Trailer Renting
The emphasis Is on productivity
About 30% of TIP's rental reservations are now done through its website, and many come in before 8 a.m., after 5 p.m., and on weekends. Customers said they usually make the decision to rent a trailer in a 48-hour window.
PATRICIA SMITH
SENIOR EDITOR
Cautious fleet managers often choose short-term equipment rental to ease into business expansion. Therefore, we traditionally look to trailer rental companies for signs of good news. But so far this year, the signals are fuzzy.
Despite first quarter GDP growth, executives of the country's two biggest trailer lease/rental companies had little more than guarded optimism for the immediate future.
March and April rental sales were up some from a year ago "but I wouldn't call it booming," said Steve Zaborowski, vice president of operations for Xtra Lease.
"It's a little better than last year," reported Chris Hines, president of TIP North America, "but we're a long way from dancing in the end zone."
The still sluggish economy is partly to blame but so is an excess supply of available trailers. Just as we saw with heavy duty trucks, the trailer population ballooned during the boom years — spurred by fleet expansion and manufacturer deals. When freight slowed, equipment was parked. As Hines noted, every tractor that's idle means there are also approximately 2.5 trailers standing still.
With overcapacity as a major hurdle, it's not surprising that trailer lease/rental companies are gearing up for renewed business by offering customers ways to get by with fewer trailers, not more.
Trailer Tracking
Some time ago Xtra Lease formed a long-term alliance with Terion Inc. and now installs FleetView tracking devices in all of its rental van trailers. Eventually, FleetView will also be standard equipment in rental reefers and flatbeds.
FleetView is offered as an option on lease trailers and can be purchased and financed through Xtra Lease for customer-owned equipment.
Security is the major selling point for trailer tracking these days, but Zaborowski said it was the need to keep better tabs on trailers that prompted them to make the investment.
"Many of our customers were telling us they had too many trailers," he recalled. "For some, it was their number one problem."
Rental is the logical solution. With good planning, a carrier can run a lean trailer fleet and supplement with short-term rental. Unfortunately, the inability to keep track of rental equipment can make this an expensive alternative.
"A customer would rent a trailer for a short period of time, say a couple of weeks, but it would get lost in their system for several weeks or even a couple of months," Zaborowski explained. "So they were reluctant to really use the rental companies to supplement existing capacity." Thus trailer tracking and rental was, for Xtra, a good match.
TIP doesn't yet offer trailer tracking on its rentals but will bundle any system the customer chooses into a lease package.
"We think there is phenomenal productivity to be had with the right technology, but we think the price points today are too high and will come down tremendously," said Hines. "Our vision is certainly a business with tracking and other fleet management tools but we're being very cautious. We want to make sure we pick the right partner for the long run."
Easier Maintenance, Longer Life
Meantime, TIP is tackling productivity from the maintenance side. "Our customers told us "we need help in cities where we don't have shops, but we can't bring the trailers to you, you need to come to us,'" said Hines. The answer was a mobile maintenance program that offers a range of on-site services, from inspections and preventive maintenance to some major repairs.
The service, which is available for customer-owned trailers as well as TIP units, reduces time and miles which boosts productivity, Hines noted. It also addresses the changing maintenance needs of carriers who are opting to keep their equipment a year or two beyond normal trade cycles.
"In this uncertain market, that certainly makes sense," he said.
Internally, lease/rental companies get maximum return from their investment by moving trailers through a variety of markets. Older vans, for instance, can be transferred from long-haul to short-haul service as they age, then retired to storage operations.
"It's hard to kill a trailer if it's been kept in good shape," noted Zaborowski. "Although you probably wouldn't run an 18-year-old trailer over the highway."
Bigger, Smarter Trailers
Increasing the payload is a never-ending quest. Zaborowski said one of their long-term goals is to stretch the inside width of a sheet and post van trailer from 100 inches, their current standard, to 101 inches. That would give them the same inside capacity as a plate van, he noted, but the sheet and post design is more durable and less expensive to repair.
Hines thinks the next big design thrust will be to "smart" trailers integrated with the tractor.
"They'll talk to you," he said. "They'll let you know when it's time for preventive maintenance or when it's time to replace certain componentry. I think we'll get there faster than we'll get to a trailer that's taller, wider, or carries more weight."
Paring Paperwork
Along with trailer productivity, both companies are trying to boost administrative efficiency by putting paperwork on the Internet.
"There aren't a lot of companies out there today who have people with nothing to do," explained Zaborowski. "So one focus of our website is to simplify cumbersome tasks."
The ability to check trailer availability and make online reservations has enabled rental companies to offer 24/7 service. Hines said about 30% of TIP's rental reservations are now done through their website, and many come in before 8 a.m., after 5 p.m., and on weekends.
"Customers have told us they usually make the decision to rent a trailer in a 48-hour window," said Zaborowski. "It's not like renting a car where you know you're going to be in Philadelphia next week and you know you're going to need a car. It's more like "okay, I've got a load but I don't have a trailer. Now what do I do?'"
Carriers who need rental trailers at multiple locations once had to make several calls to regional or branch offices. Now they can do one quick search via the Internet.
"A lot of customers log on when they're bidding a new account and they don't have the assets in their own fleets," said Hines. "They can be talking on the phone and toggle over to our website and find out if the assets are available from us."
Modern technology has also reduced the headaches of damage reports. Instead of faxes, telephone calls and mail back and forth, reports can be submitted, reviewed, and approved via e-mail or secure Internet sites.
"A damage notification that might have taken 15 to 20 minutes to process before can now be handled in a couple of minutes," Zaborowski noted.
TIP facilities are now equipped with handheld computers and digital cameras so customers can have Internet access to repair damage worksheets and photos of trailer damage along with other password-protected account information.
Even some seemingly minor services have yielded big productivity benefits. Zaborowski said they used to get over 2,000 calls a month from customers who needed a copy of the trailer registration. Now registrations can be downloaded off the website.
Even some law enforcement agencies are using the service.
"If an Xtra Lease customer pulls into a weigh station and the registration is missing, they can go to our website, enter the VIN number, and get a copy of the registration," he explained. "It seems like a little thing, but it's one of those things that happens all the time."
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