Ensuring Uptime
Having reliable trucks is crucial for Cold Front Distribution's operations. "Without the trucks, we wouldn't be able to run our routes. If we can't run routes, we lose revenue, and we all know lost revenue can't be made up. It is gone forever." According to Hocum, "If we have breakdowns and can't get rental units, it affects our top and bottom line."
Missed deliveries also damage the company's relationships with its customers. "We distribute for all of the major frozen food manufacturers. It doesn't make them happy when we can't make our customers happy," says Hocum. "If the customers are out of ice cream and frozen pizza, it creates a lot of problems for us, not just lost revenue."
Cold Front Distribution ensures uptime through the maintenance program included within its full-service lease, and through a contract maintenance program with Penske on its finance leased vehicles.
For Hocum, utilizing full-service leases makes more sense than adding maintenance riders to a finance lease. "It is more cost-effective, and the headache is taken out of our hands," Hocum says. "I've decided we are never going to use another finance lease. It will be a full-service lease, no questions asked."
Minimizing Residual Risk
Using a full-service lease helps Cold Front Distribution minimize residual value risk. "I'm not a used truck salesman, and I don't want to be in the used truck business," Hocum says. "The full-service lease is a far better way for us to go."
Streamlining Back-Office Operations
Hocum values the records maintained by Penske, which streamline Cold Front Distribution's operations. "You have the information and keep the data. In case of an audit, you have everything you need to get with the auditors," he says. "To have that additional support from your organization is a really big deal to us."
The back-office paperwork also reduces the administrative workload for Cold Front Distribution. "The invoicing is absolutely bar none the easiest to understand, whether it is a rental or a lease invoice," Hocum says. In addition, a full-service lease minimizes the time and effort the company invests in DOT licensing, all of which is handled by 黑料社
Benefit the Bottom Line
While he doesn't have an exact return-on-investment figure from leasing, Hocum sees the advantages. "Some of it is hard to get your arms around as far as putting a dollar value to it," he says, "but suffice it to say, I know it absolutely adds to the top and bottom line."
QUICK FIGURES
- Company Sales: Nearly $100 million
- Employees: Just Under 300
- Total Fleet Size: Over 100 Vehicles
- Penske Leasing Customer Since 2005
- About Cold Front Distribution: Cold Front Distribution receives premium frozen food items from major manufacturers and delivers them directly from its fleet of trucks to grocery stores, convenience stores and food service accounts throughout its service areas in Colorado, New Mexico, South Dakota, Texas, Wyoming, Iowa, Minnesota, Wisconsin and Nebraska.
