Commercial Vehicle Hire & Rental – ‘It’s all about flexibility’

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In today’s uncertain business environment, the flexibility offered by commercial vehicle hire and contract rental can provide a trouble free and instant method of acquiring vehicles needed to meet changing customer demands – yet some are hesitant to engage. Fleet Transport’s Paul White reports on the offerings from the main providers and how new trends are transforming the sector.

As a leading name in the vehicle hire business, Commercial Fleet has always had a pragmatic sense of the current state of the market. Frank Norton at Commercial Fleet takes a wide view of the industry’s current issues, and believes that at the moment nothing positive or negative can be attributed to any one factor.

Frank, like others finds business brisk in the heavy and lighter segments, which could highlight the driver shortage being experienced by many distribution companies that is directing them into sub 3.5 tonne GVW vans. He also commented that many other operators are being quite cautious and finds that while many deals and quotations are agreed in principle, some operators are holding on before finally signing. This would of course be dependent on the type of work the operator is engaged in, and related to the factors that affect that operator’s business. Here, Commercial Fleet’s experience can help create suitable solutions for their customers.

North Gate VanAt Northgate Vehicle Hire, a number of solutions are offered, especially in the lighter segments. Valentine Onukwili explained that for people working in the demanding delivery business, Northgate can provide a range of flexible options under their ‘Vanonomics’ banner. This flexibility can allow operators to contract for 12 to 36 months and return the vehicle earlier without penalty if the work dries up.

Northgate can also deal directly with manufacturers on the client’s behalf when specifying vehicles and thereby benefit from the company’s buying power. Northgate’s flexible Vanonomics policy could prove to be a winner as demand for large volume panel vans is expected to steadily increase, mirroring the increase in online shopping – and not forgetting the reverse logistics of vast numbers of product returns.

Online shopping is certainly delivering an amount of buoyancy to the demand for vans, and buoyancy is a word used by Colin O’Brien of Go Rentals, Naas. As with many of the hire companies spoken with, Go Rentals is kept very busy. The company is trading since 1968 and its solid client list is drawn from the many businesses, both private customers and State and semi-State companies in the general Leinster region. It provides all manner of lighter vehicles on short or long term rental or lease basis.Walkers

The issue of insurance for people hiring vehicles has often presented difficulties on both sides of the equation. However, Go Rentals has managed to turn this into a positive selling point. The company can provide insurance in an easy and simplified manner ensuring its customers get on the road as quickly as possible. This is highly attractive for customers who may need commercial insurance for a short time, or it is their first time being quoted for a premium which can be a difficulty for many start-up companies.

PC Commercials of Baldoyle, Dublin is a well-known vehicle sales, recovery and repair centre. PC’s Mark Donnelly stated that the company is currently busy with van hire, though this is mainly in the spot hire segment. This is a bonus as PC Commercials hire a mixed fleet of vans and trucks with 90% of hires being towards the heavy rigid truck end of the market. It is interesting that Mark has noticed an increase in the number of enquiries about electric vehicles, and would describe the queries as becoming more serious about zero emission technology.

EnterpriseMark points to some of the advantages contract hire can bring, especially the outsourcing of so many different and problematic aspects of running commercial vehicles. All of which is of particular importance for the small business operator. From road tax and maintenance to compliance and avoiding an unexpected major component failure, that can throw a monthly budget out the window. This of course does not mention the thorny issue of residual values. In the vehicle hire world, the hirer takes the profit or the loss on the residual value and it’s all part of the deal.

The current shortage of skilled workers, be they drivers or technicians was commented on by National Truck Rental’s Tony Morgan, who feels this drought is reflected in an increase in demand for van and tractor unit hires. Such demand could indicate that the standard distribution rigid is not as popular as previously, possibly due to a shortage of licence holders to drive them.

The business has also changed and one key features enticing operators to consider contract rental is the peace of mind it brings, especially with regard to compliance “There is a lot more to do that just getting in and driving, he said, adding that there is now a realisation that there is no point in not adhering to the rules and its good for everyone.

Interestingly, Tony mentioned another factor moving some to contract hire. It is where operators have had bad experiences with newer trucks, especially with modern software and AdBlue dosing systems. Because of the high cost of repairs to these systems, some operators who have had problems are now opting to go the hire route. This makes anything that goes wrong, ‘someone else’s’ problem.

Fleet Plan

As with some others in the business, Tony has seen an increased level of enquires for electric vehicles, especially vans, though there remain some serious concerns about the range capabilities and the supporting infrastructure. In reality, “the vans are just not there yet,” he said.

John Seaman of Cork Rent-A-Van would agree that at the moment, electric drivetrain technology is just not there as yet and feels there are a number of issues that make customers nervous about electric. One being the range and the other, the infrastructure, and while the charging points for the electric passenger car is an important issue, it is a critical issue in a commercial activity. Having drivers parked up for extended periods of the working day waiting for a van to charge could not be described as a productive use of time, in a market segment where both the margins, and delivery times are tight.

While John is aware that demand for vans is high across the board, he noted some interesting changes where customers are becoming quite selective about the specifications of the vans hired. He gave an example where “a customer might specify a front wheel drive to ensure they get a lower loading floor at the back, or sliding doors on both sides, as opposed to one”.

Walker Vehicle Rental is one of the most recognised names in commercial vehicle hire in Ireland. Walker has a wealth of knowledge and experience about the business and finding the correct vehicles for customers is its forte. Walker’s Sales Director Fran Cunningham agrees with the majority of people spoken to regarding electric vehicles. “Not there yet, but in the category of 3.5 tonne and below we would anticipate electric vehicles playing a major part in the next 3 to 5 years. One reason that it is not successful at the moment is that the technology it too expensive. Rental as a business model depends on a standard product range and if someone is renting a vehicle they need certainty in the battery life, charging facilities the infrastructure and technology,” he said.

“With uncertainty in the economy with issues such as Brexit, rising fuel and labor costs, fleet rental and contract hire remains the solution for many businesses as the flexibility provides a degree of comfort. In saying this, there are a large number of other companies where through our MAN and FUSO dealership in Cork we have noticed a strong demand in our 3.5 tonne upward range through to the full range of trucks sold rather than rented,” added Fran. It is in this sector that Fran expects the new MAN TGE light commercial range that includes panel van and chassis cab versions to excel for Walkers.

Fleet Plan Hire provides many of Ireland’s largest truck operators with the full range of contract vehicles, bodies and services. Company MD Jarlath Kelly has noticed an increase in the level of interest in alternative fuels, for both natural gas and electric powered commercials. “In the light weight categories up to 3.5 and even 5 tonne models there is a move to electric,” he said. Although again while the enquiries are strong people still remain hesitant when it comes to taking the jump as electric vehicles remain expensive.

This is where Fleet Plan Hire can help, though as Jarlath pointed out, the financing model is different because of the high initial price, and the, as yet, unknown residual value of a three to five year old electric van at the end of the term.

While these issues have yet to be resolved, as has a national network of natural gas refuelling stations, Jarlath said there is a high level of interest from operators in CNG powered trucks, especially at the upper weight categories. Many would invest tomorrow, but they are conscious about the lack of filling station infrastructure which has been promised – but not delivered to date.

There is of course one other option that falls between renting and buying. That option that was introduced to customers by Hireco Trailers just over two years ago, which is rental purchase. Through this method the operator pays rent as per the agreement, but owns the piece of equipment at the end of the set term. The company is growing the number of services it offers to customers which includes full service and bodywork repairs, secure truck parking and of course trailer hire. Hireco’s Sales Manager Lorna Phipps commented that “operators just don’t want the hassle of looking after equipment, especially the bigger companies”. This of course delivers benefits in overheads with workshops and ensures compliance with roadworthiness regulations.

Judging by Hireco’s addition of 5,000 trailers to the fleet over the past eighteen months, things are looking up. These new trailers are not the only investment made by Hireco, as the company, so long a feature of Dublin’s East Wall, will soon relocate to a new premises in Naas, County Kildare.

What does the future look like? George O’Connor, Managing Director, Enterprise Rent-A-Car Ireland (pictured right) forecasts that new technologies will continue to transform the way consumers access mobility, and businesses will need to think differently and modify their approach in order to continuously meet the evolving needs of their customers.

“Our Car Club offering, which was recently introduced in Ireland and is also available in the USA and UK, illustrates how a flexible, easy-to-use transport solution can bring cost savings and environmental benefits to companies and public entities. This is achieved through the provision bespoke IT system that allows customers 24-hour, on-demand access to vehicles through an app on their smartphone or tablet.”

“We are experiencing growth across all lines of our business as we partner and consult with B2B customers to take away the challenges of fleet and mobility decisions to allow them to focus on growing their business, all while relying on a mobility provider that has a tailored a suite of solutions