By working to meet customers’ needs throughout the year, van rental firms manage to avoid the post-Christmas blues, James Dallas reports
The online shopping frenzy induced by ‘Black Friday’, which fell on 27 November last year, when retailers discount goods en masse, followed by the more traditional seasonal spending spree over the Christmas period, is a busy time for van rental firms.
The British Vehicle Rental and Leasing Association (BVRLA), which represents hirers such as Enterprise, Eurohire, Prohire, Hertz and MC Rental and has a total of 780 members, claims the £1bn shopping bonanza that runs from the end of November until the end of December puts 15% more LCV traffic on the UK’s roads.
A spokesman for the trade association says: “Rental allows people to flex the number of vehicles on their fleets depending on demand.”
But aside from seasonal peaks, there is underlying growth in the van leasing and rental sector.
The spokesman says its members’ short term van rental fleet increased by 10% in 2015 year-on-year from 139,235 to 154,480 – outstripping the 3% rise in the equivalent car fleet.
Over its whole LCV fleet, which also covers contract hire, fleet management, finance lease, contract purchase and personal contract vans, the total number grew 9% from 631,208 to 689,508 vehicles.
The BVRLA claims the big driver for the growth in LCV fleets is that operators are downsizing from trucks to vans, which, unlike the larger load luggers, are not subject to drivers’ hours restrictions, do not require the driver to hold an ‘O’ licence, do not have to be fitted with a tachograph and can travel more freely in the London Low Emission Zone.
“There are fewer hoops to jump through,” the spokesman says.
Gareth Jones, managing director of Dawasonrentals/Vans, says the business works on developing customer relationships over a wide range of industry sectors and so is not dependent upon peaks and troughs in demand.
He says Christmas 2015 “wasn’t the busiest period ever” but admits it was “fairly intense”.
However, Jones acknowledges the influence of internet retailing on trading patterns within the van rental sector.
“The rise of dotcom shopping has resulted in the busier periods peaking earlier and ending later, therefore in 2015 (as with 2014) we saw a steady ramp up through the final quarter of the year that continued well into the following Q1.”
But Jones claims Dawsons rejected the chance to take on new short-term business over the festive period in order to maintain the integrity of its existing customer relationships.
“We took a strategic view to only partner with those that worked with us throughout the year, so we rejected more than we took. This is because, for us, it was important to stand alongside our partners and we made sure we did this first and foremost before entertaining new opportunities.”
Jones claims this policy means Dawsons avoids a slowdown in the traditionally quiet month of January but continues to operate at 91-92% utilization.
“We have seen no evidence of this [a slowdown in trade] at the beginning of 2016,” he says.
Nevertheless, seasonality does affect the type of models customers want.
“In Q4 there will always be a leaning towards larger panel van-based products to meet the needs of distribution and home delivery businesses,” Jones says.
But overall Dawsons eschews pandering to seasonal demand in order to foster a stable customer base.
“Your customers are with you 52 weeks a year so its important their demands are met first,” Jones maintains.
Northgate Vehicle Hire emphasises the importance of anticipating the seasonal demands of its customers. Head of marketing Jonathan Pearce explains: “As a long term LCV rental provider and fleet partner we work with customers throughout the year to put plans in place to support them through busy periods like Christmas where demands from their customers increase significantly, resulting in greater vehicle needs.”
Pearce claims operators are turning to long-term rental deals in preference to purchasing vans. “Rental is seen as a more efficient way to run an LCV due to the benefits of inclusive servicing, maintenance and breakdown support as well as the ability to flex the number and type of vehicles, in line with trading patterns, at any time without penalty.”
By offering flexible rental, Pearce says Northgate allows customers to return vans in quiet periods to avoid costly downtime and then re-hire when they bet busy again.
Pearce insists Northgate experiences no tail-off in demand once the festive season ends. “The start of the year is very busy for us as customers get back to work and take their vehicle back which they may have off-hired for the Christmas break. Many businesses also look to renew their fleets at the start of the year, so we see a large spike in enquiries from new customers.”
Like Dawsonrentals/Vans’ Jones, Pearce says panel vans are most in demand over Christmas due to the high volume of home deliveries while in the spring and summer tippers and dropsides come to the fore as landscaping and groundworks firms step up business.