Football fans will know that last summer Paris St-Germain signed the French World Cup star Kylian Mbappé on a season-long rental from Monaco, with the option to convert this short-term arrangement into a permanent fixed term “leasing” deal for €180m or £161m (source: BBC). Like Paris St-German, as a fleet manager, you don’t have to own all your trailer assets. Short-term rental or longer-term leasing or a mixture of the two will give you the best of both worlds when expanding your fleet.
Determining factors for ownership and/or rental/leasing
Given the high levels of capital involved, the decision to rent or lease trailers is a major one for fleet managers. Both options have their advantages. Many fleets mix the two and get the best of both worlds.
Lower total cost of ownership
Mike Spence, senior vice president of fleet services at Fleet Advantage, a lease finance company in the US presents interesting arguments for truck and trailer leasing in Foodlogistics.com that are equally valid for Europe. He notes that “fleet operators need to pay attention to the total cost of operating, not just the financial costs of owning versus leasing.” Buying a vehicle and depreciating its cost over eight years will require lower monthly payments than leasing. However, over that time, the total cost of ownership will be greater as the asset ages and needs more maintenance. “Shorter leases are beneficial to fleets since the newer the vehicle, the less the maintenance costs.”
Leasing or rental enables you to swap your trailers more frequently and for the latest models. Freightwavesreports that trailers last between 10 and 15 years. If you keep them for that long, you may miss out on new money-saving technology. Leasing or renting trailers can help you to future-proof your fleet so your business enjoys new trailers with the latest, most efficient technology.
For example, you might want to upgrade the telematics and security capacities with your new trailers. Alternatively, you could benefit from new smart trailer technology like Intelliscan. Intelliscan uses a proprietary combination of optical imaging and laser time of flight technologies embedded into trailers to deliver an accurate representation of the current loading in your trailer. The technology can then assist you in finding ways of maximising additional volumes of cargo to carry. (source: FreightWaves)
For trailer ownership to be profitable on a stand-alone basis, you need to own a workshop in which you employ and train skilled technicians to maintain and repair your trailers, backed up by an inventory of spare parts. Fleet operators who buy and build large fleets often do so to enjoy more control over their operations, benefit from economies of scale in terms of costs of ownership and are keep them going for longer. However, under a leasing or rental agreement, companies will supply maintenance and repair services. Leasing or rental frees up capital for fleet managers to use in the most profitable parts of their businesses
E-commerce is growing year on year, a trend that is reflected in data and forecasts. Researchers cited in a Shopify.com article predict a 246.15% rise in worldwide e-commerce sales, from $1.3 trillion in 2014 to $4.5 trillion in 2021. This is close to a threefold increase in online revenue. EE-commercecontinues to present fleet managers with exciting opportunities for new business. Having flexibility trailer capacity is a trump card for success in capturing a greater share of the ever-growing market for the delivery of e-commerce orders. The addition of trailers to a fleet through leasing or rental agreements is a sensible way of capitalising on this opportunity.
TIP leasing and rental
Trailer leasing and rental is our bread and butter, representing 65% of our turnover in 2017 (source: TIP Annual Report 2017) TIP offers a wide range of rental and leasing solutions and can advise on the different leasing regulations across Europe. With a transport fleet of over 70,000 units, TIP is one of Europe’s leading transport equipment leasing companies. It can purchase assets specifically for you.
TIP rental options
We offer trailers on a rental basis in all forms including flatbed, curtainsider, box trailers, tankers and reefers to fill short-term gaps in your fleet.
TIP leasing options
For fleet managers looking for a flexible and cost-effective way to manage their flexible medium to long-term trailer fleet requirements, TIP provides several trailer leasing options.
We also provide further value-added services across all our leasing solutions including replacement vehicles during servicing, roadside assistance, fleet and tyre management and telematics for your fleet. We can resell your used trucks and trailers.
Like Paris St-Germain with top players in football, continue building your trailer fleet into a world class business through a mix of leasing and renting. Simply get the best of both worlds through TIP Trailer Services. For more information about TIP trailer leasing and rental, please contact us here.
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