New, Used, Rental
Better Roads Staff
Reliability. “Contractors are now hypersensitive to downtime, because 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 during 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 program 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
Less than 6 mos. 57%
6 mos. to 1 year 31%
1 year to 18 mos. 6%
Less than 6 mos. 14%
6 mos. to 1 year 47%
1 year to 18 mos. 25%
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
Late-breaking news: In a $4.2 billion transaction, United Rentals has bought the number-two player in the rental market, RSC Holdings. United Rentals says the buy creates a company with “more attractive business mix, greater scale and enhanced growth prospects.” In addition, the combination will accelerate United’s growth with industrial customers and “provide a lower cost base and less volatile revenue profile to better position the company through all phases of the business cycle.”
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