Truck rental-and- leasing giant Ryder System said it is expanding efforts to “refresh” its North American rental fleet with 6,700 new trucks, tractors, trailers and vans to meet accelerating demand as the economy continues to rebound.
The new equipment includes multiple classes of tractors, trailers, refrigerated equipment, straight trucks and light-duty vans. The buys will expand Ryder’s commercial rental fleet and replace older model vehicles that are being retired.
This effort, which is in addition to the infusion of 4,900 new vehicles last year, is aimed at accommodating anticipated economic growth, said Mark Cicchini, vp-rental for Ryder. Together, those nearly 12,000 new pieces of equipment raise the percentage of model-year-2010 or newer vehicles in Ryder’s fleet to more than 40% and the total fleet count to nearly 30,000, he noted.
“This [6,700 unit] investment represents the second phase of a fleet refresh we launched last year in anticipation of increased demand from both rental and lease customers requiring supplemental capacity in a recovering economy,” Cicchini stressed.
“In 2010, we identified increasing demand across all classes of vehicles – light-duty vans and trucks, medium-duty trucks, heavy-duty day cabs and sleeper tractors and dry, refrigerated, and flatbed trailers,” he added. “This year, we’re seeing even more of an uptick in demand [and] we’ve also added more refrigerated equipment to help our customers comply with recent FDA Food Safety Modernization legislation and more environmentally-friendly emissions standards in certain regions.”
Cicchini said that Ryder has already begun integrating the new equipment into its fleet and will continue to introduce new vehicles through April of this year and, as vehicles are retired from Ryder’s rental fleet, they will become part of the company’s used vehicle inventory.
The rental fleet expansion reflects increasing optimism on the part of Ryder as a whole that the trucking business environment will continue to improve and offer opportunities for increased rental and leasing activity.
The company noted its earnings topped $124.6 million on total revenue from continuing operations of $5.14 billion last year, compared to earnings of $90.1 million on revenues of $4.89 billion in 2009, and Ryder believes its earnings in 2011 will range from $2.80 to $2.90 per diluted share – an increase of 26% to 31% over Ryder's comparable full-year 2010, with 2011 revenues projected to top $5.73 billion, up 12% from 2010.
"We took a big step forward in 2010 with performance that was substantially better than our 2009 results,” said Greg Swienton, Ryder chairman & CEO, in the company’s year-end earnings report released earlier this month. "Although we have not yet experienced a return to growth in every product line, we completed an extremely good year of progress with revenue growth in all segments and higher overall earnings.”
Swienton said Ryder will continue to make investments in its fleet and maintenance technology to position itself to handle what he calls “accelerated growth.”
“In 2011, even in a gradual recovery with the lingering effects of a deep freight recession still apparent … we expect that the substantial pent-up demand for lease fleets, due to a range of factors including new, more expensive EPA-mandated engine technologies, will result in future contractual revenue and earnings growth,” he stated.