Want to see a real-world example of how heavy rental demand can affect a business?
During the just-ended 2015 holidays, a curious string of news stories appeared from Florida to the Pacific Northwest. Turns out that people were calling local police departments and reporting that uniformed UPS and FedEx drivers were delivering packages in moving trucks, nondescript vans, and other unbranded vehicles.
UPS and FedEx were simply doing business as usual, as was the United States Postal Service. How? They were all supplementing peak-season fleets by snapping up light-duty rental trucks to ensure holiday deliveries. The whole episode humorously illustrates a serious point: even logistics giants like UPS, FedEx, and the USPS can underestimate well-known demand spikes and have to scramble for rental trucks at the last minute.
What’s the lesson here?
Large fleets and small to medium-sized businesses can avoid the stressful search for delivery capacity with a little foresight and planning. The New Year for light-duty truck demand generally kicks off with Valentine’s Day, so that’s a logical place to start.
Using last year as a barometer, some assumptions can be made about Valentine’s Day 2016 trucking demand. In 2015, Americans spent nearly $20 billion on cupid-inspired gifts. Along with cards and chocolates, fresh flowers represent the biggest chuck of that spend. This year, roughly 70% of adult males are expected to buy and send flowers.
The economy has improved gradually over the past 12 months, leading experts in the retail sector to predict more spending – and more deliveries – this February. That will translate to higher demand (and shorter supply) of light-duty reefer trucks and city vans to spread the love. And while capacity is seen as stabilizing after a tight year in 2015, astute fleet managers don’t plan to get caught without vehicles at crunch time.
According to DAT Solutions, the electronic freight posting service, 2016 should be a strong year for van freight in general. As a result, vehicle shortages will be a factor in some markets.
In OverDriveOnline’s recent Spot Market Update for van, flat, and reefer trucks, DAT’s Ken Harper said, “The old year exited and the new year entered on a pretty good note across the board.” Despite some bloated retail inventories and weather-related disruptions in late January, Harper told OverDriveOnline he believes that “…2016 is going to be good to commercial trucking fleets and owner-operators.”
That’s good news. It also demonstrates that people who monitor big data in the trucking industry see plenty of demand on the horizon – especially for light-duty vehicles.
Through late winter and spring 2016, major rental fleets are expecting heavy demand for light-duty vehicles, including:
- Fuel-efficient city vans spec’d for a variety of cargo types,
- Maneuverable box trucks and reefer trucks
- Straight trucks with higher load capacities
As online ordering and e-commerce continues to expand, fleets should be making rental plans earlier to beat the rush for this specialized equipment.
Planning well and reserving early are part of rental as a business strategy. Responsive operations understand that renting is a cost-effective way to expand fleet capacity with little to no risk, or long-term commitment. This conserves precious capital, improves efficiency by limiting downtime and maintenance costs, and takes advantage of large-scale transportation resources that many companies don’t have access to.
Keep this in mind as well: Valentine’s Day is a reminder to many trucking operations nationwide that spring farm produce season is right around the corner. That’s when the availability of trucks (and drivers) gets too slim for comfort. It’s another reason to reserve intelligently – and early – to have the right vehicles exactly when you need them.