CED

February 2015

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February 2015 | Construction Equipment Distribution | www.cedmag.com | 41 DI: !e high capacity. For example, instead of a forkli$ being capable of picking up 10,000 pounds, it might be 12,000 or 15,000. Boom li$s, scissor li$s and fork li$s. Something that will either get you higher in the air or pick up more material. CED: What's driving the growth? DI: Some of it is application, such as wind farms. Some of it is fracking; this oil boom has driven capacity up. A lot of it is just trying to wring out the efficiencies. Make one trip instead of two. Use a forkli$ instead of a crane. CED: What are your views on best practices in age of the rental fleet and methods for rotating inven- tory, as well as units that best hold their resale value in the used equipment market? DI: We use a series of metrics to determine when a unit has reached its useful life, and they include fiscal age, actual age, high maintenance or extreme maintenance cost, how much revenue or yield we are able to get off the equipment. It's also technological, in the same way your cell phone might not have the features you want. !e equipment might become technologically obso- lete. You marry all those measures into one thought and make a decision. It's done at the serial number level. Each item is rated that way. If you have 10 forkli$s, you would run that scenario over each one. We believe that equip- ment can be aged anywhere from 48 to 60 months. !at's a big topic of discussion. When do you sell it? Some people believe you shouldn't suffer the aging maintenance and sell at 24-36 months. We believe equipment has a longer useful life than our competitors. Should I buy a new car or put in a new transmission? We keep equipment longer. Some of the others might make a case for trading it off. CED: Does your company use Like Kind Exchange as a strategy for replacingrental fleet units? DI: No. We don't use it at all. CED: What are some key chal- lenges for the rental industry in the coming year, including anything legislative that might be on your radar? DI: All of this sort of ties together – environmental issues, including emis- sions control, are a big challenge to the industry. A lot is legislative. Safety training and enforcement. Safety enforcement is handled by OSHA and the American National Standards Institute. ANSI pretty much writes the laws and OSHA enforces them. !is is a big one, the availability of training for technicians and drivers is huge. !ese young folks are not going into the blue-collar area. !at is going to be a huge problem nationwide for the rental industry. It already is. CED: Any hints about your company's growth plans for 2015? DI: We [had] a great year in 2014. We're seeing double digit increases in revenue and profits. We believe 2015 will be the same. CED: What's the reason? DI: !e rebounding economy, the rebound of commercial activity. !ere are a lot of projects on the drawing boards and a lot of things coming out of the ground in 2015. !e liquid national gas boom is generating billions of dollars. CED: Can you talk about the latest in rental technology? DI: Technology as an interface with the customer is real big. Every one of our competitors has ramped up capabili- ties, and so have we. NES owns most of the technology. We also partner with some vendors. We have developed a lot of technological resources. Real-time, near-paperless events, documenta- tion, reporting. You can rent online, make service requests online. !ere's real-time cellular notification – what is happening with your request. It's all about that real-time environment. !is includes the customer's ability to manage their own account online. You can look at all sorts of documenta- tion. You can look at history of the equipment. Every one of our drivers manages their delivery routes with an iPhone. Customers sign on with a smart phone. All of our sales people have iPad mini's. Also, we're not quite up to speed, but coming down the road is telematics stuff. It's where you proactively maintain the equipment. If I need the air filter changed, somebody out there makes it happen. !e dealer- ship calls us. We don't call them. >> RENTAL One rental trend on the rise: the need for higher reach (like the JLG 1850SJ) and heavier capacity, says NES executive Don Irwin. LORI TOBIAS is a journalist of more than 20 years, including time at the Rocky Mountain News as a columnist and feature writer and 10 years at The Oregonian. She currently freelances for numerous publications from her home on the Oregon Coast. She can be reached at ltwriter0815@gmail.com.

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