Ryder loyalty program payoff: reduced used vehicle prices

Ryder has a brokerage division. Ryder also sells used trucks, thousands of them every quarter.

The company is putting those two parts of its business together to create a brokerage segment loyalty program that instead of the usual rewards of anything from gift cards to televisions offers points that can be used to slash the acquisition price of a used truck.

Those trucks are being sold by Ryder’s Fleet Management Systems division, its core leasing business that last quarter disposed of 5,100 vehicles, everything from Class 8 tractors to smaller vehicles.

The beneficiaries of the program would be carriers that move freight for Ryder’s brokerage (NYSE: R). As they meet various criteria, they would accumulate points on the road to get a discount on a used vehicle purchase from Ryder that tops out at 22% of the vehicle price.

“We feel like we are bringing this to the table to be a differentiator,” said Kevin Clonch, the director of transportation at Ryder’s Supply Chain Solutions group, which is where the brokerage unit is housed. “We’re helping carriers grow and helping our most strategic partners with a discount they can’t get off the street.”

Although Ryder made the formal announcement of the new brokerage loyalty program last month, it had been operating for several weeks prior to that. Clonch told FreightWaves that the program had 91 “carrier partner drivers” taking part in the program who had already accumulated a total of 55,000 points. 

In a follow-up email with FreightWaves, a spokeswoman for Ryder said a dollar to points equivalency is not set by the program 

“Rather, the number of points a carrier accumulates establishes where they rank among Ryder’s top carriers for that year, and the tier ranking determines the discount,” she said. 

That schedule for the program said the criteria for earning points included several measurements, such as on-time percentage and the number of loads run in a calendar year. 

The accumulation of points and what those points can buy varies widely. Data supplied by Ryder said the tier 1 carriers for its brokerage unit can earn a 22% discount on a vehicle. The definition of tier 1 is based on the points a carrier accumulates. 

Tier 2 carriers can earn a 15% discount, and all other carriers can earn a 5% discount once they rack up at least 500 points.

“You can get that 5% discount almost immediately once you haul your first handful of loads,” Clonch said, adding that there have been companies that already qualified for that 5% price reduction.

“The key to this loyalty program is the tier ranking,” the spokeswoman said. “Each carrier is notified of what tier they fall into and are sent appropriate codes that will last for that year.”

videojs.getPlayer('1758095712347659638').ready(function() {
var myPlayer = this;
myPlayer.pip();
});

videojs.getPlayer('1758095712347659638').ready(function() {
var myPlayer = this;
myPlayer.on("loadedmetadata", function() {
var browser_language, track_language, audioTracks;
browser_language = navigator.language || navigator.userLanguage; // IE <= 10
browser_language = browser_language.substr(0, 2);

audioTracks = myPlayer.audioTracks();
for (var i = 0; i < audioTracks.length; i++) {
track_language = audioTracks[i].language.substr(0, 2);
if (track_language) {
if (track_language === browser_language) {
audioTracks[i].enabled = true;
}
}
}
});
});

She added that the carriers also are informed during the year what is necessary to achieve a particular tier.

The points-based program for acquiring discounts on truck purchases did not replace an earlier offering, Clonch said. Ryder had no loyalty program previously.

Clonch said the points can be earned by a fleet or an individual owner-operator. But he added that 90% of the brokerage segment’s carriers are less than 10 trucks.

The loyalty program is being undertaken in conjunction with Trucker Tools and its driver-focused app. Ryder’s brokerage segment already was operating on the Trucker Tools platform.

Another way of earnings points besides volume and performance is through tracking, and that involves the Trucker Tools app. Clonch said a driver can still obtain points under the loyalty program without using that app, by racking up trips and meeting service level goals, “but really what you’re missing is that third tier, where you can grow your points through the tracking.”

Clonch said Ryder’s brokerage segment had mostly been focused on securing capacity when its Dedicated and SCS divisions needed it, rather than operating as a stand-alone brokerage that could book capacity for any individual client. But he said the “aggressive strategy kicked off in early 2020. It was to take our freight brokerage and make it more mainstream.”

The segment last year purchased or executed $10.7 billion in freight moves for its customers, according to a Ryder spokeswoman. 

The current trucking market is not strong for “rapid expansion,” Clonch said. “But when you think about their ability to accumulate these points, if the carriers want to continue to expand their business, this gives them an avenue they can’t get anywhere else.” 

Ryder does not disclose an average used sales price for its vehicles in its quarterly earnings report. It sells a wide variety of vehicles, from vans to Class 8 tractors, so a single average number would not reveal much.

More articles by John Kingston

Ryder’s nonleasing activities grow revenue but FMS provides profits

Ryder’s debt rating upgraded by S&P

Golfer Sam Ryder the face of Ryder System ads after famous hole-in-one

The post Ryder loyalty program payoff: reduced used vehicle prices appeared first on FreightWaves.

Source: freightwaves - Ryder loyalty program payoff: reduced used vehicle prices
Editor: John Kingston