{"id":1135,"date":"2015-06-04T11:56:44","date_gmt":"2015-06-04T15:56:44","guid":{"rendered":"http:\/\/transcourt.com\/?p=1135"},"modified":"2025-05-14T13:34:37","modified_gmt":"2025-05-14T17:34:37","slug":"easy-to-get-but-hard-to-find","status":"publish","type":"post","link":"https:\/\/transcourt.com\/fr\/2015\/06\/easy-to-get-but-hard-to-find\/","title":{"rendered":"Easy to Get, but Hard to Find"},"content":{"rendered":"

\"Acr45628197227393614476.tmp.pdf\"<\/p>\n

High U.S. exchange rates coupled with stratospheric demand are keeping trailers on the leased side of the ledger.<\/h4>\n

An article posted in Today’s Trucking, June issue:<\/strong>
\nBY JIM PARK<\/p>\n

The day my ship came in I was at\u00a0the airport. How many times have\u00a0you heard that one from a trucker?\u00a0When it comes to the acquisition\u00a0and procurement of trailers, a look back\u00a0over the past seven or eight years tells a\u00a0similar story.<\/p>\n

Today\u2019s trailer market, especially dry\u00a0van and refrigerated trailers, is as tight\u00a0as it has been in recent memory. During\u00a0the last half of 2014, many fleets came to\u00a0the conclusion the recovery from the 2008\u00a0recession had finally taken hold and the\u00a0economy was moving forward with some\u00a0certainty. Consequently, they started getting serious about ordering trailers; not\u00a0just to replace aging equipment, but new\u00a0stuff with which to grab a share of the\u00a0burgeoning demand for freight service.<\/p>\n

By the end of the year and on into the\u00a0first quarter of 2015, trailer builders\u2019 order\u00a0boards jammed up. Now nearly every\u00a0build slot is taken for the near term, which\u00a0basically means for the remainder of this\u00a0year. It\u2019s a good time to be in the dry van or\u00a0reefer business. It\u2019s not such a good time\u00a0to be in the market for new equipment.<\/p>\n

Across the country, the supply of and\u00a0demand for trailers varies, as do market\u00a0conditions. We are a nation of regions,
\nafter all.<\/p>\n

\u201cOntario and Quebec are more reliant\u00a0on the retail sectors and are very strong\u00a0in the dry van market,\u201d says Mississauga,\u00a0Ont.-based Anne McKee, executive vice\u00a0president of Trailer Wizards. \u201cOnce you\u00a0get into Atlantic Canada you deal a lot\u00a0more in reefers, especially now as the fish-
\nery and vegetable seasons start to heat up.<\/p>\n

\u201cAs you know the price of oil has taken\u00a0a bit of a dive, so in the prairie region\u00a0where we had very strong demand for\u00a0decks and specialty equipment\u2014especially in the northern part of the prairie\u00a0region\u2014we are seeing a real slow down,\u201d\u00a0she says. \u201cOther parts of the prairie region\u00a0are strong right now because of agriculture. \u00a0The British Columbia market is very\u00a0strong, I mean the port situation is always
\nthe wild card in the mix, but it remains\u00a0strong as well.\u201d<\/p>\n

While overall demand for equipment\u00a0remains on the strong side, the weakening\u00a0dollar has crimped our appetite for buying. So much so that many fleets are now\u00a0turning to leasing to mitigate the effects of\u00a0the exchange rate.<\/p>\n

\u201cOur dollar is low compared to the\u00a0American dollar, and that is impacting\u00a0trailer purchases,\u201d McKee points out.\u00a0\u201cAlso, the large fleets in the U.S. have\u00a0taken up almost all of the dry van build\u00a0spaces right out to January [2016]. Almost\u00a0every manufacturer is booked until at\u00a0least September or October for reefer\u00a0builds. That combined with the dollar\u00a0issue makes for an expensive trailer and\u00a0that means more people are turning to\u00a0renting and leasing.\u201d<\/p>\n

\"Acr45628197227393614476.tmp.pdf\"<\/a><\/p>\n

Lease vs Purchase<\/h4>\n

Canadian dealers and their customers had\u00a0it good for a while when the two currencies were at or close to par. But the fly\u00a0in the ointment then was the credit crisis. The only customers the banks would\u00a0touch were those that were already flush.\u00a0Anyone considered even the slightest risk\u00a0was pretty well out of luck. Credit crisis\u00a0notwithstanding, the economy was in the\u00a0tank then and fleets were only buying to\u00a0replace aging equipment. There was much\u00a0new gear coming into circulation.<\/p>\n

Now that the economy is firing on all\u00a0cylinders, we have the exchange rate to\u00a0contend with again. The 20% premium can\u00a0add $5,000 or more to the price of a trailer.<\/p>\n

\u201cA reefer trailer that used to cost $60K\u00a0is now $65K or $70K Canadian so there\u00a0is a bit of a difference,\u201d says Joe Ricci,\u00a0director of origination, Maxium Financial\u00a0Services. \u201cBusiness isn\u2019t really suffering\u00a0because of it, it\u2019s only another $100 a\u00a0month or so on a five-year deal.\u201d<\/p>\n

Still, the differential can put additional\u00a0load on the cash flow. Leasing can work\u00a0for customers seeking to hang on to their\u00a0cash for other purposes. The tax load on a\u00a0purchase is high at the beginning, whereas\u00a0with a lease, the tax payments are spread\u00a0out over the term of the lease. And leasing\u00a0is a nice way to go when you\u2019re worried\u00a0about the maintenance side of things.<\/p>\n

\u201cThe technician shortage is impacting\u00a0fleets all over the country,\u201d says McKee.\u00a0\u201cA full maintenance lease is a good option\u00a0for fleets that don\u2019t have their own shop\u00a0facilities or can\u2019t find good technicians.\u00a0There are a number of reasons for going\u00a0to full service, but I would say at least 95%\u00a0of our customers are doing it that way.\u201d<\/p>\n

That\u2019s another way to stabilize costs\u00a0and cash flow. The full-service lease cost\u00a0will be higher, but it\u2019s also predictable.\u00a0McKee says it\u2019s in her company\u2019s best\u00a0interest to keep the equipment well maintained so that it retains its value for resale\u00a0at the end of the lease.<\/p>\n

Leasing is also a great way to get over\u00a0humps in the business model, like during\u00a0surges in volume,\u00a0or when a customer makes a specific\u00a0request you can\u2019t easily accommodate. This\u00a0isn\u2019t often an issue in\u00a0vans and reefers, but\u00a0when you get into\u00a0speciality equipment\u00a0like tank trailers it\u2019s a\u00a0different story.<\/p>\n

Because of their\u00a0high capital cost, you\u00a0don\u2019t flip tank trailers\u00a0around like vans. Often the trailer is customized to the commodity. So, companies\u00a0like Transcourt Tank Leasing can fill the\u00a0gap on a short term basis, making available equipment that might take months to\u00a0order or providing equipment on a short\u00a0term basis to help manage peak periods.<\/p>\n

\u201cSome fleets prefer to lease out right, it\u00a0just depends on the business model,\u201d says\u00a0Transcourt\u2019s co-founder and president,\u00a0Bruce Daccord. \u201cLeasing helps keep the\u00a0costs stable and they still make money on\u00a0the spread between the payment and the\u00a0revenue as opposed to treating the equipment as an asset.\u201d<\/p>\n

On the purchase side companies like\u00a0Bibby Financial Services can tailor loans\u00a0for smaller customers who have the revenue but might be struggling with cash\u00a0flow. Mary Ann Hudson, executive vice\u00a0president of Bibby Financial, says the\u00a0company specializes in customizing the\u00a0loans to suit the customer\u2019s situation.<\/p>\n

\u201cTerms could be anywhere from 90\u00a0days to 6 months,\u201d she says. \u201cWe work out\u00a0all kinds of exceptions based on their cash\u00a0flow. Of course we don\u2019t ever want to put\u00a0them in a situation where they can\u2019t pay it\u00a0back in a reasonable amount of time, but\u00a0we also want them to pay it off where it\u00a0doesn\u2019t hurt their cash flow.\u201d<\/p>\n

While it\u2019s great to have financial alternatives for equipment procurement, it\u00a0would be nice to have some equipment to\u00a0procure. Analysts say it will take most of\u00a02015 to get the order backlogs behind us.\u00a0Even with the current strength of the\u00a0economy, fleets won\u2019t continue investing\u00a0in additional capacity of it means once\u00a0again flooding the market. They have now\u00a0tasted the fruits of a tight freight market,\u00a0and many would be happier if it stayed\u00a0that way. It seems today money is easier to\u00a0get than equipment.<\/p>\n","protected":false},"excerpt":{"rendered":"

High U.S. exchange rates coupled with stratospheric demand are keeping trailers on the leased side of the ledger. An article posted in Today’s Trucking,…<\/p>\n","protected":false},"author":18,"featured_media":1136,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-1135","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"\nEasy to Get, but Hard to Find - Transcourt Inc.<\/title>\n<meta name=\"description\" content=\"Easy to Get, but Hard to Find - Notre mission est d'offrir la meilleure exp\u00e9rience de vente, de location et de financement de remorques-citernes de l'industrie.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/transcourt.com\/fr\/2015\/06\/easy-to-get-but-hard-to-find\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Easy to Get, but Hard to Find - 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