Feeding the appetite for transport equipment online

A: Since joining the leasing industry in the 1990s, I’ve been involved with various transportation vendor programmes from a commercial perspective. Most recently, I sat on the board of a European Transport Joint Venture and was involved in projects with an international rental company and a last mile delivery provider in Southern Europe using electric vehicles.

Also, I recently joined a combined programme together with Rabobank focusing on e-mobility. Here we are building new commercial propositions to support our customers in the transition towards a zero-emission fleet. Together, we might be able to offer customers an interesting proposition with financing, charging infrastructure, fleet maintenance, fleet management and much more.

A: DLL has been doing business in transportation for 20 years. We form partnerships with a number of original equipment manufacturers (OEMs) and dealers to help them win more business through solid finance solutions. We make it possible for transportation manufacturers to directly add financing solutions to their equipment offering, even if they haven’t traditionally done so.

Due to a long-standing exclusive international joint venture, we haven’t always been able to serve the whole market, but that has changed. Today, it is a really exciting time for us to be part of a transforming industry with new waves of technology. We are actively involved in supporting different OEMs and solutions providers, including new and emerging companies, helping them to grow profitably and quickly by leveraging our international and local asset finance know-how, and associated product and service solutions. We try to ensure we work with organisations where we can really add value and are the right partnership fit.

A: Thermo King is a great example. The company provides reefer units for cool trailers and had desire to move into providing the complete trailer package, cooler included. This is a great example of a business needing investment and expertise to widen their asset footprint with a new venture. We were able to move fast and support them with this.

Another success story is our partnership with Xos Trucks, Inc, a leading manufacturer of fully electric commercial vehicles, to provide financing options for electric trucks. Clean technology and transportation is very important to DLL, so we are happy to be working with a leader in the electric vehicle industry to help enable the transition from traditional diesel trucks to electric.

We also do direct business. Picnic in Germany is a great example of this. Here, we are working with an up-and-coming vehicle manufacturer to finance fleets of electric last-mile delivery vans for grocery deliveries.

These are just a few examples. We are having discussions with many manufacturers and solutions providers on how we can support across different segments and new projects, helping them to get asset finance solutions in place ready to grow in the ‘new normal’.

A: Our specialisation is what gives us the edge and enables us to provide support to manufacturers, dealers, rental and service providers, and end-users. This combined with an international footprint sees us providing solutions from Chile, to the USA and Canada and from Portugal to Russia to New Zealand.

For example, we are already in early-stage discussions with players in the electric commercial vehicles market, ensuring we are in a position to be a first mover, with a well-informed view on the value of assets and the way these will be distributed. We will also have an informed and sophisticated view of asset costs, life cycles and associated residual values, so will be ahead of the curve when it comes to understanding products, technologies, suppliers, and customers.

A: When Covid-19 struck, it affected every industry differently. The transportation sector perhaps wasn’t as badly affected as people thought – lorries did shorter runs but more of them, often handing off products at national borders, but they were still running. However, bus and coach operations were heavily impacted by Covid. How they recover when lockdowns end is to be seen. One area that we will focus on are those manufacturers supplying buses and coaches who may need asset finance support to kick start the market.

The vast majority of transportation assets are financed. In the future, buyers will be looking to finance orders or up to hundreds of thousands or millions in value.

A: Providing digital options is the biggest area of focus for DLL as it is what we know customers need. We already have strong digital capabilities – we were an early adopter of online credit scoring, for instance, and we have eDocs capability for most countries too.

We are exploring mobile apps to do quotes and exploring APIs that link with OEMs and dealers’ order systems, all with fewer clicks and more convenience and speed for the customers. Our vision is to have the simplicity of Amazon for customers, so we’ve spent a lot of time doing customer journey analysis to inform our next steps.

We are also able to work digitally, in a way that not all businesses can. When Covid-19 hit, DLL quickly adapted to the many remote working challenges created by the Covid-19 pandemic. As a result, DLL remained ‘open for business’ across our entire global network, with almost 100 per cent of our employees working remotely from home and delivering support to our partners and customers during their most critical time of need. Other providers may not be able to be as flexible on this scale while retaining such great customer service.

A: Our focus is on being a specialist solution provider to the transportation sector, not just providing/securing the credit approval and quoting an interest rate as a bank or broker would. Our experience has shown us that understanding the market and the asset itself is where we can add real value, compared to a bank for example. We also take a greater interest in asset life cycles and new technologies and can offer informed residual values as a result.

Through a more holistic offering, we want to create opportunities for our partners to grow profitably. We know that having the right finance solution to support customers can be a helpful sales aid. But beyond this, equipment manufacturing companies can add the services they need to make the most attractive solution for their customers.

This can include telematics, pay per use, insurance offerings, fleet management, efficiency data, and more. Importantly, we can support partners and customers across 30 countries – no other provider has both the experience, in-depth asset knowledge and geographical scale that DLL does.

A: The solutions we can offer are very varied – we don’t have a one-size-fits-all approach but work to provide specific solutions, whether that is working directly with a dealer, providing a local OEM vendor programme, or helping equipment users to free up cash to finance their fleets.

The types of equipment we can finance are very varied too, including trailer units, commercial B2B vans and speciality vehicles (but not light commercial vehicles), electric commercial vehicles and off-road vehicles, as well as niche solutions for hook loaders, garbage trucks, road sweepers, and so on.

A: First, we do our research and due diligence around new technologies, including attending relevant conferences and events.

Let me offer an example. In the aerial work platform (AWP) sector – essentially cherry pickers, bucket trucks and the mobile elevating work platform (MEWP) space – we started offering leasing for this type of equipment as it emerged as a replacement for many scaffolding contracts. I doubt people realise that today we probably own the biggest fleet of AWPs in the world through our customer base.

It now feels like we are in that same stage in certain areas of the transportation sector, for instance for new companies specialising in making electric commercial vehicles and last-mile delivery firms.

In transportation, the electric/green trend is huge and brings a lot of opportunities for OEMs. For the mature manufacturers, the question is: can they manufacture competitive electric vehicles and get to market quick enough to compete with specialists and in many cases well-capitalised new entrants?

For those manufacturers with captive leasing subsidiaries, the manufacturing and supply risks associated with this trend will be amplified by the credit and asset residual value risk if they are doing this all in-house.

We have also seen recently, due to Covid-19, that consumer change has occurred rapidly. End-customers probably would buy a €10-20k asset online before, but for anything more expensive, they would typically want to see it, touch it, and talk to someone in person before committing to the purchase. But now, for all businesses and buyers, buying online and for ticket sizes well into the hundreds of thousands is commonplace. These trends have huge implications for product distribution, associated sales forces and necessitate a simple, reliable digital sales portal including integrated asset finance and service point at the digital point-of-sale.