Higher diesel prices will shave off the overall profitability of transporters despite an improvement in freight rates since last month following the withdrawal of the monsoons, consumption recovery and higher infrastructure activity, according to a report.
Rating agency Crisil in the report said that even at the new level since October, the freight rates are still below the levels seen in the closing quarter of the last fiscal even the freight rate recovery has been broad-based with most route commodity combinations seeing an increase in freight rates.
Last month, 80-85 per cent of the combinations saw an improvement in freight rates over August, while 15-20 per cent were unable to pass on the diesel price hikes due to demand-supply considerations, according the report released on Monday.
