Better Roads Digital Magazine
Issue link: https://read.dmtmag.com/i/85910
ent solutions. NES points out that a contractor may need a 40-foot lift for one job, a 60-foot lift for another, and an 80-foot lift for still another. You don't have to use an inefficient machine just because you have it on hand. And rental companies are con- stantly evaluating their fleet mix. For example, backhoes may have been hot a few years ago, but instead of just replacing backhoe for backhoe, rental firms can opt to buy another machine instead. "It's as much about getting the right fleet as it is about replacing the old fleet," Flannery says. As an example, United Rentals has targeted its earthmoving seg- ment to grow from 14 percent to 20 percent of its total fleet mix. Being able to concentrate on what you do best – build. Servicing equip- ment may not be your core com- petency and you may find keeping skilled mechanics on hand trouble- some. Another thing to consider: will you be able to update their training, especially in light of Tier 4 engine maintenance complexities? Rental firms say they can handle these is- sues. For example, aerial-lift rental provider NES has a two-hour service call window: Call at 10 a.m. and a service tech will be there by noon to assess if it can be fixed on site. If a machine has to go back to the shop, another unit is called in. New areas, same service. National rental companies argue their pro- cesses make it easier for contractors to go after jobs outside their normal geographical areas – accounts and service are in place and renting eliminates the transportation costs you would incur hauling your equip- ment to a new locale. You don't have to decide right now. Rental purchase options, a popular alternative especially for heavier machines, give you the flexibility to delay the purchase decision. Opt to buy 90 days later and a portion of your rental will be applied to the purchase agreement. Opt out, and it becomes a straight rental. Reliability. "Contractors are now hypersensitive to downtime, be- cause if they win the job, they need to get the repeat business, and any downtime becomes even more expensive," RSC's Roth says. And while rental companies still keep a sharp eye on fleet age, they also say their maintenance standards keep their fleets functioning at a high level. Even age can be misleading, though. NES's core equipment – scissors and booms – don't age like earthmoving equipment. A scissor will rise to the work area and then be shut off for most of the time a person is working, as opposed to a dozer running an eight-hour shift, says Chris Bowers, NES senior vice president, customer strategy, sales and marketing. Efficiencies. You can take advantage of the inherent efficiencies of rental companies have in managing large, diverse fleets, says Cat's Gustafson. "It's a standard expectation in the rental industry, for instance, that we're good at pickup, delivery and invoicing." And rental companies have systems to help you efficiently manage your rental option. NES sends out an email to customers upon delivery. United Rentals gives its customers a scorecard of how the company has performed in key metrics measured on a daily basis. RSC's Total Control software allows higher rental volume users to track and control rentals via a smart phone or computer. Overall lower total cost. "People perceive rental as a higher cost, but in reality, it's a much more efficient model," says RSC's Roth. Consider all your ownership costs – maintenance, parts, transportation, insurance, etc. – when you look at a per-hour rental rate. But do know that rental rates in most areas are rising – they rose 4 to 6 percent last year and are expected to continue to rise another 5 to 6 percent this year. Rental companies are quick to point out, however, that rates dropped around 20 percent dur- ing the downturn, and are still not at 2006 levels. Another factor that will up rates: Tier 4 engine costs that have increased new equipment prices 8 to 10 percent. Manage emissions requirements. Rental is one way to both get newer, emissions compliant machines into your fleet, although the demand for Tier 4 rental machines to meet regulations is still in the early stages. RSC's E2T emissions tracking pro- gram allows renters to calculate emissions for their equipment rentals. In addition to meeting regulations, E2T can help prove compliance with a client's sustainability goals. v Current/normal workload* Current Less than 6 mos. 6 mos. to 1 year 31% 1 year to 18 mos. 6% Normal Less than 6 mos. 14% 6 mos. to 1 year 1 year to 18 mos. 25% 47% 57% We asked our readers to compare how much work they currently have on the books with how much they normally have. Work uncertainty is one of the primary reasons cited for rental growth. *September 2011 survey, 301 responses Better Roads February 2012 31h