I n the past decade Felixstowebased container haulier Goodway has expanded
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its fleet from six to more than 100 either through hire purchase or, more commonly, finance leasing. It never buys its trucks outright, preferring to spread the cost over a period of time. Its most recent acquisition — 12 Volvo F10 tractors — was made at the end of last year with the help of a finance lease package from Volvo Truck Finance.
Goodway opts for finance lease or hire purchase because of the tax benefits they give, and finance lease is currently more advantageous, says chairman Peter Miller.
The only other way Goodway expands its fleet is through the use of owner-drivers — it uses 200 to help it distribute an average of 300 containers a day throughout the UK for the major shipping lines: "We have always used owner-drivers — it is a competitive way of increasing turnover without making a substantial investment," says Miller.
He applies the same principle to his truck acquisition: Tinance lease gives Goodway all the benefits of actually owning trucks without major initial financial outlay," he explains. "At the end of what is called a primary rental period you are given the option to sell the truck and get a substantial proportion of the sale price, or keep it on hire for a nominal fee."
Miller appreciates the flexibility of being able to decide when to sell the truck, at a price he is happy with. Fluctuating used truck prices make it impractical to put a vehicle on the market at fixed times.
The company aims to protect itself further from fluctuating resale prices by buying only Volvos and Scanias — marques which Miller finds have good residual values. Its fleet of three-mded tractors is split evenly between the two Swedish manufacturers.
Goodway can sell its 38-tonners on finance with Volvo Truck Finance after three years, and if it does so it retains 97.5% of the sale price. If it keeps a truck it could end up paying as little as £150 per year to Volvo Truck Finance.
Vehicles are generally kept for four years, after which time Miller reckons they cost too much to maintain.
Ile, chose to take up a contract maintenance deal with the loca Volvo distributor, Duffields of Ips wich. This gives Goodway known fixed operating costs and cuts ou the risk of unexpected repair bills
Among the benefits of such a youn: fleet is the fact that repairs are s, infrequent there is no need to keep workshop: "We like to concentrate o: our main core business," says Mille/ "Running a workshop would onl ivert us from our distribution service." Goodway hauls for shipping giants IOCL, Ang,lo Soviet and Contship il(). It increased its market share y 20% last year and its turnover is 2.t to rise by £2m this year.
The fleet is due to be joined by 4 new trucks during the next 12 ionths. Naturally Miller will be valuating the various buying opons, but for the past 18 months
he has been pleased with the finance lease system.
"In an ideal world," he says, "we would like to be able to pay a flat £55,000 for a truck with three or five-year repair and maintenance by the manufacturer's agent all under some kind of finance deal. You can get a deal like this with contract hire, but we find this method has too many constraints."