July-August 2005

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Getting Attached to Rental

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By Carol Wasson

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More and more contractors are stretching budgets and broadening business opportunities by renting attachments. While obviously it’s more cost-effective to own the particular attachments dedicated to everyday core functions, those used less often—pricier or more specialized pieces—may be great candidates for rental, and great ways to expand service offerings and profit potential. And, in a market that’s glutted with attachment options—particularly for compact equipment—renting just the right attachment for the job allows contractors to push the productivity envelope. On the other hand, renting the wrong piece of equipment can result in machine stress and downtime. For that reason it’s best to establish a relationship with a true rental equipment expert (whether a dealer, an independent rental company, a national rental chain or franchise, or a manufacturer-based rental outlet) who can direct customers to the ideal attachment solution for their tasks, while also training them how to use the equipment safely and productively. In rental, customer service is just as important as product inventory.

Rental Is on the Rise
In 1993, the US rental industry recorded revenues of approximately $11 billion. Today that figure has more than doubled to $24 billion, largely due to the proliferation of national rental chains such as Hertz Equipment Rental, United Rentals, NationsRent, Sunbelt Rentals, and RSC Equipment Rental. In fact, Chicago-based NES Rentals recently announced that it had invested more than $150 million in new rental equipment during the past 18 months.

Also, manufacturers such as Caterpillar, Bobcat, Case, New Holland Construction, Daewoo, Volvo Construction, and John Deere place rental as a top market segment. The compact equipment sold to rental outlets—skid-steers, loaders, excavators, and backhoes—accounts for nearly one-third of all the new units manufactured each year.

When Caterpillar, for example, decided to throw its hat in the rental ring in the 1990s, the company began by expanding its compact-equipment line and its arsenal of attachments, which it refers to as “work tools.” Then the company plunged into the rental business by putting together a program to help Cat equipment dealers become effective rental players as operators of Cat Rental Stores. “Today, our goal is to widen the scope of work-tool options that we can offer to our customers,” says Dixie Sanders, Caterpillar marketing consultant for work tools, who adds that the company’s recent market studies show that its largest rental opportunity lies in the growing landscaping market. Caterpillar’s current financial reports indicate that its rental-store fleets are up approximately 21% over the previous year.

Bobcat Marketing Manager Lance Mathern reports that his company is also seeing major growth in the rental industry, at an estimated level of 30% over the last several years. “Our sales of skid-steers, compact track loaders, and attachments to rental operations mirror our sales to contractors. The same things that contractors are buying they are renting as well,” he says, adding that it pays off to rent attachments prior to purchasing them. A general rule of thumb, he says, is to consider purchasing the equipment if you can utilize it on at least 25% to 30% of your jobs.

Commercial Ready Mix Products Inc. of Winston, NC, rented a 60-inch sweeper attachment to control dust and runoff, and to keep stone off the concrete surface. After testing it out, the piece was purchased and is used two hours each day at its plant.

The company had also rented a hydraulic breaker attachment, but did not purchase it. Construction Estimator Steve Sumner says that the company really has to analyze how many times an attachment is used. “If you pay more in rent than you would in a payment, then you’re better off owning the attachment and having it at your disposal,” he says.

Multitasking
Combine the hottest compact-equipment rentals (ones with all the bells and whistles) with readily available specialty attachments and rental customers can quickly turn just one machine into a versatile tool carrier, without the considerable capital investment.

“A good contractor is always going to be looking for ways to make their people and their equipment more productive. Attachments allow them to use the same machine and the same operator to complete multiple functions,” says Bill Strickler, regional fleet manager for RSC Equipment Rental, a company within the Atlas Copco Group that operates nearly 500 rental stores across the nation. “We look at the application, length of rental, and job-site conditions. Then we offer solutions to help increase a contractor’s efficiency, by meeting the needs of the job, the operator, and the owner.”

Drew Pickens, corporate communications director for NationsRent, points to the fact that traditionally a contractor had to own a grader, a wheel loader, and a backhoe at a minimum. “Now one skid-steer, for example, can do the job of all three machines by combining it with attachments such as forks, augers, brooms, planers, hammers, grapples, and stump grinders,” he says.

Ever-Changing Technology
While attachment rental has been around for years, attachment technology is no longer your father’s Cadillac, as they say. With fierce competition for space on the rental floor, manufacturers are designing their products to fit a wider range of equipment. In fact, many attachments can be operated on different brands without the need to switch attachment brackets. Plus, new quick-attach coupler systems enable some attachments to be shared between the wheel loader and skid-steer units.

PHOTO: CATERPILLAR

Another high-tech example is Case and its optional “integrated” hydraulic couplers for its M Series backhoes. “This is the first hydraulic coupler to be integrated into the end of the dipper stick,” says Case Marketing Manager Rusty Schaefer. “It allows the contractor to change buckets without getting out of the cab. Another advantage of integrating is that you don’t lose any of the backhoe performance, and you maintain your breakout force for the bucket.”

Rising attachment use is significantly changing the design requirements of the machines that power them. “Compact-equipment models are being engineered with more hydraulic flow to handle larger, heavier attachments. Machines are moving from the simple to the very complex and are designed to do so much more than the models of yesteryear,” says Bret Berghoefer, who serves as the brand-marketing manager for excavators at New Holland Construction.

“The hydraulic flow of the machines that a contractor owns or rents, and the type of application [heavy-duty versus lighter duty], will determine which work tool is best for the job,” says Gustavo Valecillos, Caterpillar sales consultant for work tools for compact equipment and building construction. “That’s how the contractor will make the right decision on what to rent or what to buy. Remember that a tool may mount on the machine, but that doesn’t guarantee that it will perform well. The majority of your tasks just might require high-flow hydraulic work tools,” he says, explaining that some tools, such as cold planers or large augers, require extra hydraulic capacity to operate. Standard-flow versions of these tools may be available, but may not have the muscle of high-flow units.

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