Since people are always asking me about how everybody else is doing across the country, in advance of the publication of the RER 100 report -- which you'll soon be able to read at www.rermag.com -- I'll tell you a few clear and obvious trends. With the exception of a few niche players, the responses were pretty universal. Business dramatically slowed down in the 4th quarter of 2008 and the 1st quarter of 2009 was one of the slowest periods most people can ever remember. Most rental companies have responded similarly -- letting go of, usually quite reluctantly, 10 percent or more of their work force, selling off underutilized fleet, and cutting costs wherever possible.
Selling off used equipment in this environment, however, can be challenging. Some are finding sellers outnumber buyers significantly and the used equipment prices aren't what they need. As a couple of RER 100 executives pointed out, they, in the past, would sell some of the used fleet on the international markets, but they are finding limited demand there as well (we'll take more of an in-depth look at current used equipment markets in an upcoming post.)
A few companies have started new branches to put some of the fleet to work. If you've got the people and can get a suitable yard and can afford it, it's a great way to go. Some, however, were too close to the edge and couldn't afford the expense. And that edge has already claimed a few rental companies as casualties – hopefully there won't be many more.
So these are probably not new revelations to too many of you, but you may take comfort in knowing you're not alone, that it's happening everywhere. It's happening to the big and the medium and the small, in big cities, in medium markets, in small towns, in all regions of the country, and as we pretty much all know, the whole world is in recession right now.
As for when it will all turn around, I've seen no sign of consensus. Some people say they expect it to get better by the fourth quarter, while some even say they see signs of a seasonal improvement already. A lot of people expect business to remain slow into next year or even 2011, unless stimulus-related projects provide a shot in the arm. But a lot of people say until the banks are on solid ground, until credit starts flowing more freely, we won't really see a turnaround.
And when will that take place? If you've got any insight into that, we all want to hear it!
Another topic was rates, with many people saying they've never seen rates plummet so far and so fast. Some said they tried to resist for a while, but it came down to either cutting their rates or having almost no work at all. Kind of like being asked what method you'd like for your execution, isn't it? That's another topic we'll be exploring soon in greater depth.
So do what everybody else is trying to do – have faith in the resilience of this great industry. Find ways to make your business run more efficiently, find niches that work and strap yourself in for what could be a rocky road. The keys for surviving this recession and making it all better lie in what each of us does to make our business better in the months ahead.