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matters by John Darker, AMBIM
RAILER RENTAL or leasing has made 3ectacular progress in the United States nd it is catching on fast here and on the !ontinent. Some of the largest British trailer takers such as York and Crane Fruehauf ave entered the leasing field. It is a iversification that involves much capital nd requires specialized experience; perhaps le increasing concentration of trailer uilding firms will encourage more leasing fl-shoots? Anyone entering this business lust realize that full return of capital may Ike two years or more.
Transport Pool Inc, with some 20 ranches spread across the United States. nd a Canadian branch at Toronto, has ;cently set up shop at West Thurrock, ssex, close to the Dartmouth Tunnel. The ,merican parent firm was founded in 1966 y Mr Bill Sennett, a former executive of the trick company. Growth was rapid; today ransport Pool Inc owns some 10,000 ailers.
Transport International Pool Ltd (TIP), le British subsidiary of Transport Pool Inc, as already leased about 200 trailers and a trther 200 are on order. Business is so risk that the company hopes to establish at ast one other depot, probably between irmingham and Manchester, in 1970.
Why hire trailers? No two operators ould give the same answer and a third perator might say he would never hire on -inciple. The case for hiring to meet peak affic demands is a strong one. Seasonal or rclical patterns are general throughout ansport and any operator setting out to wer all likely commitments with his own et will need to sub-contract a proportion " his fleet during quiet spells. Vehicles lb-contracted to other hauliers tend to ork at the principal's rate less five or 10 .tr cent. Far better seek good rated traffic id hire the trailer for just as long as it is !eded. For the £1200 or so that a new 33ft ailer costs you could hire 15!
TIP daily hire rates—which are exclusive 'road taxes and insurance—vary from 72s day for a 33ft tandem axle trailer to 160s day for a 3000 cu ft 40ft space van. The *ree" mileage is 150 miles per day, after hich 3d per mile is charged. Leasing rates 11 proportionately with length of hire. For 12-month period a 33ft flat trailer costs i2 a month—a figure that is substantially reduced for a longer-term agreement. To hire a 12-metre TIR tilt trailer for a month costs £126; the 12-metre Kangaroo trailer costs rather more, £.137.
Leasing for terms in excess of one year can sometimes yield tax benefits; it conserves capital and maintains credit limits. Fixed-term contracts eliminate the risk of possible surplus equipment at the expiry of a contract and enable operators to know, within close limits, their trailer cost for the contract period. The ability to rent a specialized trailer for a customer who may not be certain his business can justify this but welcomes the chance to experiment for a determinable period, is certainly valuable. It is the essence of the leasing organization's appeal that hauliers can add to their freight-moving capacity at will, in line with increasing business. Costs are not increased without the business to pay for them.
Some hauliers rent trailers while they study operating costs on a new service. If a new line of business does not prove to be profitable it can be discontinued, with no great harm done. If it proves a winner the operator can decide whether to effect a long-term leasing contract or to purchase and maintain his own trailers.
Containerization is introducing many hauliers and own-account operators to trailer leasing. It is possible to rent dual-purpose general cargo /container carriers or standard skeletal trailers. The number of hauliers and container service operators who do not see the necessity of moving containers on special-purpose trailers ought by now to be dwindling, though there is no evidence that this is so.
Safety reasons Recent safety legislation provides further argument for trailer leasing. Licensed carrying capacity can be maintained while trailers are undergoing maintenance or plating and testing; down-plating of trailers is less of an economic handicap. The specification of leased trailers is maintained by leasing firms to standards complying with current legislation. Operators buying new trailers must face the risk of further expense as legal requirements change.
If the nature of the business permits pre-loading of trailers it may be profitable to increase the trailer /tractor ratio. Trailer maintenance, including tyre replacement, is shared with the leasing firm, and multi-party agreements are sometimes feasible. TIP, for example, offers to arrange rentals by and between shippers, hauliers and private carriers, etc, thus facilitating back-loading of trailers sent on wheels across the Atlantic or between associate firms in Holland and Belgium and, before long, France and Sweden.
Mr Hugh Cockett, sales and marketing executive of TIP, says the average trailer rental is for two-and-a-half to three weeks. Most customers keep them for longer than they expected. Only a tiny percentage of customers seek threeor five-year contracts. He stresses that though TIP accepts responsibility with short-period contracts with general maintenance, tyres, normal wear and tear and MoT testing and plating, customers are responsible for damages and must advise the hirers. The biggest plague is the removal of light glasses and damage to light fittings. "This is a vicious circle", he said. "Drivers make good their losses of light fittings by pilferage. It is a struggle to keep returned trailers in 100 per cent order."
All TIP trailers are specially built to high specifications. Rubery Owen running gear with oil-filled hubs and Engler hubometers are a standard feature. So are heavy-duty springs and brakes. Radial tube or tubeless tyres are fitted. TIP says it gets 60,000-70,000 miles out of properly inflated tyres.
So far as possible trailer specifications are aligned to facilitate international operations. If there were not different state requirements in the US the trailers and equipment supplied in the UK could be identical. TIP expects soon to be offering customers the facility of hiring 12-metre trailers in the UK which can be dropped at Antwerp, Rotterdam, Amsterdam or Gothenburg with the option of collecting a different type of trailer.
What sort of firms hire trailers? Mr Cockett says his customers vary from five-unit, 10-trailer firms to those operating as many as 50 units with a large fleet of trailers. The rapid expansion of TIR business is a growth factor in trailer rentals; so is the recognition by many customers that skeletals fitted with twistlocks are essential. It is attractive to some customers to have a new trailer every year: the diminishing rental scheme permits operators