GE Capital Sells Last 27,000 U.S. Trailers from TIP Fleet to Trio of Companies
This story appears in the July 16 print edition of Transport Topics.
Investor Wood Creek Capital Management, along with Bowman Sales and Equipment Inc. and Milestone Trailer Leasing, last week bought 27,000 U.S.-based trailers from GE Capital, continuing the transformation of the highway leasing market.
Terms of the sale announced on July 10 were not disclosed.
The units that were sold were the last remaining part of the fleet known as TIP, or Transport International Pool, that once numbered 135,000 pieces of equipment. GE Capital, a unit of General Electric Co., began to distance itself from the trailer leasing market with a 2010 sale of equipment to Prime Trailer Leasing, Denver.
For Bowman and Milestone, the acquisition announced on June 10 represents its latest expansion.
Both companies, along with McKinney Trailer Rentals, Pico Rivera, Calif., acquired a total of 5,700 trailers earlier this year that Aurora Trailer Leasing & Rental LLC previously owned (5-14, p. 5).
“Bowman has been very fortunate to be able to continue to take advantage of the trailer leasing market consolidation that has taken place in the U.S. in the last few years,” Dennis Hamill, president of Bowman Trailer Leasing, said in a statement. “We are totally committed to continuing to provide our customers with the best equipment and service available in the industry.”
GE Capital spokesman Ned Reynolds didn’t respond to requests for comment when asked why GE decided to sell the trailers. GE Capital still has a European trailer leasing business known as TIP Trailer Services.
Wood Creek, New Haven, Conn., is a subsidiary of insurer Mass-Mutual Financial Group.
Wood Creek owns the majority of the equipment, said Tom Juterbock, managing director, with the balance owned by the other buyers. He didn’t provide a specific breakdown of ownership.
The 27,000 trailers, which currently are on lease, will be managed by two entities — the Trailer Leasing Alliance, or TLA, composed of Bowman and Milestone and Quest Capital Group.
Quest currently manages other Wood Creek freight assets, including 11,000 domestic intermodal containers and a smaller number of chassis. Wood Creek holds a minority interest in Quest.
Wood Creek is investing funds from its global customers, including pension funds, insurers and other institutions, with the intent of earning returns that exceed bonds and other investments, CEO Brett Hellerman said.
More changes could be in the works in addition to the Aurora equipment and the sale of National Semi-Trailer Corp. to Premier Trailer Leasing (4-30, p. 27).
“We are going to continue to build out in the ground transportation area,” said Hellerman, with a focus on buying highway as well as rail and intermodal assets.
Juterbock said the former TIP trailers are an attractive investment because the total U.S. trailer fleet has shrunk since 2008, resulting in higher utilization and more revenue from the equipment that still is on the road.
He said the trailers that were purchased average three to four years old and are in excellent condition.
“We are bringing institutional capital to markets on very specific investments,” Juterbock said. “We have a unique equipment management solution.”
TLA is hiring former executives from GE Capital to provide continuity and expertise in managing the equipment. Juterbock said.
Bowman Trailer Leasing, a unit of D.M. Bowman Inc., Hagerstown, Md., runs a fleet of more than 30,000 trailers.
“This acquisition and the formation of TLA will provide cost-effective rental and lease alternatives to our customers throughout the United States,” said Robert Thull, president of Milestone, Tiburon, Calif.
Milestone’s lease fleet includes more than 18,000 highway units.
