Getting Back To Leasing Basics

Companies need to do their homework before leasing trailers.


The trend towards leasing dry and refrigerated trailers continues to grow in the food and beverage industries. Leasing experts recommend that companies begin by doing some serious self-evaluation before signing any contract. The consensus is that a leasing company should work with its customer to determine what equipment they require to accomplish their goals.

"We try to uncover what the need is," says Scott Nelson, senior vice president of leasing solutions and business development for GE Trailer Fleet Services, Wayne, PA. "You go forward with a degree of certainty that you have a need for that equipment."

"Companies need to ask themselves what they require for equipment," says Rick Adams, president of PLM Trailer Leasing, a Montvale, NJ, provider of refrigerated trailer solutions. "If their business model hasn't changed, they may only need 53-foot reefers well into the future. But if they're in a logistics business where they go from multi-temps to single temps to dry vans-where it's a constant change-they need to look at how flexible a lease can be."

He says customers should consider what their equipment needs are today as well as the future. The leasing company they choose should provide a lease that will work with them to meet those changing needs.

"If the customer has a six-year lease and their needs change during that period, in most instances we're flexible enough to go in and swap out equipment," says Adams.

Equipment Concerns

Once a customer determines its needs, its should determine whether or not a leasing company can meet its requirements.

"They should look for an operator that has the type of equipment that is spec'd to operate as efficiently as possible," says Dale Frank, national sales manager, temperature controlled products for Xtra Lease, a St. Louis over-the-road trailer rental and leasing company. "One that not only has the reefer that's spec'd to help control air temperature and maximize efficiency, but also optimize airflow.

"We try to make sure that we do a thorough job upfront of consulting with people. We talk first about what they're going to put in the trailer, what temperature they're going to transport it at, how long it's going to be in that trailer and how long the shelf life should be on the other end."

Don't forget to factor backhauling into the equation. "Quite often a company from the Midwest might take beef to California and bring produce back," Frank explains. "We would want to know such information so we could set up the trailer the correct way for the specific characteristics of the commodity. Lettuce is a lot different than a load of beef."

He says that the failure to set a trailer up properly could cost a company a great deal of money in extra fuel and more maintenance for a refrigeration unit, as companies pay hourly maintenance fees for the operation of a reefer. "By being able to customize trailer operation to the commodity, you're going to ensure that commodity gets to its destination in good condition and the shelf life is better," says Frank.

Multi-temp trailers are gaining in popularity, according to Adriano Mallozo, vice president of industry sales, food and beverage, for Ryder System Inc., Miami. "Multi-temps divide trailers into two or three compartments-dry, refrigerated and frozen. So instead of sending separate dry and refrigerated trucks to a single stop, these companies are loading three compartments in one trailer and increasing their utilization because they're able to make one stop."

In addition to the multi-temp trailers, Ryder is also leasing out custom spec'd flat floor grocery trailers. Flat floors provide greater stability for the loading of pallets into a truck. Leasing companies should be able to step up and provide these and other custom trailers, such as ribbed floor trailers, which allow chilled air to circulate better within a trailer.

Customers should also ask if leasing companies have flex capacity. Are they prepared to meet increased demand for equipment during such peak periods for the food industry as the Fourth of July weekend?

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