Emerging technologies can offset rising costs in transportation: ICRA

New technologies such as Big Data, telematics systems, and alternate fuel technology can help drive efficiencies in the transportation sector by optimising routes for efficient delivery sequence, maximise asset utilisation, and improve fuel efficiency. According to Shamsher Dewan, Vice President & Sector Head – Corporate Ratings, ICRA, the profit margins of fleet operators are highly volatile as compared to agents and third-party logistics companies. “The profitability margins of fleet operators are especially sensitive to fluctuations in diesel prices and frequent increase in vehicle ownership cost, toll charges, and other overheads. The sharp increase in diesel prices in Q2 and Q3 FY2019 had a significant impact on profitability indicators of fleet operators as freight rates didn’t move in a similar fashion owing to overall surplus capacity in the trucking system. In such an environment, gradual adoption of new technologies can help fleet operators improve their cost structure and bring down some of the fixed costs.”