Southern Californians built the first freeway in the United States, but they certainly didn’t stop at just their neighboring counties. The connectivity of this megaregion makes it a perfect transportation hub for the west coast. Access to imports from the Pacific, agriculture, manufacturing, and technology all in one region makes transportation logistics a critical part of the SoCal economy.
This new decade has brought unique challenges for businesses like yours. To allow companies to adapt in this forward-thinking market, it was only natural for COOP to launch in the SoCal Marketin January of 2021. Our vehicle-sharing platform offers businesses a groundbreaking way to better utilize their fleet. Companies with idle vehicles can generate revenue by renting out their trucks, tractors, and trailers. While businesses in need of additional capacity can find the rental vehicle they need nearby.
Now that COOP has launched in Southern California, we’re here to help with our metric-based insights on transportation rental trends. Our market guide covers industry commercial rental demand and trends in key industries and how the 2020 pandemic has affected the SoCal market. Use this guide to make educated business decisions: when to rent to secure long-term freight, what industry seasonalities you can leverage to rent out your own idle vehicles, and how to get the most out of your fleet in 2021.
California businesses are surrounded by opportunity. The GDP of the state takes top ranking every year alongside entire countries. In 2018, it landed at the #5 GDP in the world in between the UK and Germany.
To match the growing economy, the transportation infrastructure of the market grew exponentially from 2018 to 2019. At the same time, medium-duty dry vehicles like box trucks and straight trucks made up most of the vehicle rental demand in 2021. Trucks are by far the most rented vehicle in Southern California making up over half the share of total rental days historically.
The growth trend saw a reversal worldwide in 2020 when COVID pandemic regulations impacted the economy deeply. Businesses like yours may be wondering how they can get ahead of the curve once SoCal reopens and bounces back in 2021.
In order to find profitable partnerships with COOP, know the industries that lead the SoCal economy to rent out your vehicles. Likewise, round out your fleet with rentals from industries that have extra capacity. When it comes to transportation logistics, businesses of all kinds can help each other out through simple supply and demand of vehicle specs.
The large Business & Personal Services industry accounts for the most rental days. Rent your idle vehicles to this industry almost year-round. Commercial vehicles are required by this sector for companies in engineering, office moving, and cleaning. Especially in L.A. County this key driver of the commercial vehicle rental demand has shown to be steady over the years we surveyed.
Outside of the city, the fertile Santa Barbara and Ventura counties have wholesale agricultural distribution commercial vehicle needs. So why is Food the #2 Industry in SoCal? California’s famous strawberry season and the tomato harvests drive much of the rental demand that we see. These crops make up a large bulk of the United State’s entire market supply of these vegetables amongst plenty of other key export crops.
The Event and Hospitality industries were affected more than most others by 2020’s COVID regulations. In 2021, the loss of big early-year events like Stagecoach and Coachella will definitely put a damper on traditional event industry rental demand. It’s still early in the year and much can change for businesses in affected areas like Riverside. Stay up-to-date with news that could help the industry improve. Innovations like Ticketmaster experimenting with a COVID-vaccine-verification-system, increased indoor capacity for personal care, and the gradual allowance of outdoor private gatherings could signal a return to normal. And, certain rollbacks on regulation promise to create a pocket in the event and hospitality space to start making a comeback.
Technology industry logistics demands are part of SoCal’s identity. Though Silicon Valley explains part of this, it certainly doesn’t make up all of the rental demand. SoCal based initiatives for home-grown innovation such as Tesla’s Megapack development in Ventura, and the Virgin HyperloopOne headquartered in Los Angeles create unique rental demand that could mean fleet utilization opportunities for your business.
If your business’ vehicles are idle during these challenging times, you can bridge the gap between periods when your vehicles are out and sitting and balance that with other industries’ seasonality.
As COVID regulations dial back and businesses work to normalize their operations, we anticipate a return to rental trends seen in years past with some notable differences. One thing that has kept consistent over the years is the kind of commercial vehicles seen on the road.
Frieghtliner and International take the top spots for the most rented vehicle makes. This is likely because of their history of being some of the most-recognized and sought after Brands for over the road excellence. Additionally, this is driven by the large amount of rental demand from many businesses that need trucks; however, trailers have the longest average rentals at around 22 days. Popular trailer models like Utility and Hyundai are sought after for their reliability and durability for these long-term rentals.
Reliability will gradually return to the marketplace of commercial vehicles in 2021. So what does that look like? As we take a deeper look, know that change is the real constant and adaptability to new information will be what’s best for your business.
When we look at rental demand seasonality we are gauging the needs of the market in the future based on the rentals from the past. To achieve this, we contrast year-to-year data with more specific monthly trends. Use this insight to anticipate what you could do to best navigate your fleet in 2021.
If your vehicles are idle, aim to rent out your tractors or trailers starting in March. Take advantage of the demand peak that extends through the mid-summer that would send your vehicles out on the road long-term, especially if you have refrigerated trailers or single-axle tractors. Doing so will maximize your utilization and offset expenses.
Rental demand is typically highest for all commercial vehicles around the Q4 holiday season, and we predict the same for 2021. Finding the right vehicles late in the season is typically very difficult, so don’t wait too long and miss out on reserving a vehicle when you need it for deliveries during this time. Get your vehicles early to reduce unnecessary delays during the holiday peak.
In 2020, final-mile deliveries became an increasingly critical part of the supply chain as ecommerce became more critical during the pandemic. This final-mile trend is expected to continue as the market increases its dependence on Consumer Packaged Goods for home or office delivery. If your business has dry box trucks or dry straight trucks, treat each day that they’re sitting in the lot as an opportunity to add to your bottom line. Additionally, as restaurants begin to operate closer to full-capacity in the summer, expect reefer truck rentals to be highly in-demand for direct food distribution.
Awareness of seasonal shifts can help you innovate your business’ operations. Be a part of California’s economic resurgence from the tough year of 2020. Use our truck-sharing platform to utilize your fleet when it experiences downtime and improve your business’ bottom line all year long.
Plenty of opportunities lie ahead for Southern California businesses. Your business will catch the inevitable comeback as the pandemic’s economic sanctions are soon-to-be lifted. New concepts like private gatherings and the return of events like Tomatomania promise a return back to normal in 2021. As companies adjust their logistics, there will be opportunities to generate revenue.
If your business’ vehicles are parked in the lot, adapt to a changing environment. Rent them out to other companies that need them during these times with COOP.
Know what to look for so that your fleet logistics will be ahead when the country and the world looks to California business owners to lead the way. Take the initiative, join COOP to help your business reach its goals in 2021.
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