Rigid lift truck rental agreements are a thing of the past. Or at least they should be for financially savvy users. Rather than letting 60 months go by and getting slapped with a big bill for damages and other charges, users want flexible leasing options that allow them control costs on a quarterly, monthly, or even as-needed basis.
That is the bottom line of an article in SupplyChain 24/7 in which several experts weigh in on the anatomy of the lift truck lease.
Broken down into key steps, it looks like this:
Do your homework
Before you enter into an agreement, assemble a team of stakeholders. Personnel from procurement and operations should be in close contact to align their goals and outline common challenges. If your operation is using telematics to track your fleet and measure productivity, you are better positioned to structure the lease since you know exactly how many pallets each truck moves per hour and, thus, can base your need on solid facts. Ultimately, the article states, disciplined collaboration can enable very precise cost management and performance benchmarking.
Examine leasing companies
The nature of the material handling industry has spurred leasing companies to become more flexible. As many leasing companies now are willing to adapt adjustments in fleet composition, you may discover that a lease could be more advantageous than in the past. Leasing also is no longer associated with new equipment exclusively, a fact that may appeal to small and medium-sized business, says Tim Combs, president of sales and marketing for The Raymond Corporation, adding the same advantages apply to large companies.
“At the end of the term we take back the equipment and dispose of it in the best way possible for each unit,” Combs says.
Build in flexibility
By including provisions and clauses unanticipated events, you are not locked into a contract that does not work to your advantage during, for example, a slowdown in business. If you expect changes in the near future, you may benefit from a shorter lease that tends to allow more flexibility, the experts advice. A 12-month extension option is also wise to include since it enables you to keep using the lift truck if it is still solid at the end of the term, usually at a lower cost.
Maintain close relationship with dealer
If the dealer is involved in evaluating the equipment on a timely basis, you have a chance to take corrective action to avoid or cut damage-related costs before you get hit with a bill. The dealer can make a customer aware of damage charges, but they can also work to find creative ways to deal with those charges, according to Chris Craig, financial merchandising manager at Toyota Material Handling, U.S.A.
In the end, a flexible lease should serve you well.