Future-Proof Your Business
Is your business future-proof?
Don’t wait until it’s too late. The logistics space is shifting rapidly - and the last thing you want is to get left behind. Read on to learn more about the ways in which our industry is changing, and how you can proactively prepare your business to succeed in volatile market conditions.
Inventory is Harder to Find
We’ve reached the end of the inventory influx that followed 2020’s ecommerce boom. Demand five years ago was very high, so manufacturers churned out as many trucks as they could. When demand decreased in 2021 and the years following, that led to excess inventory of 2021, 2022, and 2023 model year trucks. These trucks were often sold at reduced pricing because dealers wanted to move the inventory off their lots.
Now, however, that extra inventory has been sold off. Demand is rising for larger vehicles like P1100’s and P1200’s, yet manufacturers are reporting build/wait times of up to 7 months for new vehicles. As supply has diminished and demand increased, prices for trucks are rising. Tariffs are also making trucks more expensive, since truck-related expenses will be passed on to purchasers. Contractors used to $65k-$68k for vehicles should expect prices as high as $85k in the coming months. (We know…yikes.)
2.0 Often Requires New, More, and/or Different Sizes of Trucks
Part of the reason demand has risen for larger vehicles is the shift in many terminals to “2.0,” or Express integration. If it hasn’t hit your terminal yet, it’s just a matter of time. With 2.0 comes numerous territory changes across the board that often lead to new/additional territory that FedEx expects contractors to be able to absorb quickly - with little advance notice or time to prepare their operations and their fleets.
In order to maintain operational efficiency, many contractors are opting for fewer, but larger, vehicles to run their routes. However, because so many contractors are experiencing changes that require new, more, and/or different sizes of trucks at the same time, there's a lot of competition to acquire vehicles, especially larger trucks.
Used or New?
It can be tempting to just say, “I’ll buy used trucks.” That comes with its own risk profile, however. Demand for used trucks is also rising, driving up prices, and used vehicles come with an elevated risk of costly repair and maintenance issues. If you buy used, and suffer a catastrophic maintenance issue, you’re on the hook for that expense. Got payroll to make, but need a new engine? That’s a contractor’s nightmare.
As the costs and risks of buying used trucks increase, incorporating used trucks into a fleet will soon stop making financial and operational sense.
Cost-Effective Solutions to the Shifting Landscape
The good news is - there are solutions to the challenges the contractor community is currently facing and that we’ll all contend with in the near future.
From a fleet strategy and maintenance perspective, securing new trucks will be absolutely imperative. That does, of course, come with its own set of hurdles and timeline challenges - build/wait times, financing costs, down payments, etc.
New inventory doesn’t have to mean traditionally financed inventory, however. Leasing continues to be an attractive, accessible option for many contractors. Lease Programs like Hello Truck Lease’s industry-leading program can change the game for contractors who know every cent matters. With all* repair and maintenance included, Hello Truck Lease clients enjoy more predictable cash outflows. Secure brand-new vehicles and stop worrying about unpredictable or catastrophic repair and maintenance expenses.
We also offer a tiered pricing program designed to help contractors integrate brand-new units, AND to reduce the variable repair and maintenance expenses related to those units.
We feel strongly that reduced unpredictable fleet expenses make leasing a good fit for most FedEx contractors. Optimize your operations and lower your stress with more predictable cash outflows. At a minimum, we’d love to chat with you about the quickly changing landscape in the logistics space. Let’s gameplan your fleet strategy together, so you don’t have to go it alone.
We’ve been contractors. We’ve been in your shoes - in fact, our founders ran one of the largest FedEx ISP operations in the country for years! We know the stressors that come with the business, and we have the expertise to address those variables with you.
Fleet Strategy Matters Now More Than Ever
Inventory is scarce, and FedEx’s demands on contractors - not to mention macroeconomic variables - are increasingly stressful. Your fleet strategy has always been imperative to your business’ success.
Now, with the changes in inventory availability and vehicle pricing, the emphasis on preserving profitability through effective fleet strategies is even more critically important.
That’s where we can help. Contact Hello Truck Lease today to start a conversation about your fleet strategy. Things are changing, but that doesn’t mean your success has to falter. We can help you craft a fleet strategy that takes into account the changes in inventory availability and pricing, refreshing your fleet, deploying or retiring older units, lowering repair and maintenance costs, and more.
Don’t wait. Staying ahead of industry fluctuations will make all the difference in business’ success in the coming months. You’ve got this - and we’ve got your back.
*excluding glass, tires, and physical damage
