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January 03, 2022

FreightSigns

What is the goods traffic, and the free cash flow of fleet operators, telling us?

Drive-up in December as industrial goods movement accelerates

 

Mining, steel and cement freight rates saw a healthy on-month increase in December as construction activity resumed. The extended south-west monsoon rains had affected the rates in November.

 

Decadal capex cycle

The rise seems to be driven by industrial activity as almost on all routes, steel, mining and auto freight saw a sequential rise. On the other hand, freight rates for fastmoving consumer goods (FMCG)/fast-moving consumer durables (FMCD), parcel/loose goods saw a sequential drop in a few routes as consumer spending tapered after the festive season

Decadal capex cycle

A first-of-its-kind index in India, CRISFrex not only captures the changes in freight rates on a sequential basis, but also tracks the free cash flow, or FCF, (pre-EMI) of transporters on an ongoing basis. Typically, higher FCF improves demand for commercial vehicles.

Decadal capex cycle
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