In so many ways, 2019 has been a memorable and successful year for NationaLease. But as our customers and our members know, we’re always looking to the future for greater success for all.
Every year offers an opportunity to look back and assess the challenges, opportunities, and successes throughout that year. This year, we were honored to celebrate the 75th Anniversary of NationaLease, which was formed in Chicago in 1944 when the owners of 17 independent truck leasing companies met to combine their efforts and share ideas. And we’ve been going strong ever since.
A quick look back:
Diamond Anniversary – The 75th is considered the Diamond Anniversary and this past year has certainly been a gem. All of our meetings throughout the year were held in the city where it all started…Chicago. Our Annual Meeting in September was a celebration of where we have been and also of where we are going. At the event, which was attended by the owners of our 139 member companies, 27 of those companies were recognized for their commitment to NationaLease and adherence to Member Standards.
Economy – It’s been a great year for the economy and certainly a great year for the transportation industry. And a great year for transportation translates into a great year for the full service leasing industry as well. Even better news, the holiday season is shaping up to be one of the best in years. Even with six fewer shopping days, holiday retail sales are expected to reach over $1 trillion dollars…that’s trillion with a “t.” Undoubtedly, that is helped along by online sales that represent more than 13 percent of all holiday retail sales. All this merchandise needs to be delivered and most of that will be delivered by truck.
Technology – This was the year when the ELD Mandate went into full effect. For most of our members and customers, the deadline was met with few complications. How the use of this technology will impact the bottom line is still to be determined, but there is no doubt that fleets now have access to much more data than they have had in the past. That visibility can lead to much more informed decision making. There has also been considerable movement in the area of electric vehicles and, certainly, there is increased interest in autonomous trucks (when that will turn into actual movement is yet to be ascertained).
As I noted earlier, NationaLease has never simply rested on our laurels. We are always looking forward. That’s why the motto for our 75th Anniversary is “The journey continues.” We expect changes and challenges in the year ahead and feel confident that we are ready to face both with optimal results.
Economy – It is generally expected that businesses will experience a slowdown in 2020. That is making companies take a closer look at where they plan to make investments with an eye towards repurposing capital. The trucking industry is a cyclical one where downturns and upswings alternate. We’ve seen a number of companies declare bankruptcy this past year and the recent sudden closure of Celadon Trucking left chaos in its wake. However, what creates great challenges for companies that have fleets provides great opportunities for those of us in the full service leasing and rental industry.
Full service leasing – Last month, MarketWatch noted that full service leasing will play a dominant role in the transportation industry; “predicted to grow at the fastest CAGR over the predicted years.” The National Private Truck Council (NPTC) surveyed private fleets and found that the fastest growing choice when it comes to acquisition was a combination of ownership and leasing.
Those challenges I mentioned above contribute to this growth. Private fleets are expensive to purchase and maintain; changing technology necessitates ongoing training for both technicians and drivers; there is a troubling shortage of both technicians and drivers; and regulatory issues need to be addressed on an ongoing basis. All of these concerns have led to an upswing in outsourcing transportation needs. As MarketWatch stated, full service leasing “helps in managing the operating costs of trucks including roadside assistance, licensing, taxes, repairs, and maintenance.”
Rentals – The other part of our business, rentals, enables companies to better manage their working capital through smarter control over assets. For many companies seasonality requires scalability. There is no need to keep and maintain assets you only use three to four months out of the year. Ultimately, rentals and full service leasing helps companies control their administrative costs when it comes to their transportation needs and enables them to repurpose capital to focus on their core business rather than their fleet needs.
Challenges – Even though our industry will likely see growth as companies look for better ways to manage working capital that does not mean we don’t face challenges of our own. One of those challenges is the “uberization” of the industry. The world is changing so quickly when it comes to not just the technology of the vehicles themselves but also the ways in which these vehicles are acquired. Disruption is ongoing and a new generation of executives is emerging; one that is used to these types of disruptive businesses as a way of controlling costs.
To answer this challenge, NationaLease will continue to offer customers more than simply cost-effective alternative financing options. We will continue to optimize our customers’ fleet maintenance and management, offering the finest in service to our customers’ needs.
So bring it on, 2020, we can’t wait!
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