Rising costs of insurance, fuel and drivers — and the continuing decrease of freight rates — are causing some fleet owners to park their trucks to avoid taking losses.
About 20% of borrowers from Truck Lenders USA’s $40 million portfolio have done just that, Jason Spates, chief executive of Truck Lenders USA, told Equipment Finance News. The Oyster Bay, N.Y.-based company operates across the continental U.S.
Truck Lenders USA, whose peak truck finance portfolio is just north of $40 million, has GPS units in its vehicles, allowing the company to track where they are parked, even as payments are being made and the vehicles remain insured.
Truck Lenders USA has seen 25% of its borrower base start downsizing and selling some of their equipment, Spates said.
“It could be logical that [fleet owners] stop running just because the costs are so high,” West said. “Some of our guys are complaining that it’s cheaper for them to sit on the couch and not do anything than to go out and run for $2 a mile.”
Rising costs for fleet operators are increasing the need for an expedient recovery process, whether the trucks remain parked or are being sold, Kevin Carr, vice president of financial services at Littleton, Colo., GPS provider PassTime GPS, told EFN.
“The fact is that the sooner [lenders recover the assets], the easier it is for them to remarket them,” Carr said. “In some cases, there’s abandonment that’s happening, and the longer that asset stays out there being looked for, the more depreciation happens over time.”
