Price Hike in Rental Services Discourages Customers during COVID-19 Pandemic
The revenue of companies in the truck rental market took a major hit due to nationwide lockdowns in several countries as a result of the COVID-19 (coronavirus) outbreak. The cost of renting a truck has jumped sharply, especially during the peak months of the pandemic, and continues to surge in countries such as the U.S., Brazil, India, and Russia. Lockdown restrictions have been relaxed in almost all countries worldwide but the rise in cost of renting trucks is anticipated to prevail in the upcoming months.
Companies in the truck rental market should tap opportunities in the transportation of essential goods and products such as healthcare supplies and FMCG products. However, more than 50% hike in truck rental prices is discouraging customers, thus slowing down the truck rental business. Moreover, the non-availability of drivers has also led to a price hike in rental services.
Intracity Logistic Service Mobile Apps Being Publicized for Instant Truck Booking
Innovative logistics apps are creating incremental opportunities for stakeholders in the truck rental market. The Porter App is gaining popularity in India for its intracity logistics services. Thus, this market in Asia Pacific is projected for exponential during the forecast period, where India is one of the fastest growing economies in the region. As such, the truck rental market is estimated to reach a value of US$ 204.2 Bn by the end of 2030.
Stakeholders in the market for truck rental should collaborate with mobile app companies providing logistics solutions to generate revenue streams. The increasing number of smartphone users in India has led to the popularity of mobile apps. With the help of mobile app logistics services, users are able to choose the vehicle of their choice and instantly book it without any waiting time.
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High Uptime Trucks of Popular Automotive Companies Create Incremental Opportunities for Logistics Companies
Companies in the truck rental market are tying up with reliable automotive companies to bolster their credibility among customers. Companies in the truck rental market are developing user-friendly websites that help customers to plan their route. Websites are becoming a good source of verified partners who stock truck fleets with high uptime.
Logistics companies are broadening their services portfolio by offering safety measures while transporting goods. These companies are increasing efforts to build a strong network of reliable drivers that safely transport the goods. With the help of reviews and recommendations from customers on websites, logistics companies are building their credibility, which also benefits vehicle providers.
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Truck-as-a-Service Business Demands Skilled Technicians to Troubleshoot Software Issues
The truck as a service business model has emerged as a game changer for rental companies. However, like all businesses, even the truck rental market is challenged with complexities in advanced truck technologies. This has fueled the demand for skilled technicians who can troubleshoot technological problems in vehicles. Companies in the truck rental market are increasing efforts to introduce diagnostic technologies and applications in trucks that can greatly reduce the turnaround time and deploy real-time insights about system downtime. As such, electronics, Big Data, telematics, and software technologies are becoming increasingly mainstream in advanced trucks.
OEMs and tier-1 system suppliers are facilitating predictive maintenance technologies in trucks to generate digital insights for fleet owners. These technologies are leveraging telematics systems in trucks, whilst changing the operating conditions for service and maintenance providers. The truck-as-a-service business is growing rapidly in the U.S., which explains why North America is predicted to dominate the truck rental market during the assessment period.
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Specialist Vehicles and Protection Packages Ensure Safe Transportation of Large Objects
A simple and hassle-free rental experience is highly preferred by customers. Companies in the truck rental market are expanding their fleet of trucks that keeps rental cost down for customers. For instance, Europcar – a French mobility solutions company, is gaining recognition for its flexible range of self-drive solutions for vehicles used in short-term and long-term applications. Key market developments are contributing toward a robust CAGR growth of ~10% of the truck rental market throughout the forecast period.
Companies in the truck rental market are providing tailored solutions to customers with a range of additional drivers and protection packages to meet specialist requirements. They are increasing the availability of specialist vehicles that offer total flexibility and convenience, while transporting large objects.
Truck Rental Companies Address Damage to Goods during Freight Transshipment Processes
There is a growing demand for truck rental services to conduct intermodal logistic activities. Since relocating within or outside the domestic country is potentially challenging for customers, companies in the truck rental market are stepping in to provide packaging and moving services to avoid deterioration of goods and products. Since local packers and movers are found to take goods’ protection for granted, major truck rental companies are increasing efforts to eliminate these issues by taking care of all packing and moving activities.
During freight transshipment, it is found that the belongings of customers are often damaged, since freight transfer involves relocation of goods from one shipping vehicle to another during vehicle breakdown. Hence, companies in the truck rental market are addressing these issues of freight transshipment and are providing professional relocation services to avoid damages to goods.
Truckers have been unwilling to work due to harassment by police and lack of clarity on what goods are permitted to be transported amidst the COVID-19 pandemic. Apart from the lack of skilled technicians for troubleshooting telematics and software problems in the truck-as-a-service business, road conditions in India also suffer, causing a redundancy in market growth. Hence, companies should make collective alliances and appeal to government to improve the condition of national highways in India.
Moreover, mobile apps are creating lucrative opportunities for truck rental companies.
Truck Rental Market: Overview
- The global truck rental market is anticipated to expand at a CAGR of ~10% during the forecast period, owing to increase in preference for cost-effective truck rental over purchase
- Increased ownership expense, growing stringency in emission norms compelling routine upgrade of vehicle systems, and rising maintenance cost have prompted transport companies to shift toward renting truck instead of buying truck
Major Drivers of Truck Rental Market
- Automakers have established a financial business arm called captives and are diversifying into rental, leasing, and finance business. Automakers are developing service models apart from their mainstream vehicle sales business. Aggressive advertising and lucrative rental offers by OEM captives are enhancing market availability and awareness about truck rentals, which in turn is estimated to boost the truck rental market during the forecast period.
- Routine upgrade of truck fleet, in terms of digitalized solutions and emission control technologies, and associated maintenance repair cost have discouraged truck ownership and led to more consumers adopting truck rental services
Segmentation of Truck Rental Market
- Based on lease type, the full service/rental segment is anticipated to expand at a notable growth rate during the forecast period. Full service includes fuel cost and other value added services. It is gaining high preference in the global market. Finance lease is more attractive in North America, as consumers are found to prefer having ownership at the end of the tenure.
- Based on service provider, the NBFCs segment held a leading share of the global truck rental market in 2019. Transportation service companies are major providers of rental and short-term truck leasing. OEM captives are entering into auto-financing. Automakers such as PACCAR, Daimler, and Volvo have started providing truck rental services.
Truck Rental Market: Regional Analysis
- Based on region, the global truck rental market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
- North America held nearly 44% share of the total global truck rental market, in terms of revenue, in 2019. More than 70% of truckers in the U.S. have less than 10 trucks. Small & medium transportation companies are preferring truck rental against direct purchase due to its cost-effective nature. The U.S held a leading share of the truck rental market in North America. The trucking industry in the U.S. is a prominent transporter of heavy freight, globally.
- North America is followed by Europe, in terms of revenue share of the global truck rental market. Roads are the dominant means of freight transport in Europe. The EU Common Transport Policy has included its main objective to move toward sustainable development of transport. Emission from transportation accounts for nearly three-fourths of the total emission in Europe. Increase in stringency of emission norms has raised the cost of trucks as well as the demand for retro-fitment of emission devices on on-road trucks. Transport companies in the region are increasingly preferring truck rental to avoid the hassle of upgrade of truck fleet and save on associated cost.
Truck Rental Market: Competition Landscape
- Prominent players operating in the global truck rental market include –
- Daimler AG
- PACCAR Leasing Company
- Ryder System Inc.
- MAX Rental.lu AG
- The Larson Group
- Fetch Truck Rental
- Imperial Truck Rental
- Element Fleet Management Corp.
- U-Hual International Inc.
- Budget Truck Rental LLC
- Enterprise Holdings Inc.
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