← Lessons 16. Contracts and Conditions of Carriage

3. HIRED TRANSPORT

  • Hired transport provides flexibility and a range of options.

3.1 CARRIER

  • The simplest way to obtain transport is to use a professional transport operator to carry the goods.
  • The service can range from a dedicated parcels carrier to a heavy-haulage contractor moving an abnormal load.
  • A carrier using another operator to carry surplus loads is using a subcontractor.
  • Advantages:
  • No capital is tied up in vehicles by the sender.
  • Transport services can be increased or reduced quickly as demand changes.
  • No need for the customer to become involved in employing, training, retaining and managing drivers.
  • No need for the customer to deal with operator licensing arrangements for its own fleet.
  • A wide range of UK hire-and-reward hauliers is available.
  • Disadvantage:
  • Spot hiring can mean loss of direct control; the sender becomes dependent on the carrier and its staff to complete deliveries satisfactorily.

3.2 LEASING

  • Leasing allows a business to operate its own vehicles without tying up its capital in vehicle ownership.
  • Under a straightforward finance lease, ownership remains with the finance organisation.
  • The finance organisation takes advantage of any applicable capital allowances.
  • The operating business effectively has a long-term rental arrangement over the agreed vehicle life.
  • Main advantage: no large cash sum has to be found for outright purchase, and a competitive leasing price may be available.

3.3 CONTRACT HIRE

  • Contract hire is a specialised form of leasing used in the commercial vehicle industry.
  • In addition to providing the vehicle, the contract-hire company may provide:
  • Vehicle management.
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  • Roadside assistance.
  • Vehicles can be supplied in the client's livery.
  • Vehicles can be supplied with or without drivers.
  • If the vehicle is supplied with a driver, operator-licensing considerations are the responsibility of the contract-hire company.
  • If the hiring business uses its own drivers, operator-licensing considerations fall to that business.

3.4 RENTING

  • Renting is a short-term way for an existing operator to deal with peaks and troughs in demand.
  • Vehicles and trailers can be rented for the particular job in hand.
  • Drivers may be recruited directly on short-term contracts or through an agency.
  • For goods vehicles over 3,500 kg GVW, the operator must consider the operator-licensing implications.
  • If there is insufficient margin on the operator licence, an application may be needed to increase the number of authorised vehicles.