Based in St. Louis, XTRA Lease is a service-oriented trailer equipment lessor, providing custom-made rental, lease and lease/purchase packages. With 90 locations and 600 employees in the United States, Mexico and Canada, XTRA Lease offers a fleet of trailers that includes dry vans, flat beds, refrigerated and specialty equipment. A division of XTRA Corporation and owned by Berkshire Hathaway, XTRA Lease provides companies with a range of solutions designed to control fleet transportation costs, manage equipment assets and match equipment needs to freight volume.

XTRA Lease needed to ensure its competitive edge by providing the best customer service possible, and that meant making credit decisions as quickly as possible. "We needed to better serve customers that wanted to rent our trailers immediately," says John Pomilio, Vice President, Customer Financial Services, at XTRA Lease. "Two-thirds of our business is immediate; the other third is long-term. Customers have freight they need to move right away, and we can't afford to wait one extra minute for a credit approval decision." After a period of due diligence, Pomilio selected eCredit, the latest suite of Web-based credit applications from Dedham, Mass.-based eCredit.

"eCredit allows us to approach instantaneous response levels regarding customer risk potential," says Pomilio. "It also adheres to much more consistent decision standards than a human-driven, manual process. It looks at every customer the same way and with the same set of criteria which we were able to define based on our own credit policies."

XTRA Lease's implementation of eCredit provides automated decision support, credit scoring and management of its 15,000 customer portfolio. Every customer's credit facility is reviewed at least once a year, and eCredit takes a nightly read of customer credit limits expiring in the next 30 days to processes those customers through scoring models and update their credit limits. Also facilitating smoother portfolio management for XTRA Lease's decentralized credit department is the fact that credit details are available 24 hours a day, 7 days a week; in this system, managers need only a laptop and a connection to the web to access customer data. Using an eCredit XML-based application programming interface to integrate directly into the XTRA Lease branch network, transaction processing time for credit requests received directly from a branch have been reduced to less than one minute. "We're already receiving feedback from the field about how fast the new solution is," says Pomilio. XTRA Lease began its credit scoring initiatives seven years ago, with software that Pomilio says was state of the art at the time. "At best, we could score an account and get a response in 15 minutes," he says. "But that speed was predicated on the use of credit data that we had to purchase from our data provider, and it's still not nearly as fast as eCredit."

Pomilio's team forecasted three years past the implementation and were pleased with their expected ROI. "We found that with eCredit, we would go positive in the first year of the project," says Pomilio. "That kind of breakeven calculation is impressive, especially when you consider that we incurred the entire cost of the implementation in year one. Subsequent years are all upside, which provides for a tremendous ROI."

To date, considerable gains have already been realized; both quantitative and qualitative improvements have been made in credit data procurement, as costs have fallen 60 percent from a year ago, and XTRA Lease now has access to higher quality data as well. Additionally, using eCredit, a decentralized credit department with one fewer staff member is now able to work more productively to eliminate accounts with expired credit limits, resulting in a 50 percent decrease in over-credit limit accounts.

"The hard metrics - those that we could attach a dollar to - included improvement in bad debt, reduced labor costs through automation, and of course the reduced credit data costs," Pomilio says. "Soft metrics include the less quantifiable upside benefits we realize through improvements in customer service which result from more rapid response time."

Although some of eCredit's customers choose to the solution on their own servers, XTRA Lease opts to deploy the credit processing modules in an ASP mode, hosted by eCredit in their state-of-the art facility. "eCredit's technology is very strong," says Pomilio. "But what really distinguished eCredit was that I knew their people understood credit. The implementation went smoothly, and in comparison with our old system, eCredit is a joy to use. eCredit has allowed us to get the most from technology while maintaining our grass-roots business approach. I cannot stress enough the importance of having a web-based credit approval system in our decentralized sales environment. eCredit allows our people to be out with customers, where they need to be."