RERMAG

Directional Drilling A Rental Product?

A United Rentals store in Birmingham, Ala., is one of the first general rental centers in the country to add a horizontal directional drilling system to its equipment fleet.

"We are seeing more and more directional drilling units on construction jobs, and we want to establish a place in a growing niche market," general manager Russell Gentry says. "If a store is the only one in the areawith a rental unit, it should have an edge, and the return on investment should be higher than with other types of construction equipment."

Gentry says the machine was rented on a six-month contract two days after it was delivered. And immediately after the purchase of the drilling unit, he adds, three other companies inquired about its availability for long-term rentals.

"Our customer is a fiber optic contractor who has rented trenchers and backhoes from us before," Gentry says. "Renting this machine allows him to expand his services into horizontal directional drilling."

In the past decade, HDD equipment has assumed an increasing share of the utility construction workload. These versatile machines, available in a variety of sizes with a broad range of capabilities, play an important part in building the nation's expanding telecommunications network, making trenchless installations of duct for fiber optic cable in areas where open-cut construction is impractical or impossible. On most jobs, minimal excavation is required.

HDD equipment also is used routinely to install underground duct for electrical cable and to bury pipe for natural gas and city water systems.

To make an installation, a directional drilling unit makes a guided pilot bore, pipe or cable is attached to the drill string at the exit end of the hole, and the drilling unit then pulls the material back through the hole.

Directional drilling minimizes disruption of traffic and other routine activities by limiting excavation and reducing the repairs that would be necessary if open-cut construction methods were employed in most projects.

Despite their growing popularity for utility construction, HDD units have made little impact on the traditional rental market. Rental centers - even those specializing in construction equipment - have been reluctant to invest in equipment they perceive is needed by a limited number of customers and that could require time-consuming training for their employees as well as customers.

The Birmingham United Rentals store avoided these issues by renting to an established customer - K & R Construction, also of the Birmingham area - experienced in using directional equipment. The drilling unit is suited to the contractor's needs, says Klay Guillot, who with Robert Savell owns and operates the utility contracting company.

"We are running it seven days a week, mostly on telecommunications jobs," Guillot says. "We also do power installations and any type of underground work."

The machine, Guillot adds, is compact enough to be used in small areas and has sufficient power to pull in great lengths of duct and pipe. Lengths of installations range from 40 feet to 400 feet. Most installations are 3 to 4 feet deep. Materials installed include 2- and 4-inch-diameter pipe and cable in diameters from a half-inch to 1 1/2 inches.

"We do a lot of road bores and direct cable installations," Guillot says. "Much of it is fiber optic cable."

Guillot credits availability of the rental machine with enabling the partners to start their own business.

"We have plenty of experience doing underground projects for other companies," he says. "Being able to rent the directional drilling unit has permitted us to expand our services and go out on our own without going into debt to purchase expensive equipment."

Guillot adds that the arrangement also benefits the rental center.

"They know us," he says. "They know our background and our capabilities. We've rented a lot of equipment from them before and have developed a very good business and personal relationship. We're getting the equipment we need, and the store has a reliable customer they know they can count on. We're very excited about the way things are progressing."

The utility construction workload is expected to remain strong. As the demand for directional drilling services grows, there clearly is a market for HDD rentals, a need that until now has been filled by equipment dealers and manufacturers who arrange short-term rental and lease-purchase agreements.

The approach taken by United Rentals in Birmingham might be a way for other equipment rental centers to enter an attractive new market.

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