Truck users look to short term rentals
Published: 20 July 2012 - Heather Ramsden
To cope with seasonal supply chain throughput spikes, companies have always looked to supplement their lift truck fleets by drafting in extra vehicles on short term rental contracts.
But, with more and more businesses seeking to meet their materials handling needs without making a long term financial commitment, the UK market for short term rental trucks is growing significantly.
In fact, according to statistics recently issued by international market research company, RedShift, some 10 per cent of the forklift trucks currently operating across Europe have been supplied on a short term rental contract.
Neil Warren, Jungheinrich UK Ltd's Used Equipment and Short Term Rental Director, believes that the growth in the market for short term truck rental represents a trend among truck users and may soon rival long term contract rental and outright truck purchase as a user’s preferred method of truck acquisition.
“The upturn in the number of trucks entering the market on short term deals is being driven in part by the harsh economic situation,” he says.
“But, paradoxically, as the economy emerges from the doldrums, I believe more businesses will be tempted by short term rental options to acquire the materials handling equipment needed to manage new contracts or cope with increased supply chain throughput.”
While short term contracts have traditionally been perceived as being more expensive than more traditional truck acquisition methods, there is a strong economic and strategic business case for taking the short term option, as Neil Warren explains.
“Whereas, traditionally lift truck dealers have viewed rental fleets as emergency cover to replace malfunctioning trucks that cannot be repaired quickly or as a quick fix solution for established customers who need to cope with seasonal peaks, many lift truck users now see short term forklift rental as something more strategic – rather than a stop-gap measure. As a result, short term rental has become part of the business model for many truck users, ” says Neil Warren.
He continues: “A growing part of our business is from minimal term contracts – which give excellent pricing options and provide full flexibility. When compared to standard fixed term rental contracts of, say, five years, they represent excellent value for money. In particular, we have seen a notable uptake in this type of contract in the manufacturing sector – where, thanks to volatile economy, flexibility is key.
“Our event handling business is growing rapidly too. Last year, for example, we supplied a number of standard trucks alongside rough terrain telehandlers for a UEFA Champions League soccer event in London’s Hyde Park. We have taken bookings for many prestigious events which are taking place over the course of 2012.
To cope with the upturn in demand for short term rental trucks, Jungheinrich has invested over £5 million in its short term rental fleet over the past 12 months.
The company’s UK fleet is now in excess of 2000 units and includes models from Jungheinrich’s full range of warehouse and counterbalanced trucks as well as rough terrain vehicles supplied by Manitou. Trucks are available for next day delivery anywhere in the UK and are supplied and maintained from one of Jungheinrich’s six regional rental locations.
While the average age of the trucks within the Jungheinrich fleet is just two and half years, Neil Warren cautions that many of the trucks supplied as short term hire machines by some suppliers lack quality due to their age profile.
“Some short term hire fleets are made-up of ex-contract hire trucks that simply aren’t as reliable as they should be. The short term rental market is a little like the holiday car hire market and, if you deal with the wrong supplier, you can end up with the forklift equivalent of a ten year old banger with bare tyres and dodgy brakes!”
Companies hiring trucks through Jungheinrich have the peace of mind that comes with the knowledge that their short term rental forklift is a state of the art machine that has been maintained to the highest standards.
“We have a young fleet and, if anything does go wrong, our 500 nationwide service engineers are there to ensure that downtime is minimal,” says Neil Warren.