Gulliver's growing its high end contract hire business

Bristol-based contract hire rental firm Gulliver’s Truck Hire is growing rapidly, and made the Top 20 in the 2015 CV Informer league table of top rental companies with almost 6,000 assets, up from number 27 in 2013.

Sales director Neil Jeremiah, pictured, says the company has grown from its south west of England roots to a “true national business in last 10 years”.

He continues: “We have invested more than any other rental company: £100m in 2015, £82m the year before and £76m in 2013. We were Scania’s biggest customer last year, having bought 600 R-series Topline tractors. We will order another 600 before the new model comes out. These are all for contract hire not rental - Travis Perkins for example will have 150 for its Wickes and BSS fleets.”

Gulliver’s is buying 140 Renault T Range tractors for its rental fleet, and also buys Daf LF 7.5 and 18 tonners.

“Around 35% of our fleet is now Euro-6,” says Jeremiah. “We are taking on 30 new vehicles a week. We replace 500 vehicles a year but we are also seeing significant growth. We have won a lot of business with local authorities recently.”

Primary concern

While purchase prices and residual values will always be primary concerns for any hire business, Jeremiah says that fuel consumption and driver appeal are also important to keep the customer satisfied.

“The Scania third generation R450 Topline is exceptional on fuel,” he says. “We care about fuel use – we are hiring high end equipment and we always consult the client. The vehicle can be with a customer for five years so good fuel efficiency goes straight to their bottom line.

“While the Scania may be dearer to rent than cheaper trucks the customer saves on fuel and gets a premium cab too.”

The huge deal with Scania is Gulliver’s “first adventure” with the Swedish truck maker, which is not renowned for dealing with the rental sector.

MD Philippe Harding, right, says: “Historically Mercedes-Benz has been the most robust truck and we have bought a lot of Actros. But they had a major blip on the new Actros with a number of transmission failures.

“They are taking it seriously and holding our hands but they have struggled to get replacement parts so we are having to provide replacement vehicles to our customers.”

A faulty air valve on the Actros gearbox has led to a slow loss of air pressure. While it is not a safety issue the OEM has been replacing the valves, but struggled to source these small but essential components.

Gulliver’s is strong in specialist markets such as municipal and utilities which value high levels of service more than the lowest price.

“We are the largest provider of vehicles to local authorities, but they make up a small proportion of our fleet – 1,600 of our 6,000 vehicles,” says Jeremiah. “We are Dennis Eagle’s biggest client. It is a challenging market but we see ourselves as the Marks & Spencer of truck rental – we have high service levels and are able to fund deals. We are a step above the spot rental market and we sell the whole life cost of the vehicle, not just a cheap rate.”

Whole package

Harding says that Gulliver’s target customers could already be contract hiring or leasing or still an owner operator looking to outsource for the first time. “It’s our job to explain the benefits of leasing versus contract hire with R&M,” he says. “We offer the whole package or a lease with a balloon payment at the end. They all benefit from our purchasing power – we buy very well.”

Much of the company’s recent expansion has been with existing clients taking additional vehicles or services. “We have seen lots of growth from our existing clients,” says Harding. “We are good farmers as well as hunters. We won’t win business on price but on service and added value.”

While the UK economy is clearly picking up, many hauliers are still not getting three to five year contracts. With 12 month deals now commonplace, contract hire is becoming ever more attractive.

“If confidence comes back to the market that might spur them on to buy but we have not seen that yet,” says Jeremiah. “We also give them the flexibility to return vehicles early.”

The company aims to keep tractors for between three and five years and rigids for five years - “we have to sweat the assets,” says Jeremiah. Municipal vehicles stay on the books for five to eight years because of their high capital value.

Gulliver’s owns around 600 vans, mainly for customers who like to use the company as a one stop shop for all their vehicles, and has recently acquired 400 trailers. “We have supplied 200 trailers to Travis Perkins/Wickes on a seven year term,” says Jeremiah. “We are also supplying some to The Entertainer and DHL .”

All Gulliver’s semi-trailers are 13.6m long and built by Lawrence David; around half the fleet are doubledeckers.

It currently operates from nine locations across the UK, all of which have workshops. While the new Scanias have been acquired with a three year manufacturer R&M package Jeremiah says the general policy is to do as much maintenance in-house as possible.

“We only use dealers where we have to,” he says. “That gives us a competitive edge. With our own workshops, our destiny is in our own hands – there is no queuing or London dealer rates. We also run our own breakdown service.”

Apprentices

Gulliver’s is also committed to growing the next generation of fitters – of its 370 employees, 20 are apprentices.

It is also looking to grow its depot network, and is actively scouting sites in Northampton, Leeds, east London and south Birmingham.

Having outgrown its Bristol base, Harding wants to relocate its main site to Avonmouth. “We can’t develop this site and Avonmouth offers better routes and lots of potential customers. We are looking for six or seven acres in Avonmouth. Bristol has a 20 bay workshop and we want more and to add a body shop. One of our workshops is an ATF now and there could be one at Avonmouth too.”

All nine locations offer spot rental, mainly to support Gulliver’s contract hire customers. The company is not yet employing drivers because it does not want to be seen to compete with its customers – but Jeremiah does not rule it out. “We may do it for a client who wants a full service – but getting drivers is a problem,” he says.

While it does not yet employ drivers, Gulliver’s is now training its customers’ drivers on how to get the best from the vehicles it supplies.

“All our fleets have telemetry,” says Jeremiah. “We are more like a consultant than just a truck rental firm.”

He says that telemetry has a dual purpose – data on how the vehicle is being driven is very useful for Gulliver’s customers operation while the Canbus data on the condition of the vehicle can be used by the R&M provider to diagnose faults and plan maintenance.

Gulliver’s is working on a new, improved fleet management system (FMS) making it even easier for customers to access all the documents they need to manage their vehicles. “Some want vehicle information daily – spend, time off road etc,” says Jeremiah. “Some clients want our FMS to cover their core fleet too and we could offer fleet management services to new clients who don’t contract hire from us.”

What’s in a name?

Gulliver’s was founded 54 years ago by Philippe Harding’s father Gabe, centre, who at the age of 82 remains chairman and still puts in long hours at the company.

Philippe’s son Oli has recentl

y joined the firm - after completing an autosports degree he is training to be an accountant – and Gabe’s other son – Nic Harding - is a director and business development manager.

How the company got its name is a nice story. The Harding family were butchers in Bristol back in the 1950s and one day a regular customer came into the shop and said the family was hiring a car to go on holiday. So Gabe sold the family car and bought two smaller cars to start a car hire business.

“His wife is French and was reading Gulliver’s Travels to help improve her English,” says Philippe. “She suggested giving the hire business the same name and it stuck. In six months it was bigger than the butchery business. Gabe then decided that hiring vans and trucks was less hassle than cars so gradually moved into commercial vehicle hire and gave up the cars.

“I am proud that we are still a family-owned business with the right ethic. We value suppliers as much as customers.”