In Perth, PowerTorque spoke to Andrew McAdam who is the Perth Branch Manager for the TR Group, about the drift towards leasing. TR Group specialise in all forms of truck and trailer rental and leasing.
The drift towards leasing is growing and some in the industry are starting to talk about moving towards a truck as a service, rather than a truck as a cost centre. This may be a generational thing, where younger people are not quite so tied to the ownership model.
People in the industry seem to be a bit more open to different economic models, whether it’s a combination of owning certain things, and hiring or leasing others,
“This is something we’ve come across with with some clients, where they will want to own specific types of asset and they are more than happy to lease or rent other things, that complement their core fleet,” says Andrew.
“The key thing in any proposal like that, is the commercial aspect to it. Does it make sense commercially for us to go down this path? You’ve got an asset that you own, if you own a truck, but it’s a depreciating asset.
“You’re then going to look after it, services, maintain it, and then you’ve got to actually have people dedicated to doing that, well. We can take all of that off your plate and deal with all of the fuss and the pain, all you get is a late model, reliable, tailor made bit of equipment.
“The big difference in the TR Group model is the service and backup. That’s actually a huge change for us here, to go from a small outpost on the on the far west coast of WA, to now be part of this big group, which is multinational as well. The fact that we’ve now got access to a team supporting us from Melbourne, people that can help us with maintenance, finance and fleet planning. We’ve got lots of firepower, financially, in the group as well.”
That sort of firepower behind an operation is helpful, particularly in a market where equipment is hard to access for smaller operators.
“We’re moving away from the super-short-term stuff,” says Andrew.
“We are moving away from that to focus more on the longer term work. We try not to just turn things down, but we’ve got to make a commercial decision about the longevity of the hire and whether it’s worth us doing that job.
“We’re now starting to evolve the leasing side of the business. So in New Zealand, my understanding is that it’s about 80 per cent lease 20 per cent rental, but in Australia, it’s the opposite.
“Leasing actually builds much longer term relationships with the client, because you’re working over two years, three years, four years, five years, seven plus, life of asset. So you’re really building a long term relationship with that.”