Ferrier Hodgson cautions operators on fleet diversification

Growing number of small to medium fleets are diversifying their fleet but is it a wise move?

By Ruza Zivkusic | September 30, 2011

A growing number of small and medium fleet operators are shopping around to save on truck purchases due to rising fuel prices, stagnant interest rates, and customer demand, Ferrier Hodgson says.

Brendan Richards, a partner in the business advisory and recovery firm, says he is noticing distinct changes in the make-up of transport fleets.

"Whereas previously a fleet of 15 trucks could be made of only one or two makes, I am now regularly seeing four, five or more makes of trucks in these fleets," he says.

But Richards cautions operators by saying there are critical implications in running a diverse fleet, such as repairs and maintenance costs.

"With few common spares, operators have to hold a greater number of spares, tying up valuable working capital or risk having trucks unproductive while spares are sourced," he says.

"Whilst bargaining on one-off purchases may yield savings, loyalty to one brand over time makes the customer more valuable to the manufacturer and elicits deals which are likely to outstrip short-term savings."

But financiers need to clarify that a good deal sometimes is not the best deal, he adds.
"The lesson for financiers is that your customers need to demonstrate a longer-term view in purchasing decisions," Richards says.

"While financiers are not in the business of questioning purchasing decisions if the application stands up, relationship managers and bankers should be ready to talk to their customers about this issue and highlight that sometimes the best deal isn’t really the best deal."

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