Maintenance Contracts are common in Canada for Trailer rentals and leases. For example, many trailer rental contracts charge a per kilometer fee for the trailer and an additional fee for each hour of engine run-time for the reefer or heater.
Because of competition in the market and the nature of the sales process, maintenance fees are often a very good option for the trailer renter to include in the contract. Rates are often at, near or in some cases below the true cost of servicing the trailer. In many cases, as rates charged to the renter do not vary materially with the age of the equipment and therefore the risk of equipment failure, maintenance contracts offer valuable insurance against unanticipated large costs. (Damage which is caused by the renter is the responsibility of the trailer renter.)
Servicing trailer rentals & equipment is expensive.
Servicing trailer equipment requires substantial up-front capital costs to build or sub-contract to a maintenance facility. There is also the cost and complexity of managing teams of mechanics and/or third party vendors. To service equipment requires holding and managing replacement parts in inventory and sourcing parts, which ties up your cashflow. Inventory shops can be more expensive than you expect, as they cost time and money in terms of inventory write-downs, shrinkage, and parts obsolescence.
In summary, we always recommend that trailer renters pay close attention to the maintenance contract components of any rental contract.
How does Trailer Link help with renters by keeping maintenance contract costs low.
By using our platform, renters can search for equipment providers who are willing to provide maintenance services. They can easily see and compare (assuming there are multiple offers) maintenance fees for semi-trailers and reefers. There is no need for someone renting a trailer to spend time acquiring complex quotes from multiple providers when Trailer Link does that for them. Trailer renters can be sure that the price they are paying includes both the base and the maintenance fee components (if they deem maintenance a requirement) and can easily compare quotes from multiple providers.
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