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Hire and fire business

8th November 1980
Page 38
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Page 38, 8th November 1980 — Hire and fire business
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Which of the following most accurately describes the problem?

NHILE the recession deepens Ind transport remains generally n the doldrums, some sectors ;how significant advances. One lire company at least is now inding a greatly increased denand for its reefer vans.

The industry has survived iobbling by the drivers' and the teel strikes; and it sustains unirecedented niggling — the Vindsor Cordon, no-go areas, igh vehicle taxes, juggernaut aver and the like. But changes -lay be coming through for the etter. Hire and rental, and ontracting-out maintenance icilities, are areas in which to eek help and better cash flow. letting maximum use of ehicles is what efficiency that reeds survival is about.

In the own-account sector, ow many companies have run )o many vehicles on a yeariund basis so that they can take ire of their peaks and troughs. erhaps it made sense before. ut now ...? Better to make use F hire vehicles.

Not every country has a signi2ant hire industry. This sector very strong in America, but .gulations prevent its lift-off in ermany, I understand, while 'aikin, 5 Central Park Estate, taines Road, Hounslow (tel: 1) 572 6268), which began ck rental and contract hire in Britain in January 1979, has a French parent.

Hiring trailers is another potential for improving vehicle use. Three big companies here are: TIP Trailer Rental, Star House, 67-71 Clarendon Road, Watford, Herts (tel: 0923 48311) with 4,000 trailers; Rentco Nationwide, Hayes Gate House, Uxbridge Road, Hayes, Middx (tel: (01) 561 6062 or (01) 561 0078) with 3,500 trailers; and Trailerent, Harlen House, London Road, Staines, Middx (tel: 0784 62841) with 1,300 trailers.

These firms have depots virtually all over the country; and TIP, for instance, has 2,000 trailers for hire abroad. However, there are scores of smaller firms. The major ones among these were detailed in our Guide to Trailer Rental (CM, July 26).

These facilities mean that a haulier mothballing lorries while loads are short can still serve a good customer he will need again when times are better and he wants to make the odd extra haul beyond his trimmed down capacity.

Hire or reward hauliers, besides the own-account side that is the traditionally strong user of hire/rental companies, are involving themselves in this field. Hauliers should be particularly interested in the very latest, hitherto unpublished, news from Avis Truck Rental, Ventura House, Station Road, Hayes, Middx (tel: (01) 561 1444; telex 262758.

For the own-account account side Avis, like several firms, has advertised that its Truck Leasing saves capital, depreciation worries and maintenance costs, and reduces administration costs. "Even the tax man's on a hirer's side with a deduction being available on lease payments made for business use."

Avis will also buy an existing fleet — "subject to condition" — and lease it back. The latter is a facility which could even make the difference to survival for a small manufacturer who needs his capital for his business, which is not transport.

But operators on both sides who need a tractive unit for maximum capacity loads can now hire one — a Leyland T45 — for £438 for a month, but it must be a five-year contract.

Here's what Jim McGovern, Avis Truck Leasing and Rental marketing manager, told me about Leyland. "This is the first time we've had Leylands in our fleet. They are a much more confident company today. And the customers like them."

Avis will lend you a Volvo F10 under its new scheme. But it will cost you — £504 in fact for the same period.

Hire firms feel the recession too — though Jim, and his colleague Ian Wilkie, area manager, don't seem to share in depression. Avis, anyway, has made the sort of current progress which is significant at any time whether of recession, no growth or expansion. It is in fridge vans. Business has increased by around 25 per cent within 12 months.

Avis first offered a refrigerated meat loader only 15 months ago. The firm's current offer here is diesels with 16-ton gvw (Bedford KM/Ford D01614/Fiat 159/Mercedes 16171 at, for instance, £40.25 per day seven to 27 days; and among petrol-engined vehicles Bedford KDS/Ford D070 with 7.37-ton gvw at £24.65 for the same time.

"Now, for the first time, and we're the first rental company to have this, we offer a baby fridge," I was told. "Besides the 35cwt reefer we have 42 body specs available in a fleet of around 1,100."

I had wondered whether reduced demand means hire companies have improved vehicle availability. Shocking thought! "We always have vehicles to spare in order to have, in any reasonable circumstances, instant vehicle availability," they said.

"We believe we have the finest locations in Britain, with maintenance at 26 of our 29 depots, and those that don't do maintenance based within ten miles of a major location. We jealously guard our 0-licences like any operator. So many small firms work out of backyards. We have plans to expand and are looking around. Today, with 0licences, CPCs and keen markets we can't afford to offer anything below par excellence. Heads would roll if we had anything like a GV9.

"We were at first car-oriented, but in the last couple of years, the last six months especially, we have become more transport oriented, organising ourselves with a separate identity and separate service. We audit business on service. In the London area contract maintenance has expanded dramatically."

At BRS Truck and Trailer Rental, Northway House, High Road, Whetstone, London N20 (tel: (01) 446 1360) I met Jerry Simmons, group marketing director, who said that, of course, operators are well-advised to reduce fleets to their optimum level and rent-in to take care of demand peaks.

That this is beginning to work is indicated by experience in utilisation, he said.

On the trailer side BRS too has not experienced the same downturn in trade as in lorries and the company has maintained its fleet level. New specialist equipment on the market is proving acceptable — the psk and the curtainsicter in particular. "We are test marketing a very sophisticated trailer for the air cargo industry to speed aircraft turnround," he said.

Obviously BRS cannot mention individual customers' developments identifiably, but its own distribution activity in Eastern BRS — for Spillers, the animal food firm at Wisbech — is typical of the sort of evaluation carried out by operators to improve vehicle and manpower utilisation by speeding distribution efficiency. Operators are aware too of the 1981 date for the eight hours driving day. The introduction at Spillers of curtainsiders has led to a revised and vastly improved delivery schedule.

BRS claims to be unique in offering both trailer and lorry rental to the market. However, it believes it made the same mistake as the rest in its vehicle market forecast. In fact new levels of sales were maintained till March, when "they virtually disappeared overnight." Now the rate is 35 per cent below this time last year. In other words, operators did not read the recession until it hit them.

Jerry Simmons said that BRS concentrates its attention into specific areas. Dealing with short-time rental, he said that its capital expenditure forecast has been cut by £7m, and, looking to maximum vehicle use, like any operator, has reduced its fleet (rental, that is) by 40 per cent.

"Our investment strategy has been selectively to replace vehicles in specific weight categories where we can maintain an acceptable level of use. But we are preserving our two-year fleet age profile. The market place demands a premium product despite the recession. Part of the overall resilience of our organisation is that having other activities enables us to redeplo vehicles otherwise dispensa ble."

Jerry Simmons said his corr pany had launched a premiur offer promotional programm with aggressive marketing, an tried to keep up with new idea: "We were the first to enter th market with the T45, on ar nouncement day; that was a bi gamble which paid off well. Th vehicle is achieving a very hig level of customer acceptabilie "We are into one-way renta with ten designated depots; th must be of particular advantag to operators unable to get badl loads. And the BRS Rescue se vice, with its unique replacr ment vehicle facility, i expanding. When a load has 1 go on or a replacement vehicle needed, this is where truck rei tal comes in."

He said that on longer-ten business — contract hire — ne business is being signed at z acceptable level. This yer investment would exceed £10 (around 750 vehicles) -lc contract hire alone in respore to customers' contracts.

Looking to the future, he b lieves short-term rental will t the first to recover as operator volumes increase. It will tal sometime for industry to acce a degree of permanency in ti upswing of recovery, therefo operators will resort to the sho term alternative. He expects marginal increase around ne April and full stride from abo September 1981.


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