Formed two years ago on the provision that it would become the exclusive ISOKIT distributor for Australia, Eurocold offers long- and short-term rental solutions for cold chain food businesses on a steep upwards growth trajectory.
The isothermal range it offers across all rigid vehicles currently in operation ranges from vans and utes, including 14-pallet jumbos.
Regarded globally as a market leader in innovation and technology, especially for its Isothermal solutions, Italian company ISOKIT, is a brand long synonymous with the forefront of temperature-controlled transport technologies.
Securing the exclusive distribution rights for the local market has been something of a master stroke by Eurocold Managing Director, Paul Piert, whose own background before forging a relationship with ISOKIT, was in the passenger vehicle rental market.
Last year Avraam Solomon joined the organisation.
Formerly, with Scully RSV, Avraam, brought with him a strong foothold in the food service and logistics space for refrigerated vehicles and a relationship with Isuzu Australia Limited dating back 25 years, making him a logical fit with the business. He serves as Eurocold Chief Executive Officer.
“The expectation from the ISOKIT Italian head office was to move half a dozen containers in the first year,” he says. “We’ve moved 21 containers and we have subsequently ordered a lot more than that for next year.” The decision by Paul to commit considerable investment to having stock on hand in Australia has proven to be another major accomplishment.
That move 12 months ago ensured Eurocold safe passage through a COVID economic climate fraught with uncertainty, helping to avoid transportation delays brought about from waiting on containers commonly moved on ships made to sail around Singapore where they can sit idle for up to two months before returning.
That investment, to date, has resulted in having an estimated $3 million worth of bodies on the ground at Eurocold’s Brisbane facility.
“In the normal trading environment that could have been less than half of that,” says Avraam. “But Paul took a position which has paid off and it’s also shown Italy that we’re committed to the Australian market.”
There’s perhaps no better time to establish a hire business than during a crisis or pandemic like the one which has wrought both economic and supply chain turmoil the past two years.
That vision now being realised by Paul is especially prescient in a market hesitant to invest in assets.
“That’s certainly the case in the food services sector with shutdowns and restaurants closing which all affects food services operators,” notes Avraam. “But at the end of the day they still need vehicles. Food still needs to be moved around.”
Indeed, it was the hire business that kept the Eurocold factory full and production going as the option to rent a vehicle for a year or two became an attractive proposition.
After the first 12 months of business the rental fleet has grown to 50 vehicles. By June 2022 they will be on track to hit 100. By mid-2023 they expect to have grown the rental fleet to 200 units.
The business, according to Avraam, has the capital and bodies to achieve that.
“We’re committed to growing our fleet. The mid to short-term goal for us is to get to 200 vehicles,” he explains. “We don’t have any of our vehicles sitting on the lot waiting for someone to come and rent a vehicle for one or two weeks.”
The Eurocold business, in essence, is really about partnering with food providers or logistics companies that want to rent a vehicle longer term.
When a truck emerges from the Eurocold factory it is destined, wherever it ends up, to go there for a minimum of between 12 months to four years according to Avraam.
Some of the best and biggest logistics companies in Australia are taking orders of the vehicles such is the quality of the Eurocold product.
For the part of key supplier Isuzu, Avraam couldn’t be happier with the support Eurocold have received.
“While everyone at the moment has stock shortages, we’ve stayed ahead of that with Isuzu. We’re still sitting on chassis which should see us out until June,” he says. “Moreover, we’re ordering more for the second half of next year. Let’s just hope Japan keeps giving them what they need.”
Aside from the small fleet of F Series Isuzu trucks it offers its rental customers, Eurocold leased 11 Isuzu vehicles into JD Refrigerated Transport late last year that are delivering Ingham chickens into a fast food chain.
“We gave them everything that they wanted and they’re rapt,” says Avraam, who, as it happens, worked many years ago with JD Refrigerated Transport Managing Director Joe Joseph.
The 11 Isuzu FVLs recently deployed into JD Refrigerated Transport are specified as 12-pallet trucks to go into local distribution as volume increases of foods in the fast food sector are felt right across the market.
Something similar is also going on in the burgeoning home delivery sector — another sector on the up for Eurocold. While last mile delivery for the supermarkets is booming, the other home delivery domain seeing a revival is the prepared meals sector.
Youfoodz recently came on board as a client for Eurocold.
Youfoodz, according to Avraam, is particularly pleased that they can rent these vehicles over a specific period of time.
“They might start with a two-pallet truck but a year into it they might need a six-pallet truck,” he says. “We’ll take back that two-pallet truck and deploy it somewhere else and give them a brand new six-pallet truck. That way they’re not stuck worried about how they are going to dispose of assets or when they’re going to lose money or make money. We take all that headache away.”
The vehicles are fully maintained by Eurocold who have installed tracking devices in each.
It not only gives them tracking of the vehicle and the chassis but a temperature control around the vehicle right across the delivery cycle so they can give their clients assurance that the temperature of the product that they’re carrying is protected the whole way.
It’s not uncommon for Eurocold to have up to four cameras on its long-term hire vehicles, a specification requirement as it turns out.
“The word flexibility for us has become part of our culture and what we do,” says Avraam. “There’s a lot of truck bodybuilders in Australia that can sell assets and there’s a lot of banks who will finance our customers, but they will not give them flexibility. If you go to a major bank and you buy your asset and even put it on a chattel mortgage for five years, you can’t go to the bank two years in and ask them to take it back because you want to buy a different one.”
Flexibility also comes in the form of the ISOKIT isothermal body that, at present, boasts the highest K-factor – the capability to hold temperature and pull it down – in the Australian market. The body itself is approximately 18 per cent lighter than the nearest competitor’s truck body.
To build something that has got the best K-factor but also weighs considerably lighter improves, among other selling points, payload.
“Isuzu already gives us a good payload but by putting a lighter body on top of that it might mean another 300 kilos which is enough to sway a customer knowing they can maximise their loads,” explains Avraam.
“We’re the only bodybuilder in Australia that can give a five-year warranty on the floor. The technology around how the floor is manufactured in Europe and is tested gives us an advantage. Being able to give a five-year warranty on the floor is not normal and we’re very proud that we can give that. Forklifts drive into the back of trucks all day long but they’re not all built the same and not all of them can handle a forklift driving on them every single day and we know that our floor can handle it.”
With less body weight the customer is outlaying less on fuel, saving on wear and tear costs for their fridge unit and increasing their payload.
Fridges, under these friendlier conditions, don’t have to work as hard and generally last longer.
The benefits, in other words, speak for themselves.
The advantage in Eurocold having at once ISOKIT and the body building business enables it to better control the production inventory of what’s going to go into the rental business.
“We don’t depend upon a manufacturer or a body builder to deliver us a vehicle specc’d how they want it on time. We’re in control of that. That’s the advantage. We’re not dependent on a third-party provider,” says Avraam. “We know what stock we’ve got and we allocate that well in advance so we can guarantee the supply for a rental customer.”
The confidence in the Isuzu product has been built over a quarter century for Avraam, who for 20 of those years was an end-user in a food wholesale business.
Given customers already have the buy-in on what remains the market leading brand, it also makes it easier, too.
There’s no hard sell required of the customer.
They know Isuzu is an established brand in the market synonymous with reliability.
“For us it makes sense because it’s the perfect partner,” Avraam adds. “When they tell us they have chassis put aside for us we know they’ll be there in two months-time. We know the product development is there and that it cycles every five years. They’re also competitively priced. As a buyer we always want to pay less. You’re getting a really good product and you’re getting it at a reasonable price. They’re the factors we’re looking at – the reliability, the payload and the price. Isuzu really tick all those boxes for us.”
Eurocold’s Isuzu product offering is split between the FVL and FVD range mated with a full-automatic Allison transmission.
The wheelbase is ideal for 14- and 12-pallet vans giving them an optimal payload.
“The FVD is a great vehicle for loading docks as it sits higher than a lot of the competitors,” says Avraam, noting its versatility.
“A lot of people only want a 10-pallet truck. With the supermarkets going through what they’re going through we’re seeing a big increase in 10-, 12- and 14-pallet vehicles. It’s been good for us.”
And demand is only set to increase according to Avraam.
Activity over the next two years, conservatively speaking, will only grow to the point that every truck, before it comes out of the Eurocold factory, will already have been allocated.
“It’s keeping our pipeline full. Even if we’re building stock trucks we know that once we’ve got them ready to go that the market is taking it,” he says.
“Even if the supermarkets are not investing in every single asset themselves we have seen a big increase in contractor work and the contractors are looking for good reliable assets quickly.”
For the moment Eurocold is seizing the opportunity while it can.
Being that the business is very focused on long term rental and relationships, the future, at least in the short-term, is likely to hold expansion plans as the company looks to partner with more dealers across the country.
“Australia is only growing and the supermarkets are only growing and they’re going to need more trucks,” says Avraam. “It’s probably not a bad time to be building refrigerated trucks.”