The business world is full of unknowns, but there are several ways leasing can help managers minimize transportation-related risks so they can focus on their core competencies.

Penske Truck Leasing provides a range of services, including helping customers spec the right vehicles and maintaining them throughout the life of the lease. Here are a few of the ways a full-service lease helps companies minimize risk.

Control Costs

Leasing provides a lower upfront capital investment and predictable monthly payments, which ensures there are no surprises that negatively impact your budget. "We've established what the financing costs are so there is no concern on what the long-term costs are going to be," said John Gorey, chief financial officer of Foundation Building Materials and a long-time Penske customer.

Along with greater predictability, leasing provides increased visibility into overall life cycle cost, allowing you to make more informed decisions regarding your future equipment needs. "It is the hidden costs that are hard to measure, but they make a difference," Gorey said. "It is one less thing you have to budget for." Leasing also frees up capital for use in a company's core business.

Improve Safety

As part of an overall transportation solution, Penske provides a comprehensive maintenance approach throughout the term of the lease. A rigorous preventive maintenance program ensures that the equipment is reliable and doing the job it is intended to perform, from the vehicle's in-service date until the end of the lease. That, in turn, helps you attract qualified drivers, promotes your brand, increases customer satisfaction and improves safety.

"The one thing I can feel fairly comfortable with is I'm not having accidents because I have improperly maintained equipment," said Doug Hanby, chief operating officer of United Furniture Industries.

Safety also protects the brand, reduces reputational risk and can limit liability. If you don't have a full-service maintenance operation covering your equipment, you're exposing yourself to potential litigation liabilities. When you have a reputable thirdparty provider maintaining the equipment and documenting every repair, you have something of substance to fall back on.

To ensure your entire fleet is optimized and running safely and efficiently, Penske offers comprehensive maintenance programs for customer-owned vehicles that still have a remaining useful life.

Increase Uptime

If today's high-tech vehicles are not properly maintained, a carrier or private fleet operator runs a higher risk of vehicle breakdowns, incidents or accidents. At a minimum, improper maintenance can result in missed customer deliveries and may tarnish your reputation. If left uncorrected, the consequences can be significant, including reductions in customer loyalty and associated economic drains on cash flow and growth revenue.

Numbers to Know, 2015

2,318,264

Total number of vehicle inspections

3,803,517

Total number of vehicle violations

653,479

Total number of vehicle OOS violations


Source: FMCSA, Motor Carrier Management Information System (MCMIS), data snapshot as of January 29, 2016.

In reality, even the best-maintained vehicle may need service or repair while on the road. Penske, through its dedicated, company-owned 24/7 roadside assistance group, provides hands-on experts to communicate with your driver as well as update your management team throughout the process until your driver and equipment are rolling again. In instances where the vehicle is temporarily inoperable, Penske provides a comparable substitute vehicle from its fleet of late-model units to minimize any disruptions to service.

If a replacement vehicle is necessary, the speed of delivery is crucial. "They are always responsive to get us a new substitute tractor," Gorey said, adding that the response time ensures the company is not late for deliveries.

What's more, Gorey pointed out, without the lease, the company would have to maintain backup equipment, which would add cost.

Protect CSA Scores

Over 2 million commercial motor vehicle inspections are conducted every year throughout North America, the Federal Motor Carrier Safety Administration (FMCSA)reported. A well-maintained vehicle minimizes the risk of a violation at a roadside inspection, which helps companies maintain their scores as part of the Federal Motor Carrier Safety Administration's Compliance, Safety, Accountability (CSA) program, which calculates fleets' safety ratings and determines which fleets warrant intervention.

Not only is an intervention time-consuming and potentially costly, but a portion of CSA data is public and can be viewed by customers, shippers and potential employees.

CSA scores are becoming more important to drivers as inspections now follow drivers for three years as part of the FMCSA's Pre-Employment Screening Program. While a number of violations ultimately come down to the driver's responsibility, some are dependent on the carriers and private fleet operators, which is making some drivers more selective about who they will work for. Private fleet operators with the best maintenance ratings are more likely to attract qualified drivers while simultaneously improving their CSA scores.

Obtain the Correct Equipment

To optimize operations and efficiency, it is important to spec the right vehicle for the application.

Penske Truck Leasing will sit down with you to examine historical data and understand routes, capacity, drivers and freight, ensuring everything is covered. With the facts in hand, Penske works with Original Equipment Manufacturers (OEMs) to build vehicles for optimal performance and fuel efficiency that meet your exact needs. Penske has the experience and expertise in multiple industries to find the right equipment for the job.

Full-service leasing also provides flexibility in the number of vehicles a company keeps. Whether it's new customers and unexpected growth, or just your busy season, you can easily and cost-effectively supplement your fleet with our rental trucks. Penske lease and contract maintenance customers enjoy discounted rates on Penske truck rentals.

Penske proactively supports you when you experience changes in your operations or increased customer demand.

Stay Compliant

Penske also monitors regulations, which helps ensure the equipment you are running is in compliance with state and federal regulations. "Smog requirements for our older vehicles change every year. They're pretty good at keeping us in the loop if we have to get rid of equipment or transfer it to another state. It helps us keep up with our fleet," Gorey said.

Focus on your Core Competency

If your business is like many others, transportation is not your core focus. Utilizing a lease helps you minimize the amount of time you spend managing and monitoring the transportation side of the business. Let Penske Truck Leasing do what it does best: take care of your fleet.

July 2016 / Updated May 2018

Improving safety has many tangible and intangible benefits for a fleet, including decreased costs related to accidents, minimizing losses resulting from fines for safety violations, increased insurance premiums and damage to corporate reputation.

To improve truck safety, managers can take a multipronged approach that starts with spec'ing the right equipment for the job. It continues by ensuring drivers are operating the equipment correctly and fleet managers are properly maintaining the vehicle throughout its life cycle.

Calculating the Cost of Safety

The Centers for Disease Control and Prevention (CDC) reported that accidents related to trucks and buses cost the economy about $99 billion a year. According to a study conducted by the U.S. Department of Transportation (USDOT), the National Center for Statistics and Analysis (NCSA) and the National Highway Traffic Safety Administration (NHTSA), the average cost of a commercial truck accident is about $59,150. The Federal Motor Carrier Safety Administration (FMCSA) reported that costs from a single catastrophic crash can exceed $1 million.

The visible costs of an accident, such as damaged equipment and cargo, are the most obvious. Yet the true costs can run much deeper. "The cost of negative publicity surrounding a crash can be devastating to a company's bottom line and reputation," says Chuck Pagesy, director of safety for Penske Truck Leasing.

Start with Safety in Mind

Penske can work with you to understand your challenges and specify the safety devices to assist in meeting your safety needs, including passive cruise control, collision avoidance systems, rollover protection and disc brakes.

"These are all technologies the customers can opt into, and they provide opportunities to reduce their accident expense and any liability associated with it," Pagesy says. In addition, on-board safety technology continues to improve at a lower cost, which can increase Return on Investment (ROI).

Invest in Drivers

While advanced technology is one tool to help improve safety performance, it can't do it all. The driver is still in control of the vehicle and needs to be executing his or her responsibilities properly.

Penske offers driver training to all full-service lease and contract maintenance customers, with classes at customer locations, Penske Truck Leasing locations and online. Penske Truck Leasing also offers peer management seminars where groups of customers can join together with Penske to discuss emerging regulations and safety issues.

Because there are so many hard and soft costs related to a safety event, the ROI for safety sometimes can be difficult to quantify.

Visible Costs

  • Cargo damage
  • Vehicle damage
  • Injury/medical expenses
  • Loss of revenue
  • Administrative costs
  • Rising insurance premiums
  • Towing and storage costs
  • Loss of vehicle productivity

Hidden Costs

  • Lost customers and sales
  • Employee disability costs
  • Cost to hire and train replacement workers
  • Risk to reputation
  • Public relations costs
  • Legal expenses

Maintain Vehicles

Properly maintaining vehicles through rigorous preventative maintenance (PM) ensures performance, which directly relates to safety. "Every time we do a PM, all safety items are checked," says Mike Hasinec, former vice president of maintenance support at Penske Truck Leasing. "Safety is just as important to us as it is to our customers."

Penske maintains vehicles at and above FMCSA regulations and provides fleet performance metrics to identify and assess risk. Penske also handles licensing and vehicle tax reporting to ensure fleets are compliant and track all aspects of maintenance and repairs.

Safety is Serious Business

Penske takes safety seriously. Implementation of safety recommendations can help reduce costs related to crashes. It also can lead to lower insurance rates, fewer claims and improved reputation. That's why Penske offers important safety programs as part of our core services, with no additional cost to customers.

July 2016