The second quarter finally ended. The business news reported a steady barrage of companies reporting losses, lower earnings, production cutbacks and employee layoffs, and generally not meeting the expectations of Wall Street investors. Equipment suppliers were right up there with the rest of the business casualties, with major manufacturers such as Caterpillar, John Deere and Ingersoll Rand reporting tough times.
The aerial business was hit particularly hard, with Grove and UpRight filing for Chapter 11 bankruptcy protection and going through major reorganizations. Condor discontinued a line and even industry leaders JLG and Genie are going through tough times.
Larger rental companies didn't escape unscathed either, although at press time, a couple of days before United Rentals' earnings conference, the industry buzz is that United will come close to second quarter projections and pretty much meet the expectations of the “street.” Other public rental firms are less likely to fare as well.
But most independent rental companies seem to be holding their own during this year of downturn. Demand may have slipped a bit in some regions, and most find their markets crowded with equipment, but overall business appears to be holding steady.
One reason for that may be that contractors, just like rental companies, are holding the line on expenses and seem more likely to consider rental rather than unleash large capital expenditures on equipment during uncertain times.
With that thought in mind, it might be time for rental companies to crank up the propaganda machine. Time to re-enroll your contractor customers in Rentals 101, or at least offer a refresher course. You might want to write up a handout or an e-mail to remind them of the benefits of rental. During these cost-conscious times, contractors might be more receptive than usual to a message about how rentals can save them money.
List the many ways rentals benefits your customers: saving money on equipment maintenance, storage and delivery, not to mention the labor required to perform these services properly. With rental, your customers will have access to a wide variety of inventory with the most up-to-date equipment and attachments, as well as the application expertise rental firms can offer. Rental can save them insurance costs and shield them from liability exposure. Let them concentrate on construction and let fleet management experts take care of the equipment.
Implore your customers to check their utilization numbers. If they are not using equipment 50 or 60 percent of the time, try to show them how much money they are losing and how it would be cheaper to rent those machines. Now more than ever, rentals can save the contractor money.
But I don't need to convince you. You need to convince them. Now is a good time to double those efforts.