City Truck Rental is not the first rental operator to
Page 42
Page 43
If you've noticed an error in this article please click here to report it so we can fix it.
seek improvements in fleet usage through diversification, but it might be among the first to have adopted a haulage solution that keeps all its customers satisfied. As Steve McQueen explains, the company is using new trailer deliveries to the advantage of hauliers who can't fit in a load from the Continent...
t's a problem that every rental manager has to deal with at
some time: a customer in one part of the country, wants
equipment that is only available at the other end of the country. Matching the UK haulage fleet's transport requirements can present frequent logistical problems, so many rental operators will use extra drivers to deliver rental vehicles. Using an agency driver is one solution; another is to employ dedicated drivers—but this can be costly. The penalty for doing neither can be lost business.
City Truck Rental's solution was to establish City Delivery Services as the dedicated trailer delivery arm for the customers of its 200strong refrigerated trailer rental fleet. City Truck Rental is part of the 238m-turnover City Truck Group, which was established in 1979 by entrepreneur and present owner David Gee. Along with equipment drawn from a mixed fleet of more than 200 tractive units, 150 17-tonne reefers and about 70 other refrigerated and non-reefer vehicles, the trailers are based at the network's six depots around the UK. These are in Cardiff, Milton Keynes, Osset, Reading, St Helens and Tamworth.
Although CDS provides an important function in repositioning the City Truck Rental trailer fleet according to the needs of its customer base, when the level of fleet use is very high, or very low, the services of CDS are little used. This provoked a search for an alternative revenue source to take up the slack. The company began to provide its delivery services to other rental operators. But, as City Truck Rental's director Gary Lowther explains, the expansion of CDS's activities did not stop there: "About a year ago we asked trailer manufacturers such as Gray & Adams 'what are you doing to get your trailers delivered?'. More often than not it seemed that the manufacturers were getting their customers to collect the trailers, or were sometimes using a haulier."
CDS soon a win .r manufacturers such as G&A and Schmitz Cargobull, delivering new trailers to the end users. Other trailer manufacturers became interested, too. Before long CDS had a contract to bring more than 50 trailers into the UK for Lamberet from Macon in France.
For a haulier performing such a service the next step would have been to put loads into the back of as many of the trailers as possible. For a truck rental operator with haulage customers, such a move could well have proved controversial. Although the transport industry seems to have accepted a situation where vehicle manufacturers compete openly For business with the rental fleets they supply, the notion of a rental operator starting up a haulage business in competition with its haulage customers would have produced an unhealthy customer response. The company was understandably keen to avoid any conflict of interests. "The last thing we wanted to do was to compete with our customers," says Lowther. "It wasn't a question of going out on to the open market in order to find loads—we didn't want to go touting to Joe Bloggs the fruiterer, who wants 20 tonnes of apples moved. We also had some refrigerated trailers of our own that had to be collected from SOR in Spain and we knew it would cost a lot less to bring them in if we could put a load in the back," As the end user ultimately pays for the delivery of the new trailer, whether an amount is included in the actual cost or there is a delivery charge, CDS reasoned that users would be unlikely to object to a proposal that reduced the overall cost of a new trailer. In the end, a practical solution was found that also helped some of City Truck Rental's haulier customers. Lowther explains: "We asked some of our international operators if they could help by providing us with any loads that were coming back: loads that they could not do by using their own Fleets. Several of them told us to give them a call when we knew we would be out there, and that's what we did."
Consequently, City Truck Rental's CDS operation has grown. There are now 10 units with 10 dedicated drivers regularly collecting loads from Continental locations and bringing them into the UK in new trailers. The actual number can vary from as few as five to as many as 25 trailers a week. It all depends on the delivery contract. However, the trailers are not always loaded: "If a load is available from close to where we happen to collect a trailer, we can do it," says Lowther. "IF the trailer is needed urgently back in the UK, it comes back empty. The end user's needs always take priority—it's that simple. "We are acting as a subcontractor," he adds, "but we have advantages over regular hauliers in that we don't have to worry about where we are going to ,get our next load. IF we do the job, it benefits the haulier who still takes his margin for the load. It reduces the delivery cost of the trailer to the end user and it reduces our overall cost of doing the job—at a time when our own fleet usage might be poor. If we don't carry the load, we still get a rate for the delivery, it's just not as great," Few end users have objected to having their trailers used in this way, although some preferred to have their new trailers delivered in pristine condition. Others seemed happy with the prospect of a full loaded "road test" in addition to the lower delivery charges.
The CDS contribution to City Truck Rental's turnover is only about 2250,000 a year. However, as Lowther boints out, this is a significant factor when standing costs and tie potentially lower Fleet usage levels are taken into account. Adding the haulage dimension might have helped increase usage and proved a significant contribution to the CDS delivery operation, but Lowther says the company has no ambitions to extend into Full-time haulage. "As far as CDS is concerned, our core business is trailer delivery and repositioning our own kit," he stresses. "The rental side always comes first and there is no internal competition between haulage work and rental business. At the end of the day, we are a part of the City Truck Group. We would not want to be seen to be competing with our City Logistics operation, for example. It doesn't have business abroad and we have no ambitions to get involved in any domestic haulage. It's simply the case that some of our customers have trailers abroad that they want to get into the UK, while some of our other customers have loads available that can fit into the back of them. It all just fits together quite nicely."
FACTFILE
BASED: TAC
ewport PagneIl.OUNDE 1995 Gary Lowther, director. Mixe
fl e than 200 tractive units, 150 17-tonn fridges and about 70 other refrigerated and no reefer vehicles, plus a 200-strong refrigerate trailer rental fleet.
Refrigerated trailer rental and delivery plus general haulage. Undisclosed; parent City Truck Group's turnover is £38m; CDS 'ti" contribution is around E250,000.