While the road transportation process is complex and is comprised of many elements, the two main elements without which the process could not even proceed are trucks and trailers. The differences between logistics solutions providers differ, as some of the providers are heavy-asset companies, meaning they own all of their trucks and trailers. Others are either asset-light or completely asset-less, like digital freight forwarders, which connect providers with customers who are in need of a shipment.
The different types of companies have their upsides and downsides. Nevertheless, a large part of the logistics industry, in particular in Europe, are asset-heavy companies. While owning all of your assets does result in higher capital expenditure (CapEx), as well as operating costs, it can provide an excellent platform to propel your customer service and road transportation offering to the next level, as well as provide other advantages over asset-light companies.
1. Tailored solution for customers
One benefit that full ownership of your fleet, namely trucks and trailers, does provide is the fact that you can offer your clients a completely tailored solution.
For example, if a customer needs to move grapes on the road and has to do so quickly to preserve their shelf life, with a long journey ahead, a fully-owned fleet can help in providing a solution. If one driver has reached the limits of his working hours, another driver, who just started his working trip and is legally allowed to drive for some number of hours, can come and pick up the trailer with the grapes, trailer swapping with the former driver’s trailer that is not filled with time-sensitive goods.
If a company owns refrigerated trailers, the logistics provider not only is able to transport fish, frozen, and fresh food, but also participate in the pharmaceutical supply chain, once the required permits, like a Good Delivery Practice (GDP) certificate, is obtained.
Finally, a tailored solution helps improve your relationship with a customer, as not only you are described as a reliable logistics partner, but also a partner that can help you deliver your goods in a quick and safe manner, no matter the apparent difficulty of the task.
2. Oversight of the fleet
Another thing that is in full control of the fleet is the oversight of your trucks and trailers. Not only does that include where they are located and the direction they are going, but also constantly having up-to-date information about such things as maintenance or insurance.
While maintaining and insuring your own fleet comes with added expenses this assures that your trucks on the road adhere to the latest safety standards. If a company like Girteka Logistics operates trucks that are new and are still covered under the manufacturer’s warranty, maintaining that warranty is crucial to keep the value of the asset down the line as best as possible. In turn, if your trucks are maintained according to the manufacturer‘s recommendations and as they participate in the process of carrying goods on the road, following a mechanical issue, can be repaired as soon as possible. As a result, the safety and comfort of the drivers are ensured, as well as of those that live and use the roads as well. Furthermore, that means that you can ensure the highest standards of your road transportation solutions, providing quality services to your customers with properly maintained trucks and trailers.
3. Planning capacity
Moreover, oversight allows you to plan your capacity ahead of time and avoid difficulties such as overcapacity in a certain region.
With a fully-owned fleet, you can plan ahead of time how much capacity you can dedicate to your customers and not overstep your own boundaries, potentially avoiding overcapacity in certain regions during certain periods of time. If you have the oversight and the ability to plan ahead, you can mitigate a scenario whereupon overcapacity could result in you driving empty kilometers or selling off capacity ata loss in order to move your trucks from the region where there is not sufficient demand for road transport cargo.
Coupled with other measures, whether that would be proactive sales or various management systems, even Artificial Intelligence (AI)-based tools, making the best use of your assets is much easier if you control the whole process. For example, by utilizing an AI Planner, which helps streamline the process of connecting a truck and cargo while they are on the road, you can further reduce the empty kilometers and be even more efficient in your transportation process. If you only own the truck and rent the trailer, the process is much harder to do, as there might be a disconnect between the two different operators of the assets not only in terms of their technological advancement but also in terms of their sales goals and process.
4. Second-hand market
One of the negative sides of being an asset-heavy company is that your CapEx is very high, especially as you try to renew your fleet. Nevertheless, that negative can be turned into a positive.
For example, if you, as a logistics provider, aim to stay up to date in terms of the safety and comfort technology used on trucks, you have to constantly renew your fleet, not to mention that as an operator, you want to grow. As a result, your acquisition costs will be very high, as, after all, the new trucks are obtained directly from the manufacturer.
Still, if you constantly refresh your fleet, you also can manage the fleet and shift it to the second-hand market. On one hand, it means that you can establish partnerships and sell trucks that are mechanically sound to other providers across Europe and continue the cycle of financing your new trucks and renewing your fleet steadily. Truck resellers constantly bring in newer truck models into the market, and so buying second-hand definitely does not mean buying outdated. Trusted resellers offer a wide range of models, which undergo a series of maintenance checks before the selling process. ClassTrucks, part of Girteka Logistics, has a catalog of over 3 000 trucks, with an average age of 2 years – such solutions can enable you to benefit from the advantages of recent models at a fair price, as you build up your fleet.
If you decide to renew your fleet, you may also benefit from the second-hand market, reselling or leasing your previously owned trucks yourself or through a platform. This could offset some of your high acquisition costs for the new trucks.
On the other hand, you can also utilize that fleet to lease it to other logistics operators to continue earning revenue on it, despite it being phased out of your fleet. That means that you can also promote the quality of your services to operators that do not have the capability to expand and in turn, their clients as well.
5. Access to the latest technologies
If your fleet of trucks and trailers is constantly updated, that means that you have access to the latest technologies, whether that would be safety, comfort, or other innovations that help you be more efficient with your assets.
With the pace of technological advancements as fast as ever, having a young fleet of trucks is seemingly a must in today‘s world. Modern technologies make the life of a truck driver more comfortable and safer. For example, modern Volvo FH Trucks, of which Girteka Logistics ordered 2,000 back in February 2021, have the newest safety features, like the industry-first adaptive high-beam headlights. In addition, the new FH Trucks feature downhill cruise control, preventing unwanted acceleration when going downhill, together with Adaptive Cruise Control (ACC) that eases the load of work throughout the day for the drivers. While collision warnings with emergency braking and electronic stability control are yet to trickle down to the logistics industry, the Volvo trucks are standardly equipped with an electronically controlled brake system (EBS), a prerequisite to the aforementioned collision warning system.
However, another strong argument to constantly refresh your fleet is to have the most environmentally friendly trucks that are available on the market. The same Volvo FH trucks that have the I-Save technology can combine the newest engine and other features to deliver fuel savings up to 7%. With ever-increasing pressure on the logistics industry to reduce its emissions, both the manufacturers and the road transport service providers are more than keen to operate in more sustainable ways and new trucks are one of the best ways to do so. After all, operating the newest engines that are available on the market is not only the currently best measure to reduce your emissions, but it also allows you to utilize such technologies as HVO and especially HVO100, a pure form of the sustainable fuel, depending on your transport lanes, which take a step further to conduct even more sustainable logistics services.
All in all, despite the downsides such as the high acquisition cost, there are multiple benefits of operating an owned fleet of trucks and trailers. The ability to have full and control and oversight of the fleet helps improve the service provided to clients and operational efficiency, while unlocking the advantages of the latest technologies.