July 25, 2012

Ice Distribution Company Weighs Leasing, Rental Costs Over Ownership

Brian Washnock, Summit Ice President

Ice manufacturing and distribution company, Summit Ice President Brian Washnock looks at how the company manages its mix of owned, leased and rented fleet, and more importantly, how he gets the ‘peace of mind’ that his drivers and trucks are safe.

— By Joanne M. Tucker

Managing a company that has its peak business during one season of the year has resulted in a mix of lease and long-term rental plans for Summit Ice, a Salt Lake City-based ice manufacturing and distribution company.

According to Summit Ice President Brian Washnock, at its highest peak in the summer months the company has a fleet of 15 trucks, which are leased and rented through Ryder and Penske.

“Whether you own the vehicles or do year-round leases, you’re stuck with a lot of the equipment all-year round, and it may or may not be getting used — so that is the challenge we face,” Washnock says, adding that the rented trucks are typically used for four to five months out of the year. The company also now has a commercial cold storage business to help with the off season.

At any given time, the fleet includes at least eight International and Freightliner 36- to 48-foot tractors, and then the rest of the fleet includes all International 18- to 20-foot straight trucks with reefers. While the company owns all its reefers and trailers, and two tractors recently acquired from another ice company, the remaining trucks are rentals or are on full-service, closed-end leases.

Vehicle Ownership: ‘It’s Just another Animal’

The two trucks that Summit Ice owns needed extensive maintenance work when the vehicles were first acquired, Washnock says, adding that he is tracking all the maintenance work done on these two vehicles, which are serviced by Ryder, to see what kind of maintenance plan would be necessary if Summit Ice owned its fleet and if it would be worth the maintenance costs.

“Who is to say that we would fix something or maintain something that we really don’t know anything about or have expertise in? Well, the truth is, we probably wouldn’t,” Washnock admits. “Like what a lot of small fleets probably do, we would wait until it breaks.”

Washnock says that he trusts the preventive maintenance intervals done by Penske and Ryder and that he likes getting new equipment on a regular basis. “By doing a full-service lease, I get the peace of mind that the maintenance is all done for me,” he says. Summit Ice is even considering replacing the two owned trucks with leased tractors once they’re sold off.

A main concern for Washnock in owning and maintaining his fleet, which sees an average of 50,000-60,000 miles per year-per vehicle, are the initial costs it takes to get a preventive maintenance program off the ground. Though, he notes that once the company has matured there’s a possibility it would own a majority of its fleet and rent summer fill-in equipment as necessary. “But with it being our fourth or fifth year, I’m just not prepared,” he says, adding that managing the company vehicles is akin to managing an additional business. “It’s just another animal.”

The breakdowns Summit Ice does have to worry about are on the refrigeration units, not its fleet.

(To read more about small fleet preventive maintenance, click here for "How to Start a Preventive Maintenance Plan for a Small Fleet.)