Haulage firm uses Operating Lease to renew its main contract
An established haulage company recently renewed their contract with a fish supplier and needed an extra tractor unit to meet increased demand.
The business owner - who is an existing customer of our transport team - approached us to see if we could help.
Customer background
The contract, which is the haulage firm’s main income source, requires them to transport fish from various ports across the country and deliver them to wholesale markets.
Work is seasonal, with the busiest period being between March and August, while September to February is much quieter because of adverse weather and fishing quotas.
The challenge of meeting new demands
Technological advancements have extended these traditionally quiet periods. New fishing trawlers are fitted with technology that freezes the fish at sea, which means the vessels travel further afield and stay out for longer periods of time.
Because of this, there are larger quantities of fish that need to be shipped to wholesalers. To keep up with the increased amount of fish that needs to be transported, the haulage company needed to invest in an additional tractor unit.
Solution
Area Sales Manager, David Derbyshire, from our transport team reviewed the business’s requirements and tailored an Operating Lease agreement for them.
An Operating Lease lets the customer rent the asset for as long as they need it, and only covers a portion of the asset’s total useful life, which means the rental fees are typically lower than they would be for a Finance Lease, for example. The rental fees are calculated based on the difference between the initial purchase cost of the asset and the residual value at the end of the agreement.
Results
The deal gave the customer access a new tractor unit without needing to purchase it outright. This meant that the company could meet the demands of its renewed contract and free up their working capital.
David Derbyshire commented: “Working with this customer was a great way to showcase what our Operating Lease offering can do. In this instance, the customer could fulfil their contract without having to pay a large deposit upfront while maintaining business as usual and adapt to the ever-changing fishing industry. We look forward to working with this customer again in the future.”
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