Freight Charges Likely to Drop if OEMs Extend Cost Benefits

Leaders in the road transport and logistics sector have indicated that any cost benefits extended by Original Equipment Manufacturers (OEMs) could lead to a visible reduction in freight rates across the industry.

According to Rajesh Singal, a senior representative of a leading transporters’ association, the road logistics market operates on razor-thin margins and high competition. “The sector is so competitive that whenever there’s a benefit — whether it’s in input costs, vehicle prices, or operating efficiencies — it gets passed on almost immediately to customers,” said Singal.

Industry participants noted that factors such as declining vehicle acquisition costs, lower fuel prices, or maintenance incentives from OEMs can have a cascading impact on overall freight charges. This, in turn, could enhance logistics affordability for businesses and stimulate greater freight movement across key routes.

However, experts also cautioned that the extent of cost transmission would depend on sustained reductions from OEMs and stable fuel prices. Short-term fluctuations or one-time rebates may not result in significant long-term freight adjustments.

“Freight rates are highly sensitive to market dynamics,” said another senior transporter. “But when OEMs extend consistent cost benefits — for instance, on spare parts or vehicle maintenance packages — the impact is quickly visible across the chain.”

With road transport handling nearly 65% of India’s freight volume, a reduction in operating costs could deliver significant relief to industries dependent on road logistics, particularly in sectors like FMCG, retail, and manufacturing.