Amid economic uncertainty, industry operators have had to streamline operations
Los Angeles, CA (PRWEB) February 05, 2013
The Truck Rental industry operated in a volatile environment over the past five years, according to IBISWorld industry analyst Kevin Boyland. The recession and its aftermath decreased activity in the truck transportation sector and markedly decreased housing construction activity; as a result, demand from the commercial and consumer markets waned in 2008 and 2009. Amid the tough economic climate, many surviving trucking firms opted for truck leases over purchasing vehicles outright to improve flexibility and lower operational costs.
Economic uncertainty has forced industry operators to streamline operations and improve efficiencies to maintain profitability, says Boyland. “One strategy the industry's largest operators undertook was to maintain and expand economies of scale through mergers and acquisitions.” Indeed, major player Ryder Systems Inc. completed five industry-related acquisitions from 2009 to 2011. As consolidation within the Truck Rental industry increases, the number of industry firms is expected to decline 2.0% per year on average to 251 in 2013. The industry currently has a low level of market share concentration. Other major companies include Amerco (operating through U-Haul International), Penske Truck Leasing and Enterprise Holdings.
Following significant recessionary declines, a government stimulus package served to increase the number of housing starts. As more consumers moved, demand for truck rentals from this market increased. Although demand for truck rentals and leases waxed and waned, the industry received an overall net increase in demand over the five years to 2013, albeit a small one. As a result, revenue is estimated to grow at a meager annualized rate of 0.4% over the period to $2.5 billion in 2013.
Increasing emissions and fuel-efficiency regulations are anticipated to drive demand from the commercial market going forward. Indeed, regulation aimed at lowering emissions from long-haul tractor-trailers and large pickup trucks by 2018 will require downstream customers to either purchase or lease new vehicles. IBISWorld expects that the majority of firms will lease their trucks from industry operators as downstream fleet operators seek more predictability and flexibility in their cost structures. As trucking companies replace their fleets with more fuel-efficient leased trucks and housing construction activity recovers, revenue is forecast to grow over the five years to 2018. For more information, visit IBISWorld’s Truck Rental in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry primarily rents or leases trucks, truck tractors, utility trailers, semitrailers, recreational vehicles (RVs) and buses without drivers. Vehicle retailing activity is excluded from this industry. Also, firms that rent or lease industrial trucks and equipment, such as forklifts, are covered in the Industrial Equipment Rental and Leasing industry (IBISWorld report 53249CA).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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