estination: unclear As the used truck sector begins to stall
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ahead of Euro-6, rental comes to the fore Words: Steve Banner Uncertainty over which direction the used truck market is heading in at a time of continued economic difficulty is prompting Jamie McDonald, the director of RJM Commercials, to place more emphasis on his expanding rental operation.
"A lot of operators are hiring rather than buying at present because they aren't sure exactly where the economy is going," he remarks. "You never know from one day to the next what's going to happen."
McDonald set up RJM Commercials in Besthorpe in rural Norfolk in September 2009 with the aim of providing transport companies with a one-stop-shop.
"We service trucks, we sell used examples and we hire them out too," he says. The 11-strong hire fleet is made up of a mixture of Volvo FHs, R-series Scanias and Renault Premiums, all 6x2s.
"The oldest dates back to 2008 and we've got six out on long-term rental, with the remainder available for spot hire," he says.
Customers tend to be local hauliers and farmers — "most of them rent our trucks for local work, although we've got a few who use them for long-distance trunking"— and McDonald is determined not to slash his rates in a bid to grab business.
"I'm not in the habit of ringing around to find out what other rental firms are charging, then under-cutting them," he says. Instead, he works out what he believes is a sensible rate that allows everybody involved to make a fair profit and RJM Commercials to provide any back-up the customer may require.
Always on call "If operators wish to go somewhere cheaper, then that's entirely up to them," he comments. "They should bear in mind though that we're ready to provide support 24 hours a day, seven days a week should any problems occur."
Not that he is neglecting used truck sales. He is, however, restricting himself to tractor units that retail at up to £25,000: vehicles for which there is still a healthy market.
"I'm wary of taking a lot of expensive motors into stock and remember, that for about £25,000, an operator can get a 2008/2009 FH or a 2008 480hp R-series," he says. That's a lot of metal for a comparatively modest amount of cash.
Despite the fact that Euro-6 will be mandatory for newly registered trucks from January 2014, it receives little if any mention among McDonald's clients. He has had nobody asking him to find them a late-registered Euro-5 so that they can postpone complying with the new standard.
"I've only had one customer make any reference to it," he remarks.
Five minutes from the All, 20 minutes from Norwich and an hour-and-a-quarter from Stansted airport, RJM Commercials has a full workshop at present.
"I've got two fitters plus a lad and, looking at the amount of work coming in, I could probably stand to recruit three more fitters," says McDonald.
He has no immediate plans to do so, however. As he says, the economy is in a state of flux: and while he may have sufficient work for three more employees today, who knows what next month may bring. •