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TRUCK FOLLOWS TRAILER INTO RENTAL WORLD

22nd June 1985, Page 70
22nd June 1985
Page 70
Page 71
Page 70, 22nd June 1985 — TRUCK FOLLOWS TRAILER INTO RENTAL WORLD
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In seven years Trailerent has reached number two position in the UK trailer rental market. Now its founders are hoping for similar success for the company's new lorry rental division. David Wilcox reports

January 11, 1985: At Staines, Middlesex. To Trailerent, a son, Truckrent. Mother and baby doing well.

TRUCKRENT (the description of truck rental company seems superfluous) was born out of Trailerent this January and if it has inherited its mother company's characteristics then it will soon be making itself heard.

Thc three men who have

masterminded the Truckrent launch are the sn-le who started Trailerent seven years ago — Mike Dibb, managing director; Jim Moorehead, operations director; and Geoffrey Markham, finance director. They were all at Crane Fruehauf's trailer rental arm Rentco in the mid-Seventies and broke away to launch Trailcrent in 1978.

With the aid of loan funds guaranteed by National Car Parks, Trailerent's growth was nothing short of meteoric. Recalled Jim Moorehead: "We were necessarily very keen. We had a new fleet of trailers and we would deliver them into customers. But we weren't necessarily any cheaper than the competition."

During 1980-81 growth continued but at a rate slowed by the recession. "In the trailer rental business you feel the effect of a downturn in the economy very quickly indeed", remarked finance director Geoff Markham, "but you recover quickly too."

A turning point came in July 1982 when Mercantile Credit, the Barclays Bank finance house, took over Trailerent. It had been Mercantile Credit which had been providing Trailerent's loan capital in the past, via the NCP guarantee, and it seemed logical to incorporate Trailerent into Mercantile's portfolio of automotive companies.

It proved to be a good move and Trailerent's growth curve steepened even more dramatically, helped by its enhanced ability to get adequate funds at the right rates. Geoff Markham stressed how important that was in such a capital intensive industry. "And we can get surprisingly quick decisions on finance," added Jim Moorehead. "The lines of communication are really very short." Last year Trailerent spent 00m on a new equipment.

In addition to good finance, Trailerent's growth was helped by the uncertainty in the road transport industry, particularly over the increase in maximum gross weights during 1982/83. Operators who could not commit themselves to buying would rent.

The Trailerent fleet now stands at . 3,500 trailers (including those currently on order) and the company's 18th depot is soon to be opened in Edinburgh. This places Trailerent at number two (behind TIP) in the league of trailer rental .companies, a position achieved from a standing start in under seven years.

This demonstrates a hunger for growth that is not easily satiated; hence Truckrent. The idea was researched last summer in time for this January's launch. Jim Moorehead stressed that this diversification into truck rental does not indicate that the Trailerent business is levelling off: "Trailerent growth is by no means exhausted," he said. "We've still got a lot of work to do in the North East and Scotland, for instance. But we are restricted to a certain extent by the growth in the UK economy. The diversification gives us another market."

On its January launch date Truckrent had 45 vehicles. Including those on order, this figure has now risen to 170 and should be 200 by the end of the year.

Like any truck rental company, Truckrent has tried to cover as much of the market as possible with its choice of vehicles. It has therefore homed in on just four classes of vehicle that are as • versatile as possible. There are 7.5 and 16.26-tonne-gvw rigids which are fitted with box, dropside, curtainside or refrigerated bodywork. The 7.5-tonners are Ford Cargo 0811 chassis, chosen in preference to the Leyland Roadrunner mainly because the Roadrunner was felt to be too much of an unknown quantity for Truckrent's first vehicles.

The 16-tonners are Daf 2100 rigids and Truckrent has stayed with Daf for its other two classes of vehicle, 32.5tonnes and 38-tonne-gcw tractive units. . These arc Daf 2800 units in either 6x2 or 4x2 configuration (sleeper cabs) and a few 2500 units with day cabs.

Marketing manager Jim McGovern , said that rental tractive units need to have strong driver. appeal because the drivers frequently have a say in what units are rented. Daf scored here and was also chosen because of its back-up service and dealer support. This is . important for Truckrent because it is dependent on the local dealers for maintenance and repairs (although this will be changing).

Geoff Markham had some harsh words to say about some truck manufacturers' sales efforts. He recounted how he and his fellow directors had visited the Motor Show, talking to manufacturers about Truckrent's proposed purchase plans. Despite the name of Trailerent behind them they did not get the attention they clearly deserved. "We're still waiting for some of the quotes."

Ultimately, most Trailerent branches will become dual branches, with Truckrent on the same site. At the moment Truckrent is restricted to Slough, Milton Keynes and Southampton branches, with Birmingham, Pilsworth, Nuneaton and Glasgow due to come on stream during the year.

Although trailer rental and truck rental complement one another nicely, Jim McGovern observed that there are some interesting differences between them too. He explained that customers usually demand their truck rental branches close at hand whereas there is less resistance to travelling to pick up a trailer.

Jim McGovern attributes this anomaly to the fact that trailer rental customers already have their own motive power arid that the average trailer rental period is considerably longer than that for a truck. And because truck rental periods are normally rather shorter this has involved the company in more administration work, coupled with the .additional maintenance needed by trucks ,compared with trailers.

"Truck rental seems to be far more .emotive than trailer rental," continued Jim. He said that a transport manager might walk past a rented trailer in his yard without a second glance but he will certainly ask questions about a rented tractive unit. The intention was to establish Truckrent as a spot-hire fleet first, earning acceptance and credibility in the market. This is still the plan although sonic vehicles have already been signed up on contract hire deals.

Geoff Markham believes that eventually 60 per cent of the Truckrent fleet will be out on contract hire, which in this case he defined as periods of one year or more, With or without a maintenance agreement. He said that the recent changes in, corporation tax, the phasing out of first-year capital allowances and the introduction of SSAP 21 (which brings leased assets like commercial vehicles onto the balance 'sheet) have all focussed attention on how and why commercial vehicles are acquired.

In general these changes have tipped the balance in favour of contract hire and away from straight financial leasing, said Geoff Markham.

Operations director Jim Moorehead agreed that financial factors are having an increasing influence on vehicle purchase. "The scorekeepers are taking over the game," he said.

In addition to opening new depots in quick-fire succession, Trailerent (Truckrent is a division of Trailerent) has a programme of upgrading and developing many of its existing branches. Some will be moved CO sites more suitable to their new dual-purpose role and maintenance facilities arc to be built where necessary. The availability of in-house maintenance is seen as essential for growth in the contract hire market.

Having a sympathetic finance house as a parent company has obviously helped fuel Trailerent's growth; but there must be other reasons too. I asked Jim Moorehead what he considered Trailerent's (and Truckrent's) selling points to be.

He put forward these two points. First was ease of rental, with Trailerent streamlining the process of hiring. And second was a fleet of new, wellpresented tricks and trailers. All'the Truckrent fleet is obviously new and they are fitted with radiocassettes. They will probably have a three-year life-span with Truckrent.

The trailers have a life cycle of six years' use followed by a refurbishment.

Geoff Markham hinted at a few more ideas that may be in the Trailerent/Truckrent pipeline. The variety of vehicles in the Truckrent fleet might be extended, according to demand; the local authority and municipal market was mentioned as an interesting target. Jim McGovern added that the company is not shutting its mind to the possibility of going below the 7.5-tonne class. "And we are not into Europe yet, with trailers or trucks".


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