Is the trailer leasing business recession-proof?
Not quite, “but this is almost the case,” said Michael J. Phelan, vice president of Associated Rental Systems.
In an economic downturn, he said, companies that do not want the burden of large, new expenditures will turn to leasing trailers to save money.
“When demand for trailers is high, backlogs are up, and companies who need trailers to do business will use our trailers on a short-term lease — perhaps six to 12 months,” Phelan said.
“I don’t know if I’d go so far as to call it recession-proof,” said Jay Mudrick, director of financial programs for Transport International Pool, one of the biggest leasing companies in the United States, with more than 150 locations. But, he said “the leasing piece [as opposed to short-term rentals] is reasonably well-insulated.”
Whether it is recession-proof or just well-insulated, the trailer leasing business has been growing along with truck leasing, which now accounts for about 38% of total sales.
Rentals — typically shorter in term — are mainly used to cover peak service demands, Mudrick said.
For the full story, see the April 26 print edition of Transport Topics. Subscribe today.
