Supply Chain Strains and Thanks for the Jump-Start

It wasn't a total shock when I read earlier this month that Bridgestone raised its prices in the U.S. and Canada on its Bridgestone and Firestone brand truck and bus tire products, Bandag retreads and related retreading materials, with an average increase of 11 percent. If you take a look at the price of rubber, even though it has leveled off slightly the past couple of months, it skyrocketed to all-time highs earlier this year. Lead times on certain types of tires are more significant than in a long time.

Steel prices are up and copper prices are at all-time highs. Getting components is more difficult and more complicated than in the past, because of a number of reasons outlined in this month's cover story, beginning on page 16.

Engine costs are arising as well. Lead times have been extended for engines, exacerbated by increased freight and shipping, and the upcoming implementation of Tier-4 engines will contribute to additional price hikes on engines. Manufacturers are also facing delays on obtaining components for a variety of reasons the cover story explains.

So while new equipment prices have risen, one has to give a lot of credit to industry suppliers that they haven't gone up more. Manufacturers that I spoke to are well aware of the pressure rental companies face, and that even though demand among rental customers is better than it has been the past couple of years, there is still hesitancy in the marketplace. And while utilization rates are increasing and rental rates are better than they were, they are still not where they should be, and much of that is because so many customers of rental companies are struggling to survive themselves. It's not easy to raise rates when so many customers aren't even paying their existing bills. Recognizing some of the issues the rental industry is facing, equipment manufacturers have been restrained in raising prices.

So there are tough times all over.

One way to cut back on a few costs might be in the IT area, and our Interviews with Software Manufacturers article on page 22 might give you some thoughts about that. So do I have my head in the clouds to suggest that there might be an economic way of managing IT costs at a time when you probably need to improve your technological offerings? Well, I guess so! If Apple can embrace the cloud as a solution, rental companies might want to look at doing the same.

This morning my car battery was dead. I couldn't find my jumper cables so I called AAA. When I grew up, AAA was really the only option for roadside assistance, and I remember as an adult getting my first AAA card. But whenever I needed to use it, it always seemed like I waited for an hour and a half for somebody to show up. Service was minimal and the personnel seemed indifferent.

Now there are more options and consequently a much different attitude. In recent years when I occasionally required service, they've arrived in less than a half hour. Today the service person came out, shook my hand, had diagnostic equipment to determine if there was a problem beyond the battery so he could make recommendations. He determined the battery was responsible, told me the voltage level and offered to sell me a battery and install it at a decent price, saving me having to go elsewhere to take care of that. So, needless to say, my impression of AAA is quite different than it was 25 years ago.

It's a simple thing but what AAA did was surpass my expectations. I figured I'd get a jump-start and then go to the dealership, buy a new battery and wait for installation. AAA saved me money and time. AAA accomplished that by not being the same as it used to be, because it has improved its attitude as well as its response time and added services that I didn't even realize it had. I had considered giving up my membership a couple of years ago but now I'm convinced to renew it.

So why am I writing about this? Not to suggest that rental companies go into the roadside assistance business — although you do the same thing essentially on jobsites — but that you always look for ways to improve the level and quality and scope of your services, and make sure your customers know what you can provide. If you keep improving and communicating those improvements to your customers, they'll be less likely to pursue other options.

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