In today’s construction environment, the name of the game is agility. With concerns about labor and job complexity, contractors are constantly looking for ways to make their businesses more nimble and profitable. Utilizing rental equipment is a cornerstone of building and maintaining a versatile organization. The following examines essential elements of the typical construction rental decision-making process.
When to Rent
Renting equipment is a small but central, part of any project. If a critical piece of equipment is not available, it can result in idle workers, projects falling off schedule and evaporating profits.
Working with mixed fleets of owned and rented equipment is how most contractors do business. There are multiple criteria to evaluate when approaching the decision to buy or rent equipment. Purchasing construction equipment often requires large down payments, diverting a significant portion of a company’s capital. Additional expenses associated with ownership include insurance, taxes, licensing, interest on loans and paying for a storage yard. Renting provides the opportunity to reduce capital expenditures and reallocate those dollars to higher return on investment (ROI) activities, such as technology.
When renting, contractors pay only for the equipment they need, for the amount of time they need it, so a firm doesn’t invest in buying machines that will only see a short period of use. Flexibility is the most important reason contractors choose rental over ownership of equipment, according to a survey by Wells Fargo Equipment Finance.
Another factor is transport. When a company owns its equipment, it is responsible for hauling the equipment from one jobsite to the next, as well as for storage between jobs. Rental companies can get equipment to new worksites quickly and efficiently, using computerized maintenance programs and GPS systems to keep tabs on location, status and service needs.
An additional benefit of renting equipment is that rental companies upgrade their fleets on a regular basis, providing access to the most advanced gear. This gives contractors an opportunity to not only work with the very latest equipment models, but also to become deeply familiar with it before deciding whether to buy.
Who to Use
When assessing rental providers as a source of supplemental equipment, contractors should adopt a business-centric approach. The evaluation should examine whether the rental company can provide the equipment most likely to be needed for core projects; the depth of the company’s fleet; and equipment delivery and availability. Here are some other items to consider:
- What you need—Construction work is fast-paced, and having access to different types of equipment has a major impact on project success. Rental companies have a broader inventory of equipment than a single construction company could possibly own, including attachments to tailor gear for specific tasks. Continual rental fleet upgrades also make it easier for contractors to keep up with compliance and standards like LEED, WELL and RESI. In addition, rental inventories often have specialized equipment, including temporary power and climate control, pumps, trench safety solutions, and more. Some rental portfolios also offer on-site services, such as tool management, portable restrooms and hygiene stations. Working with a rental company that has a wide product offering can reduce time spent sourcing equipment and eliminate invoicing from multiple suppliers. Increasingly, equipment rental companies are including advanced technologies, such as drone services and wearables in their offerings. While adoption of both technologies is still low in the construction industry, early users say the technologies have a positive impact on their jobsites, according to a Dodge Data & Analytics report.
- When you need it—Managers are expected to keep productivity up no matter the circumstances. Most rental providers can deliver equipment on schedule but, while useful, it is only table stakes. Contractors need to explore whether they can rely on their rental providers to meet unexpected needs, such as disaster response and power outages. For example, seasonality. A contractor may operate in a region that experiences a rainy season. These weather conditions can create short-term equipment requirements for dehumidifiers, pumps and portable generators with time-critical delivery. In these situations, contractors don’t want to be shopping for a provider; they need an established partner they can trust.
- Where you need it—A construction company does not have to be large to have simultaneous jobsites in multiple cities, towns and even states. When you cover more ground, it means moving owned equipment between jobsites, and that creates more expenses: trucks, trailers, fuel, insurance, and outlays for drivers and training. It can also create more opportunities for safety hazards or violations. Once projects and facilities are up and running, it can be even more difficult to predict equipment needs in advance. When unexpected needs arise, local support becomes an important consideration. It can be costly to manage owned equipment over long distances; even a small delay can have a ripple effect on a project timeline. Proximity to rental equipment fleet and maintenance equates to a more immediate response.
Beyond the Equipment
When evaluating equipment rental providers, contractors should look for capabilities beyond just the actual equipment. Just as construction firms rent equipment to make jobsites more productive, rental companies must offer ways to contribute to contractor productivity. This includes fitting into mobile work environments, tracking key performance metrics and advancing training and safety capabilities.
Tech-enabled smart jobsites are increasingly becoming the norm among contractors. Today, equipment fleet management must fit into the mobile work styles of construction managers, providing detailed, actionable information while they are on the move—and they must also do it in a secure way. Mobile tools and technologies can provide jobsite visibility from a bird’s-eye view, so managers know what equipment they have at multiple sites and whether it is being utilized. They enable data-driven decisions that maximize utilization of equipment and control costs. This also reduces waste and duplication.
A good rental strategy can deliver real savings to a construction company. It is worthwhile to measure and quantify those savings; for example, by tracking utilization on a per-unit basis, you can avoid paying for equipment beyond the point when it should be taken off rent. Don’t miss an opportunity to benchmark your company’s performance with industry peers. Contractors can score their equipment utilization against industry benchmarks, pinpoint improvement opportunities and quantify the dollar impact to make the most of their budgets and profits.
It is important for contractors to keep their crews trained, certified and safe, above ground and below. This is a priority on any project, and—in many cases—it is the law. It starts with finding the right training and certification resources. An equipment rental provider should help to reduce the overall cost and complexity of training and credential tracking. Ask to speak with your provider’s safety experts—certified professionals who understand the hazards of construction jobsites.
Today’s construction jobsites are challenging, highly complex and dynamic spaces. Therefore, it is necessary for contractors to seek rental equipment partnerships that help them to cut through the complexity and provide the specialized resources to get the project done safely, on time and on budget. Uptime is the goal, and productivity is the ultimate competitive advantage.