Make sure both the rental company and your staff know where equipment should be dropped off, who should be contacted with any questions and where it can be picked up at the end of the rental term.
Check to ensure your paperwork with the rental companies is current to avoid having your reservation put on hold while you get it updated.
I am glad to report that construction work in the Midwest is finally picking up compared to the previous four or five years. The first quarters of the last couple of years were dismal. Yet, even though Chicago had the worst winter in a decade, my equipment rental numbers are well in excess of budget for the first quarter of 2014.
Quite frankly, I didn’t believe what I was seeing on my utilization stats. Taking the weather into account, I could not imagine anyone working outside in those conditions. But no matter the reason, rental utilization was high, and I will take it. It’s about time.
I guess I can also conclude that if a city in the state of Illinois is seeing an increase in construction work, the rest of you must be at least at a similar level of activity if not more. Good for you! So, am I correct in guessing you think it’s about time, too?
Now that work is picking up, I have to advise contractors to review their procedures for obtaining rental equipment. Needless to say, activity on the rental front is brisk, and if you don’t know what is happening on your jobsites, there will be problems on the work front.
Make Sure You’re Up to Date
Your paperwork on file with the rental companies must be up to date and meet contract requirements. It would be in your best interest to place a call to find out what is needed to keep your file active for the entire busy season. Most rental companies require an annual credit app, an insurance certificate and a valid credit card on file.
When you make that call, you might as well review your account with the AR department to make sure you are current and not on “hold” status because some issue has not been attended to.
The point here is when you place an order for a rental unit this year, you do not want to have the reservation put on hold because your paperwork or account status is not current. In this environment, it would be too easy to lose the reservation while you are chasing around to get it updated. Believe me, it will happen.
As long as we’re talking about AR, take a moment to reflect on whether you were slow to pay the rental companies during the recession because “you didn’t have to.” Now, when you have four contractors chasing the same unit, guess which one is going to get it? The company that pays within the contract terms. It would not be unusual for rental companies in this current environment to “fire” slow-pay customers because they no longer need them to fill rental slots.
As you can probably guess, rental rates will be increasing annually until they catch up to where they need to be based on the cost of new equipment. During the recession, rental companies had to work with their customers because we were all working with skinny margins. The margins stayed skinny and the rates low even though the cost of the equipment increased every year. To say we are a little behind on the rates is an understatement. Contractor margins must be picking up, because nobody is complaining (much) when we tell them rates increased for 2014.
Have Procedures in Place
Make sure you review your procedures on how to order equipment and verify the order for time, place and type of equipment required. In particular, it should be very clear where the unit should be dropped off and who will be on call to answer questions at 5 a.m. when the delivery is being made. The same goes for when you call off the rental unit. Get it to where it can be picked up and make sure it is fueled, if that’s what is called for in the contract.
Consider the condition of the unit, both when it is delivered and when it is picked up. Taking pictures is a good idea, and many rental companies are starting to do that as part of their general procedures.
Make sure all of your employees are aware of how the units work and what will damage them and generate a repair bill that you have to cover. I have to say, I sometimes wonder who the heck is running these rental units, because they come back destroyed with the contractor saying they didn’t do it even though the pictures say differently.
This is not the year to play games with the companies that have the assets you need to complete quality work on time, unless you’re planning to buy your own fleet of equipment — which may neither be possible or smart. Get your house in order to reduce field headaches, as well, since this could be the year for you to finally make a buck.
Garry Bartecki is the managing member of GB Financial Services LLP and VP Finance for the Associated Equipment Distributors. He can be reached at (708) 347-9109 or firstname.lastname@example.org.