How does owning vs leasing trailers compare in flexibility?
Increased demand has filled almost every build slot in 2021 at every manufacturer. That adds up to a long wait for a new van or reefer.
To buy a used trailer, you have to find one with the specs and vintage you need; it can be easier to rent or lease a trailer to meet your contract obligations.
Customer demands have always been changeable and are even more so today. If you over-order, you could end up with a bunch of idle trailers in your yard next year. You can return trailers your rented and leased trailers at the end of their term, minimizing the risk of being stuck with unusable trailers when your busy season ends.
More shippers and carriers are building trailer pools to handle the pressure for quick turnaround, to support drop-and-hook arrangements, and to make the best use of an increasingly scarce component: the truck driver. Renting and leasing can help you build your pool quickly and scale back quickly when you need to.
The pandemic has made detention time a make-or-break element of your business. Trailer tracking helps you keep your drivers and equipment moving and minimize detention time (or get compensated for it with data from your tracking system backing your claim). It’s pretty easy to find trailers with telematics, and even cargo sensors, to lease and you may find it a lot quicker than buying trailers or retrofitting your existing equipment.
If you want to keep a late model fleet with up-to-date technology, you have to keep buying. That can work fine when your customer’s demands are loud and frequent or if regulations remain consistent. Leasing can give you a quick way to get the latest equipment with the newest technology to stay compliant.
You were just awarded a three-year contract. If you buy trailers to meet your new customer’s needs, what will you do with those trailers three years from now? You don’t want to be out capital you could use to keep your business running.
Trailers age. Before you buy, you have to think about which specs, tires and aerodynamics will work best for you not only today, but also years from now. (The average useful life of a dry van is almost 15 years.) You’ll also have the burden of selling your older, less productive trailers. Not so when you rent or lease.
New customer contracts
Ownership can offer the lowest overall cost and highest cash flow due to the depreciation of the asset. However, ownership can provide a great burden when losing a customer contract and thus the revenue and cash flow it provided. Leasing some portion of your fleet gives you the flexibility you need to weather these bumps in the road.
Upgrading your fleet
In case you have not researched the price of a new trailer recently, they are getting very expensive. Leasing new trailers allows you to upgrade your fleet and your image with your customers. As trailers age, keeping the reliability high when servicing your customer becomes a bigger issue. Reach out to your Local Branch and lease a new trailer today!
When you lease a trailer, our costs are reduced and we pass these savings onto you. Contact your Local Branch to see how much money you can save on a semi-trailer lease today!
