Tank-trailer leasing companies say they have enough capital, despite tighter bank lending criteria under federal rules
Apr 1, 2010 12:00 PM, By Rick Weber
Buchanan says American Tank Leasing's main focus is the tank trailer user end of the business, whether it's a trucking company with equipment needs or a chemical plant looking for storage alternatives. But because American Tank Leasing is not quite as big as its competitors, it is able to be more flexible with the customer.
“We offer both long- and short-term leasing and can do it at a very competitive rate because we don't have all of the overhead a larger company has,” he says. “Our customers know when they call us they are going to get straight answers and the assistance they need to meet their tank trailer needs.”
Buchanan adds that customers are more likely to lease due to the fact that they are unwilling to commit to long-term contracts.
“The volatility of the economy has made many companies more conscious of carrying long-term debt,” he says. “There is a lot of inventory available in the industry, but if it isn't the right type of equipment, customers will turn to us to meet their needs.
“Since the beginning of the year, we have seen an increase in requests for equipment used in the specialty chemical market. The standard DOT407 tank trailer demand has still not come back from its height 14 months ago, but DOT412 and lined tank trailer demand is picking up.”
He says the year started out slow — at around 80% utilization — but February and the beginning of March have been good, taking utilization to around 90%.
“Although it has been a lot of short-term leasing, every lease counts, which is where we separate ourselves from our competitors,” he said. “We are willing to service the customer in every way possible. Whether it be short term or long term, we can accommodate their needs.”
Jim Rogers, Matlack Leasing Inc, says a high percentage of the DOT407 standard 7,000-gallon trailers has remained in service with lease customers.
“Specialized equipment has certainly stayed out,” he said. “When you get specialized trailers, sometimes that's a longer term lease in nature. Business has been soft across the whole industry for 18-24 months. Customers are leasing because new equipment is getting more expensive. A lot of carriers are not sure how long they're going to keep a piece of business they are awarded from a shipper and a bit reluctant to make a commitment to buy a $50,000 to $60,000 trailer. They're not sure they will have it for a long enough period of time.”
He says inventory is good.
“We always keep an ample supply of new and existing tanks on the ground, so we're in good shape right now,” he says. “We're on a regular purchasing plan of new equipment, so we always have new equipment at the factory.
“We're upbeat on the industry. We continue to purchase trailers. We have some being built for us now. We're hoping the economy turns around and our customers will allow us to grow with them.”
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