The new RER 100 totaled $25.2 billion, a record total for the listing, and a 15-percent increase over 2018’s $21.9 billion. Now in its 37th year, the RER 100, ranked in order of rental volume, totaled $25,231.5 million as rental companies reported strong business in oil and gas, non-residential construction, residential, commercial and specialty. For the most part, RER 100 executives said their customers are busy and expect to be for the foreseeable future. The 2019 RER 100 covers 2018 rental volume.
To nobody’s surprise, the RER 100 was led by United Rentals, which reported $6.94 billion in rental revenue, along with $8.047 billion in total revenue. Sunbelt Rentals was next with $4.6 billion in rental revenue and Herc Rentals followed with $1.658 billion. Home Depot Rents, Maxim Crane Works, Brand/Safway, Ahern Rentals, H&E Equipment Services, Sunstate Equipment and Aggreko North America made up the rest of the top 10.
Of the companies that reported both this year and last, 50 of them had double-digit increases, just about half the list. A dozen topped 30 percent. TNT Crane & Rigging jumped 69.7 percent although an acquisition played a part in that. Kirby-Smith jumped 55.6 percent. Lizzy Lift leaped 53.2 percent, all organic, with an expanding fleet. Cisco Equipment leaped 51.8 percent, mostly as a result of a surge in Permian Basin oil activity. Franklin Equipment added a couple of branches but that’s not the only reason it increased rental volume 50.8 percent. Trekker Group did a lot of hurricane restoration work in Florida and Puerto Rico and increased 47 percent. Cross Country Infrastructure Services increased 45 percent and Illinois Truck & Equipment jumped 42.9 percent.
In the 30-percent range Kelly Tractor went up 38.8 percent, Cooper Equipment Rentals 37, Brand/Safway 33.1, Leppo Group 32.2, Worldwide Equipment Rentals 32, Anderson Equipment 31 and CBS Rental and Supply 30 percent. Fourteen companies increased in the 20-percent range. And among the top 10, United Rentals, Sunbelt Rentals, Brand/Safway, H&E Equipment Services and Aggreko all jumped more than 20 percent.
Based on these dramatic increases, one might conclude that the euphoria was universal, but it was not. Not that they had “bad” years, but eight RER 100 companies reported year-over-year rental revenue declines, most of them not very big. It doesn’t mean they did something wrong or they didn’t manage well. A company can’t always follow a record year with another record year. Not every market was clicking on all cylinders the whole year. Some faced a few soft months, or periods of difficult weather. And notwithstanding some of the dramatic increases, many markets are finding competition to be too numerous. It’s the same old story – business increases, rental companies expand, and in some markets a rental company bids on a job only to find a dozen or more competitors offering the same equipment, and very often slashed rates.
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While some rental companies are reporting that they are getting higher rates, in some cases 3 to 4 percent higher, the realities sometimes are far more cutthroat. And while increased competition spurs the need to improve and differentiate by adding new services and capabilities, it also makes for uncomfortable questions about how long the expansion will last and what kind of price will have to be paid if demand slows down.
Those are questions few at this point can answer clearly. Most expect 2019 to continue to be strong in equipment rental. Some say less so, but others think it might be even better. Time will tell.