Transportation plays a key role in steel Industries for outstation sales. Due to demonetization Indian transport Industry is facing cash crisis. Which in turn resulted in hike in freight charges by INR 500-700/MT.
“Due to cash crisis, the transporters have raised their freight charges specially for long distances as there payment and billing cycle disturbed” said East based manufacturer.
Another manufacturer added “Lot of fleet owners have withdrew their vehicle from logistic company due to cash crunch & awaiting situation to normalize.”
Trade participants also added that, because of sharp increase in freight charges they have to struggle for vehicles for immediate loading.
Freight Charges via Road During Nov-Dec’16
| Dec’16 | |||
| From | Gobindgarh | Mumbai | Jalna |
| Raipur | 2,700 | 2,200-2,400 | 1,700 |
| Durgapur | 2,600-2,700 | – | |
| Rourkela | 3,100-3,300 | 2,500 | 2,000 |
| Bellary | – | 1,400-1,500 | 1,200-1,300 |
| Nov’16 | |||
| From | Gobindgarh | Mumbai | Jalna |
| Raipur | 2,300-2,400 | 1,800-1,900 | 1,050 |
| Durgapur | 2,300-2,400 | – | – |
| Rourkela | 2,800-2,900 | 2,000-2,100 | 1,600-1,700 |
| Bellary | – | 1,200 | 1,000 |
Charges for per metric ton (MT)
Source: SteelMint Research
Semis traders in northern India reported that they are receiving material at higher prices due to gain in freight charges by INR 500-600 MT. Northern India are majorly purchase billets from Central & East regions.
Similar comments received by Western region based smelters as their input cost has gone high. Central, East & South (Raipur, Rourkela & Bellary) supply more quantity of sponge iron to Western region (Maharashtra, Gujarat & Rajasthan).
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