While the economy is improving, its future remains uncertain; rentals keep transport companies flexible, so market demand is rising.
Whenever Meyer Logistics, a major logistics company based near Frankfurt that counts Burger King and Lidl among its customers, needs to expand its 1,100-strong truck fleet on short notice, it turns to Scania Deutschland.
“Meyer’s owner very much appreciates our cooperation,” says Christian Teichmann, Sales Director for Scania in Austria and Germany. “If he gets a new contract or a new location and needs to start right away, he picks up the phone and calls us.”
Rentals account for a growing percentage of the German truck market, and Teichmann estimates that they will reach 15 to 20 percent of the heavy truck market within the next year. “We are talking about 10,000 to 15,000 trucks to be registered by rental companies,” he says.
Scania Deutschland has a fleet of some 1,000 trucks available for rental, with a current utilisation rate of about 90 percent. “We are increasing our fleet to 1,300 trucks next year to be able to respond to the market demand,” says Teichmann.
Another loyal customer for Scania Deutschland is logistics company Kolberg, based in Berlin. Kolberg is a subcontractor for DHL. “Along their own 25 vehicles they always have five Scania rental trucks,” says Teichmann. “They use these when DHL has its peaks, such as at Easter and Christmas. These peaks make it difficult for DHL subcontractors to optimise their truck fleets. By renting from Scania Rent they are able to adapt to the peaks of their customers.”
After excellent results from its rental operations in 2006 and 2007, Scania Deutschland had two relatively tough years in 2008 and 2009, as struggling customers had to return their rental vehicles. “But now Germany is coming out of the crisis, which is one of the reasons we have for such high utilisation rates,” says Teichmann.
why interest for rented trucks is increasing:
- Renting gives operators the flexibility to deal with changing demands.
- Transport companies don’t need to tie up as much cash.
- Newly established companies can get easy access to vehicles.
Renting ramps up flexibility
As the global economy picks up speed, demand for trucks rented directly from Scania is expected to double in 2011.
Renting trucks – as opposed to purchasing or leasing – gives operators the flexibility to deal with changing demands.
“Customers like the fact that when they are renting they can return the vehicle at any time, as opposed to leasing, in which you have to fulfil the contract,” says Henrik Orrling, Sales Director, Scania Trucks Europe. “Also they don’t need to tie up as much cash; they get a monthly fee instead of a large investment on the balance sheet.”
Newly established companies with no proven financial track record can get easy access to vehicles through renting, Orrling explains, and renting directly from Scania ensures that the operator gets the best possible advice about operating the vehicles and that the trucks are properly maintained.
As the global economic picture brightens, demand for rental vehicles is growing. “As we head towards 2011, we are experiencing a boom in rentals,” Orrling says. “The market is coming back, but not everyone is willing to make investments in vehicles now.”
According to him, truck operators appreciate the option to choose rentals for new haulier contracts so they can get started at once without committing to new purchases.