2020-12-07

Helping "forks" for a nice Christmas Eve!

For many of the KION Group's customers, Christmas is the most labor-intensive time of the year. After all, Christmas trees, treats and gifts have to be ready in the living room in time for Christmas Eve. In order to cope with the high, but timely limited order volume, it’s the time of the rental fleets. The KION Industrial Trucks & Services segment has therefore long been building on an integrated business approach: new vehicles of the KION brands Linde MH and STILL are not always purchased directly from the customer, but are brought to market via various financing options such as leasing or rental – and not just before Christmas:

"Around half of all new vehicles sold by the KION Group brands are now sold under leasing agreements – a lucrative and resilient business model that has shown its strengths not least during the pandemic," says Wolfgang Köhne, Managing Director at KION Financial Services. "Particularly in this Corona year, we were able to adjust contracts to support customers who were facing major challenges due to the downturn in the global economy and the difficulties in a number of industries. In this way, customers regulated their expenses while ensuring that their fleets were fully operational.“ Usually, the leasing contracts also include servicing of the vehicles over the entire term, which contributes to customer satisfaction and customer loyalty. "At the same time, the leasing business was a stabilizing factor for the KION Group due to stable cash inflows - this applies every year, but in 2020 even more so," adds Köhne.

KION Financial Services uses its integrated approach to meet the growing customer demand for customized financing solutions and supports the new vehicle business in many of the KION Group's markets. As an important service function, the Financial Services activities are not only an important sales and customer loyalty tool through the leasing business, but also by financing a short-term rental fleet. In fiscal year 2019, the leasing and short-term rental fleet on the balance sheet of KION GROUP AG totaled approximately 2.9 billion Euro.

More than 90,000 rental trucks in use worldwide

Especially the rental of vehicles can be of great interest for many customers. A lot of companies are dependent on forklifts and other warehouse vehicles in their everyday work and cover their basic needs with their own vehicle fleets. But what if a forklift is not intended for daily use, if there are breakdowns in the company's own fleet or if certain equipment is only needed temporarily? This can be the case during order peaks or in exceptional situations such as the Corona pandemic, and short-term rental then represents a sensible alternative to purchase. These are usually previously leased vehicles of the KION brands Linde Material Handling and STILL, which are added to the pool of rental vehicles after the contract period. This pool is large: Linde MH has more than 60,000 trucks for hire worldwide, STILL has around 33,000 in Europe alone.

STILL, for example, has been working for more than eight years with GROEN-Direkt Boskoop, a Dutch wholesaler for botany. The assortment includes shrubs and bushes, fruit trees and Mediterranean plants, but also: Christmas trees. At the beginning of November this highly seasonal business naturally increases – what would the festive season be without the traditionally decorated tree? For this exceptional situation, the company needs active support every year. "We send out more than 100,000 Christmas trees in the relatively short period of only three weeks," says Arjen Waltman, Logistics Manager at GROEN-Direkt Boskoop. "The cooperation with STILL has been running smoothly for years. We can rely completely on the rented trucks, which is very important: In this labor-intensive phase there must be no delays. And if a spare part should ever be necessary, we have had very good experience with the service from STILL." In addition, the modern rental vehicles also meet the desired sustainability requirements: GROEN-Direkt Boskoop now exclusively rents STILL forklift trucks with electric motor (model RX-60) and EXU-16 low lift pallet trucks for the Christmas tree business after many years of using the RX-70 model with its combustion engine.

Customers are spoilt for choice

In the months of November and December, forklifts and other warehouse technology equipment are particularly in demand. In the warehouse every additional helping "fork" is therefore welcome. In principle, it can be rented with great flexibility: one day, one week or several months - the customer has many options. The rental service of Linde Material Handling and STILL offers individual solutions with a wide range of products: from forklifts with electric or combustion engines, container stackers and special vehicles to working platforms and accessories. The advantages for the customers: Rental fees can be booked directly into the costs and are therefore balance sheet neutral. Also, the costs for maintenance, repairs and insurance are already included in the rent. Should the forklift have a technical problem, the tenant is quickly helped: By replacement equipment, short-term repair or by the exchange of wearing parts. In addition, training on the equipment is offered.

Morrison Supermarkets, the UK's fourth-largest retail chain according to the company’s website, also benefits from the advantages of a flexibly controllable fleet: "We rent Linde Material Handling vehicles at different times of the year. For us, this solution is an ideal back-up when unforeseen order peaks occur. It allows us to strengthen our core fleet in specific areas," says Colin Brereton, Logistics Manager at Morrison Supermarkets. According to own statements, the company operates over 500 stores in the UK, which are visited by an average of around 11 million people each week. However, the time with the greatest demand comes as no surprise, especially in the retail sector: Christmas. Here, too, Morrisons rely on the support of Linde Material Handling: "LMH provides us with the rental trucks as needed, takes care of their delivery and service. This allows us to concentrate on our core task, ensuring that our products are always available for our customers". Morrison uses LMH counterbalanced forklifts and reach trucks, among others.

Renting a forklift or other industrial trucks is a sensible solution not only for large corporations. It especially offers smaller companies the advantage of only having to raise a part of the investment sum. Especially in the case of longer rental periods, a later purchase option can be agreed upon, which grants the tenant a preferential right of first refusal. It’s another advantage that the rental service offers to the customer. This is because companies can thoroughly test the vehicles in use before purchasing them.

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