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Interview with Birch Equipment’s Sarah Rothenbuhler: Eliminating Wasted Motion

Feb. 14, 2021
RER interviews Sarah Rothenbuhler, owner and CEO of Bellingham, Wash.-based Birch Equipment, about the boom in residential construction, balancing the costs of maintenance, cutting costs and running lean, and more.

In late 2020, RER interviewed rental companies owners and managers about how COVID-19 has affected their business and their expectations for 2021. Here RER interviews Sarah Rothenbuhler, owner and CEO of Bellingham, Wash.-based Birch Equipment, about  the boom in residential construction, balancing the costs of maintenance, cutting costs and running lean, and more.

How has business been for you in 2020? How has the pandemic affected your business?

The first few months of COVID were damn intense with all of the unknowns and perpetual blasts of bad news. All Birch facilities have been open full-time through the pandemic and it’s been a year of high costs and soft revenue. We’re grateful that we were able to quickly figure out how to continue to work safely so that we could be there for our customers and keep our people working full-time.

What are some of the factors that contributed to the high costs and low revenue?

Many industries and businesses have seen significant savings with 2020’s fast track into reduced and remote workforces and eliminating costs by reducing or eliminating the brick-and-mortar aspect of their businesses. The opposite is true for property-, capital- and labor-intensive industries like equipment rental and sales. Along with property costs, taxes, liability insurance, health insurance and labor costs associated with keeping crews working full time, there’s also maintenance, annual certifications and other equipment costs to keep up on whether the equipment is renting or not.

 Regarding revenue, a significant amount of Birch’s customers in commercial construction, manufacturing, infrastructure and industrial were stopped or stalled for three months plus and many are still not operating at their full anticipated volume of 2020. A bright light as been the boom in the residential construction and home improvement sectors, but it takes a tremendous amount of compact excavator, nail gun and single boom and forklift rentals to make up for the delayed demand in Birch’s large material handling, aerial fleet packages, 80,000-pound-excavator and super-boom rentals.

 On the bright side, Birch installs telematics on much of our major equipment and rolling stock. As the news of COVID hit the U.S. and jobs were getting shut down, customers asked Birch to retrieve equipment and be ready to quickly re-mobilize as soon as they could proceed with work. With telematics, as soon as customers were allowed to get back to business, Birch was able to remotely disable equipment customers wanted to keep stored onsite. This allowed us all to avoid additional demobilization and mobilization costs and also helped us to avoid a storage challenge as Birch runs at roughly 50 percent equipment fleet to property storage capability, meaning Birch-owned facilities can store approximately half of the fleet Birch owns at any given time. With well over 65-percent utilization on major rolling stock this is sufficient during non-pandemic years.

How do you expect the pandemic to affect business going forward into 2021?

It's going to be a challenging winter that could very well carry through the second quarter of 2021 for a good part of our customer base. We’ll continue striving for lean management processes, eliminating wasted motion to reduce stress and unnecessary costs, closely assess and adjust and keep working toward our goal of coming through this with our crews, equipment and facilities healthy, updated and well maintained. Birch needs to continue to be a business and service that co-workers and customers can depend on, now more than ever before.

How has the pandemic affected and changed your company’s ability to meet with customers, go on jobsites and essentially conduct rental business as you always have?

With the beautiful technology of the Internet, phones and telematics, Birch has been providing curbside service, delivery and remote support for years. Customers are used to being able to call us 24/7, ordering and signing contracts online, utilizing our website, and proprietary rental management systems. With the ramifications of more intensive electrical systems, emissions requirements and ever-changing operating systems and safety updates, equipment can be complicated, in-person communication between customers and co-workers is key for optimum results. Customers know they are safe coming to our facilities and we are diligent on being safe at customer sites; everyone is working through all of this really well.

How have different areas been affected and how do you expect them to be affected going forward?

Homeowner businesses and small contractors associated with residential construction and home improvement are in demand and it’s great to see so many of them doing so well. My heart breaks for the food/drink and entertainment businesses, especially in the cold weather climates who are dealing with so many unimaginable challenges. Same for the non-residential businesses and properties associated with hosting dense populations for work, education and entertainment. Industrial, petrochemical, oil and gas, power generation etc. are all working through drops in demand in addition to being challenged and restricted on their own facility improvements by their surrounding communities.

Have there been any good opportunities that have come out of the pandemic, i.e., more people doing home improvements, work renting to testing centers, etc.?

Yes, Birch has always enjoyed supporting the home-improvement sector but again, it takes a lot of pressure washer rentals to equal a 1600 IQ air compressor and there are set costs to owning equipment whether it’s renting or not.

This is a very uncertain time in the economy in regard to the pandemic and so many job cancelations. Does this uncertainty benefit rental in the sense that contractors would want to avoid capital expenditures on equipment and would therefore rent more?  

Yes. Renting the equipment costs a fraction of purchasing not to mention the time/cost benefits of equipment being fueled, charged and operating properly when the project starts as well as not having to store or maintain the equipment. The uncertainty caused by the pandemic is certainly another reason for choosing rental over additional capital expenditures.  

This year has been full challenges but through all the chaos, there’s been some damn good days and accomplishments thanks to our co-workers, customers, vendors all working so well together. Throughout Washington and Alaska, we work and live in some pretty special communities.

[Owner and CEO Sarah Rothenbuhler has led the company for more than 25 years. Under her leadership, Birch has become a forward-looking, tech-savvy and independently run equipment rental company specializing in commercial construction, Industrial/manufacturing, DOD and public works projects, specialty marine & homeowners. Birch locations are in Washington state and Alaska. Birch is headquartered in Bellingham, Wash.]