 6%/8% YoY/MoM, respectively, in Dec-23 (139mn ton), buoyed by bulk commodities such as cement (21% MoM), pig iron & finished steel (14% MoM), other goods (14% MoM), foodgrains (12% MoM), iron ore (10% MoM), and coal (5% MoM), while container volumes grew 8% YoY/11% MoM. Raw material for steel plants has seen accelerated growth in Q3FY24 (over 27% YoY, ~3.2mn ton vs. the FY19-23 average of 2.4mn ton), indicating further upsurge in the capex cycle led by private capex kicking in.

Port and container volumes see disruption in Dec-23

Volume growth at major ports was -1% MoM in Dec-23 (70mn ton), with container volumes expanding to 14.9mn ton, thus increasing 2% MoM. Iron-ore and coal volumes grew 27% and 4% YoY, while fertilizer and other liquid volumes saw a dip of 25% and 17% YoY, respectively. Among major ports, Mormugao, New Mangalore, Haldia, and Kolkata registered growth of 21%, 13%, 13% and 5% YoY, respectively, while Chennai saw a dip of 7% YoY, with other ports seeing a minor movement on either side.

Red Sea attacks starting to create a big blip on the radar

Heightened frequency of attacks by the Houthi militia on the ships routing through the Red Sea have exacerbated the global trade movement with an estimated impact of up to USD30bn on Indian exports (link). This has led to container rates escalating more than 2.5x (WCI Shanghai – Rotterdam) from Dec-23. This disruption in global trade could lead to a short-term supply-demand mismatch of containers, and impact railway logistics operators like Container Corporation of India (NR) and Gateway Distriparks (NR).

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