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Rent Talk

United/AMECO Partnership Has Far-Reaching Implications

Last week United Rentals and American Equipment Co., now more commonly known as AMECO, announced a joint venture with fascinating implications for the growth of the rental industry. Go to http://rermag.com/trends_analysis/headlinenews/united-rentals-ameco-joint-venture-081610/index.html if you haven't read about it yet. The essential concept is that the two companies will form a separate as-yet-unnamed entity that will work together to provide rental and other support services for companies along the Gulf Coast.

The synergy between the two companies strikes one right away. United Rentals obviously has a huge fleet of equipment, far-reaching branch network, delivery capability and all the basic things that a rental company can provide. If an industrial company needs two dozen lifts, a dozen generators, light towers, forklifts, skid-steer loaders or any other rental item, obviously United can provide that quickly. And United has software that helps to keep track of the items, and can handle billing and all the basics.

AMECO, on the other hand, specializes in a whole different realm. AMECO can handle some of those equipment needs, although not always as immediately and completely, since AMECO's operations are more project-oriented. They may not have a branch right nearby to the facility where a need arises, and might not have immediate access to all the equipment needs required on a shutdown-turnaround or disaster response such as the recent oil spill. It might, and it might not. AMECO often partners with third-party equipment providers to take care of those needs, and it has worked with United Rentals a good bit in recent years in this respect. Their ability to partner together in a harmonious manner played a role in leading to the evolution of this new venture.

AMECO specializes in what it calls “inside-the-gate” services. Rather than have a branch in a city near a project, it is more likely to set up a facility inside the gate to work on a project. It has large quantities of tools and sophisticated tool-tracking software to enable the customer to take what it needs when it needs it. AMECO provides huge ice-making trucks the size of tractor-trailers, blast-resistant air shelters, fleet-management services and other onsite capabilities.

Together the two companies, or the newly created entity that is still in the process of evolving, will be able to bid on jobs, providing a wide range of equipment and services the likes and scope of which have never really been seen before in the rental industry. In speaking with United Rentals CEO Michael Kneeland and AMECO CEO Gary Bernardez in recent days, they both made clear that what the companies plan to offer will be far more than the current sum of both parts. They plan to evolve packages that will be more comprehensive than “United will provide boomlifts and AMECO will provide blast shelters.” The alliance has potential to evolve in new directions that might break new ground in terms of what this industry can offer, and the types of customers that can be reached. It has the possibility of leading the industry in new areas and directions.

I also find it significant in what it suggests for smaller rental companies. Don't be limited in your thinking regarding what you can do. You might be able to find ways to partner with other companies, even competitors. There may be a lot more you can offer than a boomlift or an air compressor or a backhoe. You can start by partnering in small ways: I'll bring the backhoe, XYZ Rentals will bring the hand tools and we'll cover your whole project.

Small partnerships can lead to big partnerships where both companies and the customers can win.

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