Businessmodel of Ryder System

Customer Segments

Ryder provides supply chain management solutions and transportation services to a broad customer base, primarily comprising small to large commercial enterprises across multiple sectors. The Company’s customers principally operate in the following sectors:

• Food and Beverage, including consumer packaged goods providers, food and beverage producers, and foodservice companies;
• Transportation and Warehousing, including transportation companies and delivery service providers, as well as commercial vehicle rental businesses and fleet operators;
• Housing, comprising developers, contractors, and agents involved in the development and construction of housing;
• Business and Personal Services, including various service providers, including facility management, leasing, outsourcing, and logistics companies; and
• Industrial, including various businesses, such as industrial manufacturers, natural resource companies, energy companies, and metals companies. Ryder also sells used vehicles to consumers and small businesses through its network of retail sales centres across North America.

Ryder’s principal market is North America, including Canada, Mexico, and the US, the latter of which is its largest single market. It also serves customers across Asia and Europe.

Value Propositions

Ryder provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as a reliable provider of supply chain management solutions, and having a track record for providing efficient transportation services;
• Its innovative solutions and valued-added services, with the Company providing a portfolio of innovative solutions backed by up-to-date technologies, and supplemented by various ancillary services, such as maintenance and repair;
• Its operational efficiency, with the Company utilising extensive distribution infrastructure, and having a large fleet of vehicles that allow it to provide services quickly and efficiently; and
• Its technical expertise and experience, with the Company employing specialist personnel across its operating segments, as well as a team of experienced industry executives. ### Channels

Ryder operates a website at www.ryder.com, through which it provides information on its various solutions and services. The Company does not appear to operate an online sales channel or customer portal for its core services. However, Ryder does operate an online channel for the sale of its used vehicles at www.usedtrucks.ryder.com. Additionally, Ryder sells its used vehicles through its own network of 59 retail sales centres across North America, as well as through a number of branch locations.

Ryder operates its own in-house sales force, organised by geographical regions and operating segment, through which it serves customers directly. The Company’s sales personnel operate out of the Company’s network of offices, including locations across the US, Canada, Mexico, Europe, and Singapore. Ryder also operates logistics centres in Michigan and Texas, through which its dedicated carrier procurement, contract management, freight bill audit, payment services, and transportation optimisation and execution groups operate.

Customer Relationships

Ryder operates an online self-service channel for the sale of its used vehicles, through which customers are able to browse vehicles and submit an interest in purchasing them, without interacting directly with sales personnel. Sales, however, must be completed via a representative of the Company.

The majority of Ryder’s services and solutions are provided directly through its sales, support, and consulting teams. These representatives work closely with customers in order to ensure that the Company meets the individual needs of each customer. The Company seeks to build long-term relationships with customers, with a view to securing itself as the preferred source for commercial vehicle rentals, fleet repair and maintenance, and supply chain management solutions.

Ryder provides ongoing support to customers, who are able to contact support staff directly over the phone or via an online contact form, receiving a personalised response to queries and enquiries. Additionally, customers are able to interact directly with Ryder through its social media accounts, including with Facebook, LinkedIn, Twitter, Instagram, and YouTube.

Key Activities

Ryder is engaged in the provision of transportation and supply chain management solutions to various industries, including automotive, consumer packaged goods, transportation and warehousing, retail, consumer brands, housing, and paper and publishing.

It organises its activities into three reportable business segments: Fleet Management Solutions, which provides full service leasing, commercial rental, contract maintenance and contract-related maintenance of trucks, tractors and trailers to customers in the US, Canada and the United Kingdom; Dedicated Transportation Solutions, which provides a dedicated transportation solution, including vehicles and drivers, to customers in the US; and Supply Chain Solutions, which provides a range of supply chain solutions, including distribution and transportation services to customers in North America and Asia.

The Company also operates a retail network for its used vehicles, including trucks, tractors and trailers.

Key Partners

Ryder works alongside a number of third-party companies and organisations in order to provide its customers with an efficient and reliable service. These partners include:

• Supplier and Vendor Partners, comprising suppliers of tools, equipment – including vehicles, and services that support and supplement the Company’s offerings, as well as company to which certain functions can be outsourced;
• Transportation and Distribution Partners, comprising a range of transportation companies and distributors that extend the Company’s own distribution reach and supplement its fleet of vehicles;
• Technology and Software Partners, comprising various software developers and technology companies that integrated and design functionality for the Company’s technology solutions; and
• Strategic and Alliance Partners, comprising a range of companies with which the Company shares resources and collaborates on joint projects. Ryder has recently launched a number of partnerships, including a partnership with Decisiv to create industry-leading maintenance solutions, and a deal with Lincoln Tech to provide training and educational programs. The Company also has a number of social and community partnerships, including with non-profit Soldier for Life – Transition.

Key Resources

Ryder’s key resources are its equipment and fleet of vehicles, its physical infrastructure – including offices and logistics centres, its supply chain and distribution channels, its partnerships, and its personnel.

Ryder owns and leases numerous properties, comprising vehicle maintenance and repair facilities, warehouses, logistics centres, and offices. This principally comprises properties across North America, as well as locations in the UK, Germany, Mexico, China, and Singapore. The majority of these locations are leased and may be a repair shop, warehouse or administrative office.

Cost Structure

Ryder incurs costs in relation to the acquisition and maintenance of its vehicles and equipment – including fuel purchases, the operation and maintenance of its physical logistics and administrative infrastructure, the management of its supply chain and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 Ryder’s cost of lease and rental totaled $2.15 billion, relating largely to its fleet of vehicles, with cost of fuel services amounting to $519.84 million. The Company accrued cost of services in the amount of $2.41 billion, and selling, general, and administrative costs – including professional fees, and the payment of salaries and benefits to its workforce of 33,100 employees – totalling 844.50 million.

Revenue Streams

Ryder generates revenue through the provision of various transportation and supply chain management solutions. This includes a number of business lines across its three operating segments, including but not limited to:

• Dedicated transportation solutions, comprising revenue derived from the provision of custom transportation and supply chain solutions;
• Commercial rental, comprising revenue derived from the rental of vehicles to third-party businesses;
• Contract maintenance, including revenue derived from the provision of maintenance and repair services;
• Fuel services, including revenue derived from the sale of fuel to customers;
• Distribution management, comprising revenue derived from designing distribution networks and managing distribution facilities. In 2015 Ryder generated $6.57 billion in annual revenue, down on the $6.64 billion recorded by the Company in 2014. The majority of the Company’s revenue was generated by its Fleet Management Solutions segment, which generated $4.55 billion in revenue for the year. The bulk of the Company’s remaining revenue was derived from its Supply Chain Solutions segment, which recorded revenue for the year of $1.55 billion.