67 WALL STREET, New York – January 24, 2012 – The Wall Street Transcript has just published its Equipment Rental & Leasing Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Cost Structure Variabilization – Consolidation Potential in Fragmented Industry – Commercial Rental Pricing Gains – Growth in Equipment Leasing Adoption Rates
Companies include: Ashtead Group (AHT.L); Caterpillar (CAT); Ford (F); H&E Equipment Services (HEES); Hertz (HTZ); and many more.
In the following brief excerpt from the Equipment Rental & Leasing Services Report, expert analysts discuss the outlook for the sector and for investors.
Gregory T. Swienton is Chairman and Chief Executive Officer of Ryder System, Inc., a Fortune 500 transportation and supply chain management solutions company. Mr. Swienton joined Ryder in June 1999 as President and Chief Operating Officer, a position he held until becoming President and CEO in November 2000. A Member of Ryder's board of directors since June 1999, Mr. Swienton was named its Chairman in May 2002. Before joining Ryder, he was Senior Vice President-Growth Initiatives at Burlington Northern Santa Fe Corporation and also had served as the company's Senior Vice President of the coal and agricultural commodities business unit. He earned his MBA with an emphasis in finance from The University of Chicago and a BBA degree in marketing from Loyola University Chicago.
TWST: Would you start with a history and overview of Ryder System, Inc.?
Mr. Swienton: Jim Ryder founded the company in 1933, so next year we'll be celebrating 80 years in business. But even though we've been around a while, we still make basically the same promise to our customers – that they can rely on us to handle their transportation and logistics functions more efficiently, more cost effectively, and more consistently than what they could achieve by doing it themselves. So outsourcing to us allows our customers to focus on improving and growing their core business. We have some of the very same offerings that we've had since Jim Ryder created them, like the concept of a full-service lease. But over time, we've also infused our services with quality processes, innovations and quite a bit of technology, and we have many newer services for customers that, of course, are relevant in today's global sourcing and production environment.
We report externally in two segments. Fleet Management Solutions is the largest and the oldest business segment, and it includes commercial truck rental, leasing, maintenance and some other auxiliary services, as well as all of our used-vehicle sales. We're one of the largest used-vehicle retail providers in the country. We do that through more than 50 used truck sale centers in North America. The other segment is Supply Chain Solutions, which includes Dedicated Contract Carriage as one of its largest service offerings. We've previously reported Dedicated Contract Carriage separately, but from a practical standpoint, this offering has been managed as a fully integrated component of our supply chain solutions for a number of years now. It's a turnkey solution that includes not just the equipment, but also the drivers and the routing and the scheduling, and it's connected to fully engineered supply chain solutions, such as planning and execution and just-in-time deliveries of components into large-scale assembly plants in industries such as high-tech automotive and others.
TWST: Art Garcia, Ryder's CFO, recently told CFO Magazine: "In a recessionary environment, we're a cash flow story, and in a growth environment, we become an earnings story. What impact has the recent economic downturn had on Ryder as you look at the various industries and sectors the company deals with? Did it call for you to change the company's strategies or goals over the past 12 to 24 months?
Mr. Swienton: This is a good point, and I think it's important to investors. In fact, the quote he used wasn't created by him or by us, that's actually a reflection of what some analysts have written about us. We thought that captured very well exactly the kind of investment we are. I think what we've tried to do over time is improve our business model. In fact, it is somewhat countercyclical, so that it does increase cash flow during downturns and it provides us the option to make a lot of progress when businesses are uncertain about making long-term commitments for our contractual product lines.
TWST: In the 1990s, Ryder sold its consumer rental division that was well known. How big is your fleet today, and what's the makeup of the product lines?
Mr. Swienton: It's about 40,000 commercial rental vehicles today. That's trucks, tractors and trailers, and those are the ones you see on the street that are white with the red-and-black logo. They're distinguished from the leased vehicles, which have our customers' logos on them. By far, the largest part of our fleet is the full-service lease offering, and that has probably now over 120,000 units, but those are not as easy to spot as a Ryder unit, because they have our customers' logos painted on the side of the trucks or trailers. And the only way you'll recognize it's a Ryder-leased, -maintained product is through a little sticker on the cab door or the driver door that will have a Ryder logo and a registration number.
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