Lessen Disasters by Planning in Advance

I'm sure all of you were deeply affected, as I was, by the incredible devastation Hurricane Katrina wreaked on the Gulf Coast area, followed by Hurricane Rita. Hurricane season isn't finished yet so there may be more before this autumn is over.

There has been quite an outpouring of equipment and financial donations on the part of manufacturers and rental companies to aid hurricane victims, and a lot of generosity has been shown to victims from within the industry. Some rental centers were literally destroyed, others were damaged severely, and some rental company personnel had their homes, vehicles and businesses either damaged or destroyed. Yet amazingly, business went on in the days and weeks after Katrina hit, with many rental centers continuing to do business under challenging conditions and employees going to incredible lengths to get to work despite precarious personal situations.

It's no secret that disasters provide business opportunities to equipment manufacturers and rental companies and there is nothing wrong with that as long as customers and disaster victims are treated with respect and companies don't resort to gouging to take advantage of the unfortunate. Many rental operators I spoke with seemed more concerned about the welfare of their employees and their families than anything else.

Looking at the long term, the rental industry will indeed be impacted by these hurricanes. The price of fuel has leveled off since the immediate post-hurricane spike, but fuel prices are not likely to go back to levels we'd come to regard as normal for a long time, if ever. Heating bills will rise dramatically this winter because of the disruption to natural gas imports that come through ports in the Gulf region. As people spend more money on fuel and heating, they will likely spend less on other consumer items, which will have a bit of a dampening effect on the overall economy.

Companies bringing in equipment into the affected areas will reap a windfall. But reconstruction will be a long, slow process, preceded by major cleanup operations. Many people who took refuge in other states, particularly surrounding states, will relocate in those areas and that may lead to some additional building in the surrounding states.

Looking at the death and destruction in the affected zones, it is particularly sad to think about how much devastation might have been avoided with better planning on the federal, state and municipal levels. Some equipment manufacturers made plans for hurricane season well in advance. For example, Ron Johnson, CEO of MMD Equipment, told me that his company learned lessons from past hurricane seasons and had thousands of generators stored in Florida for immediate deployment to affected areas, rather than keeping that inventory at its New Jersey headquarters. MMD had good reason to assume that somewhere in the southeast, whether it be in Florida where there was some hurricane-related demand, or, as it turned out, in Alabama, Mississippi, Louisiana and Texas, where there was dramatically more, people would be needing those generators and needing them quickly.

Just as the Y2K concerns over the electric grid inspired thousands of businesses to acquire generators and make contingency plans over what to do if power failed, rental companies need to look at the possible disasters that could not only affect their power supply or cause floods but think about what other disasters could strike them and have plans made in advance. Hurricanes are one possibility. Earthquakes, fires, heat waves, ice storms and power outages are all possibilities, depending on geographic location. Rental companies should think about alternate power sources, evacuation procedures if evacuating a building became necessary, and internal communications if employees are unable to make it to work in the event of a disaster.

Rental companies should also have strong relationships established with disaster agencies, such as fire departments, police, hospitals, Red Cross, and state and federal emergency agencies, in case the rental company needs services and also to be able to provide assistance where needed. Rental companies are often in a position to provide assistance on a humanitarian level as well as to take advantage of business opportunities that arise when disaster strikes. I highly recommend you review and update your procedures, both from safety and business perspectives.

In this issue, our Industry News section offers a lot of information about how companies in our industry responded to Hurricane Katrina. Next month we'll have more reports from the affected zones. And our weekly newsletter RER Reports — at — offers ongoing coverage about the aftermath of Hurricanes Katrina and Rita, as well as future events as they occur.

TAGS: Ar Features
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