There are several factors that can cause a disruption in the supply chain, like fuel prices, labor shortages, inflation and much more. In the transportation industry, it creates difficulties for private fleets and companies wanting to add or replace current trucks with new equipment. These factors also contribute to an increase in costs, specifically for equipment, truck parts and new trucks. As result, fleets have fewer options to choose from.
Predicting truck operating expenses and forecasting customer demand is challenging. For those seeking more stability in their business, leasing or renting trucks is a viable option worth considering.
Full-Service Leasing
Leasing is a great alternative to owning trucks for those who want simplified cost accounting. Monthly leasing rates are predefined for the term, so there are no surprises or fluctuations in costs due to unexpected maintenance. You also avoid having to pay for the full cost of purchasing a truck outright. Truck maintenance, substitute vehicles and roadside assistance are also available and bundled into a convenient monthly payment. Here are some examples on how different companies may benefit from leasing:
- For companies whose primary business isn’t trucking, the capital retained by leasing and/or renting trucks can instead be used to address other areas of the business, and more time and energy can be focused on the core functions of the business rather than maintaining equipment.
- For trucking companies that rely on purchasing used trucks to replace or add trucks to their fleet, leasing may be a good substitute to potentially avoid overpaying for used equipment. Leased trucks are new, so therefore more reliable and backed by managed maintenance. Fleets don’t have to worry about maintenance issues coming up early when leasing, as might be the case with a used truck.
- For fleets operating in over-the-road or vocational applications, owning trucks is traditionally part of the business culture. However, as technology in trucks becomes more sophisticated and difficult to service, those with in-house maintenance options are finding it harder to keep up. The resources, hiring and training of staff needed to service new trucks quickly outweigh the benefits of working on equipment in-house.
Some fleets that own and lease a portion of their fleet utilize what’s called an ‘unbundled lease,’ where company-owned trucks receive the same benefits as leased trucks with the leasing company managing maintenance programs and providing replacement vehicles. Many leasing companies offer these types of programs, and it’s an effective way to consolidate and manage maintenance programs and costs.
Truck Rental
Renting trucks can be a good alternative for companies that experience more volatility in customer demand or work in industries that experience seasonal spikes, such as agriculture. The shorter-term agreements allow companies to easily scale the size of their fleet up or down to meet demand.
Buying used vehicles to support fleet operations is often a popular way for companies to address fluctuating fleet size, but when those vehicles aren’t being used, they’re a depreciating asset. If the company plans to run a new or used truck for a few years or if they don’t mind finding the next buyer, purchasing trucks may be the better option. But when the market becomes unpredictable, good deals to replace or add units may be hard to find. Rental trucks may be able to provide a long-term solution for temporary transportation needs or help bridge the gap until the truck market becomes more buyer friendly.
In conclusion, there is no perfect solution for fleets to overcome the challenges they’re constantly faced with, but depending on your operation, incorporating leased or rental trucks into your business may help save on costs and improve operational efficiencies.
Learn more about MHC Truck Leasing’s rental and leasing services, as well as our managed maintenance programs.