Leasing Trailers Frees Capital for Fuel Change
Carriers that are on the small side can feel like innovation is a luxury they can’t afford to even think about, let alone pursue. But sometimes the only way to meet your long-term goals is to take a chance on something innovative. That’s what Sheehy Mail Contractors did when they decided to switch their fuel from diesel to natural gas for their fleet of 96 tractors.
Such a major change in the way you operate takes capital. Help can come from an unexpected place: your trailer fleet. Because leasing trailers frees capital.
For a transformative project to succeed, you first have to make sure you’re confident in your data and have a good handle on your costs. Otherwise you risk throwing good money after bad.
Sheehy, a Midwest-based carrier that hauls mail and general freight, has their costs firmly in hand. They’ve been tracking and analyzing every aspect of their business, from acquisition of equipment through zero carbon emissions, since the company was formed more than 60 years ago.
But in 2013, the company’s management team found itself at a crossroads. Maintenance records for their tractor fleet made it clear that the costs and downtime of diesel regenerations had become unacceptable.
So Sheehy decided to change their fuel to compressed natural gas (CNG).
Out with the old. In with the new (and leased).
It’s a fact of life that fleets age. As Sheehy rejuvenated their fleet, they started replacing older tractors a few at a time with new ones they could fit with CNG tanks. Although they knew they’d save money on fuel over the life of those tractors, the upfront cost gobbled up capital. The end line looked to be many years into the future.
Then they heard from someone that leasing trailers frees capital. So instead of buying new trailers, too, Sheehy is leasing brand-new, aerodynamic dry vans. This enables them to speed up the process of flipping their power units.