The transportation and logistics industry is rife with unpredictability, and shifting market conditions can cause a company’s equipment needs to change dramatically from one moment to the next. Buying or leasing equipment to meet surging demand can backfire once the market cools off and the carrier is stuck with the payment.
Now, there is a way for carriers to take advantage of additional revenue opportunities without permanently expanding their fleet or getting locked into a lease. Industry newcomer REPOWR has introduced a short-term rental solution for the trucking industry. Think Airbnb, but for trucks and trailers.
“REPOWR allows trucking and transportation companies the opportunity to generate extra revenue, in a way that has never existed. Our role within the industry is to tap into an increasing sector of the market that has excess equipment capacity and connect that excess capacity with those in need of equipment,” REPOWR CEO Patrick Visintainer said. “Simply put, REPOWR provides a sharing economy marketplace for peer-to-peer equipment rentals.”
Individuals or companies looking for equipment can log onto the REPOWR platform and search for rentals near them. Visintainer likens the experience to digital freight matching, but instead of matching freight to capacity, REPOWR matches people to equipment.
The system allows companies to expand their fleet in order to capitalize on short-term opportunities, but the system also enables owners of underutilized or idle equipment to list it for a daily rate. This means both parties are able to increase their revenue via the rental agreement.
Parked trucks cost carriers big. According to recent TCA Profitability Program research, the average cost of an unseated tractor comes in at $2,600 per month. That means carriers have to grapple with a sizable net loss from parked equipment each month. Renting that equipment out until it is needed again is one way to turn that loss into a profit.
Visintainer and REPOWR Co-founder Spencer Ware believe the company meets a previously unmet need in the densely populated logistics industry.
“The transportation industry is currently experiencing a rapid digital transformation. As the industry continues its quest toward complete digitization, we feel like we have developed a critical component to help trucking companies enhance overall performance,” Visintainer and Ware said in a joint statement. “We see REPOWR as a critical complementary software to transportation management systems (TMS) worldwide, to help the industry achieve that complete digitization for true, real-time visibility and optimal capacity utilization for the equipment side of things.”
The trucking industry is known for being volatile. Marketplaces are built to thrive in volatile market conditions. Take the commercial freight market as an example. The freight side of the transportation industry is considered short term. In contrast, the trucking equipment market is currently set up for long-term commitments. This can become inconvenient when the market changes.
A short-term rental option gives companies more flexibility and can be more cost-effective. Short-term rentals are instant and real-time, while long-term rental agreements could prohibit trucking companies from operating at optimal efficiency, depending on market behavior.
REPOWR’s initial feedback from Birmingham, Alabama, and Chattanooga, Tennessee, markets has served as a momentum catalyst for the startup.
“I think there is an increasing demand for a short-term rental marketplace,” Visintainer said. “We also firmly believe that companies throughout North America would like the opportunity to generate extra revenue on underutilized or idle equipment. Our job is to bring a different type of value to help motor carriers generate extra revenue.”
The coronavirus pandemic has taken a significant toll on the economy and the supply chain alike. Many transportation companies have either halted operations or are not operating at typical sustainable levels. In order to survive these challenging times, transportation companies may find themselves going outside the normal realm of operations to generate revenue, wherever possible.
Visintainer and Ware are adamant that REPOWR can properly serve the transportation industry, stating: “Our hope is that transportation firms can recognize the significant value that REPOWR can bring to the table. We consider the transportation industry to be the backbone of the American economy. REPOWR helps support large and small transportation businesses nationwide in a creative, ‘outside the box’ sort of way. Help REPOWR keep America moving.”