Hireco director of contracts Michael Williams gives the lowdown on the company's new truck rental venture.
Hireco has been helping customers in need of reliable, low-hassle trailers since its inception in the 1970s. We recently made the move into truck rental. Extending its service offering to those in need of new commercial vehicles.
Given the success of the existing business, it's a natural move, but the firm isn't taking it lightly. Last year, it appointed industry veteran Michael Williams as director of contracts to head the truck operation. Who explains why he thought the time was right to dive into the truck rental side of things.
"The trailer business is very well run. It has 6,500 trailers with an average age of less than three years. It has a continuous, loyal customer base and exceptionally high utilisations," says Williams.
"There was an opportunity to develop the truck product, and the timing was right. From my perspective, this is a very good time for us to be pushing into the market. As we have new, modern products, and we're right up to spec on the latest Euro-6 models."
Williams says Hireco actually held back on offering the vehicles until we was totally happy that it could deliver on its usual high standards.
The company announced the move into trucks in September 2018 and, despite being a fledgling operation, the orders are already coming in thick and fast. Its intention is to "just do what we've done with trailers with trucks," according to Williams – which means absorbing all the difficult bits and making life as easy as possible for customers who were expressing interest before Hireco had even placed orders for its first vehicles.
So pivotal is the company's focus on its customers that Williams says it actually held back on offering the vehicles until it was totally happy that it could deliver on its usual high standards.
"If anything, we've been holding the cart back a little bit and saying 'hang on a minute, we've got to get our ducks in order.' It took us a couple of months before we could say 'OK, this is what we can offer – does this meet your expectations?'. So we're only just letting the brakes off."
The company spent the final quarter of 2018 and the first couple of months of this year gearing itself up to branch out. Williams says the endeavour was "a clean sheet of paper". When the business first announced its intentions in autumn, it spent the subsequent months structuring the operation. Also, settling on high quality suppliers and products, before the arrival of the first vehicles at the beginning of March.
As time moves on, we just push the buttons, which works well.
Williams details the inaugural line-up: "We've placed orders with Mercedes-Benz, MAN and IVECO. With MAN it's tractors, and we have a good arrangement, where we order a specific number of models, then we have a lead time where we can decide on the specification and whether we go for XL, XXL cab or whatever it happens to be. It's the same for the engines. We're ordering hundreds of vehicles, so we don't have to order the specific model immediately. As time moves on, we just push the buttons, which works well.
"The Mercedes are also tractor units and the IVECOs are 7.2 tonners. We have also ordered some 18-tonne rigids from MAN, to which we'll be fitting curtain-sided tailored bodies."
The initial batch of vehicles has already been allocated to keen customers, but the fleet is set to grow, as Williams expects it to reach a total of 750 in the second half of 2020. He also believes that young, low-mileage vehicles are the way forward.
"You can't expect customers to take old vehicles with high mileage. You've got to keep the fleet modernised, which will be our profile. We would not expect to be keeping vehicles beyond three years."
He doesn't think vehicle rental is rocket science, either. More than anything, it's about duplicating the company's approach to its existing business.
You have to form a good working relationship with your customers.
"If you find a formula that works, you stick to it. We're going to replicate that formula and extend what Hireco has already done successfully on the trailers… You have to form a good working relationship with your customers. You have to do a good job and at the same time, try to maintain competitive pricing."
He also believes that the majority of fleet operators are not simply chasing the cheapest deal, as the quality of the vehicles and the level of service is just as important to them as a reasonable, but realistic, price.
"In today's market, nobody wants to pay more than they have to; it would be wrong to say they did. But there is a recognition that you have to pay a fair price. Across the rental market now, rates are moving to a position that they should already be at – and the customers do understand and appreciate that.
"They're not just chasing the lowest price available; they want to know that they're getting the service that's going to give them the reliability and the low vehicle downtime they need. People want their vehicles looked after properly."
Hireco's truck rental arm is now very much open for business and, despite overwhelming early demand, Williams says the company is now shouting about its latest pursuit.
"We're now communicating that we're able to provide quotations for trucks. This is because it's not just a case of us ordering them, we want to try and match that to what the customers want as well. The demand is probably in excess of what we're able to supply at the moment. However, it's definitely looking very positive, and I'm sure that's the way it's going to continue."