State of the equipment rental industry
By Connie Lannan Connie Lannan and Brock Huffstutler

State of the equipment rental industry

Even before factoring in the potential positive impact of infrastructure spending, the American Rental Association (ARA) was forecasting a record year for equipment rental revenue in 2022. At the same time, event rental companies are expecting continued growth in revenues after taking a huge hit due to the impact of the coronavirus (COVID-19) in 2020.

While revenues are likely to outperform the peaks reached in 2019, the business for each segment has been altered. Technology is playing a greater role as labor shortages mean companies need to be more creative to meet demand. The segments have some common issues, but there also are significant differences in how they are handling customer demand, finding employees and dealing with supply chain problems.

To better understand the state of the industry, Rental Management spoke to several industry leaders about how they are pivoting and coping with the new challenges they are facing in 2022, which are outlined in the following articles focused on equipment rental.


Dealing with high demand and stiff challenges

Equipment rental operators weave intricate balance to serve customers in 2022

For most equipment rental operations, the pandemic fueled an uptick in demand during 2020 and 2021. That trend appears to be not only continuing but also gaining momentum in 2022. While that is an exciting proposition, rental operators do not anticipate all to be smooth sailing this year. Major challenges are creating strong headwinds, culminating in an intricate dance to meet their customers’ needs.

“Demand for equipment is at an all-time high for us,” says John Jeanguenat, president, RentalMax, Carol Stream, Ill., and co-chair of the American Rental Association’s (ARA) Equipment Rental Shared Interest Group.

ARA Region Four Director Bryce Puckett, general manager of rental, Kirby-Smith Machinery, based in Fort Worth, Texas, is seeing the same trend.

“We saw a 15 to 20 percent demand increase in 2021. What I am seeing is that everything is coming back as of this moment. This year, there is demand in almost every sector that we serve,” he says.

While it is great to have high demand for your equipment, challenges that emerged in 2021 are ever-present this year, making it harder to meet that demand. The major confrontations equipment rental operators are dealing with and the strategies for coping with them include:

The labor shortage. 

This situation came to a head during the first wave of the coronavirus (COVID-19) pandemic. “The biggest thing with the labor situation is the influx that we saw in previous years of new labor coming in slowed pretty drastically. Those employees who we anticipated in 2020 as a fresh start — someone we could have trained and by the next year have a little more seasoning to them — didn’t happen in 2020. In some ways, it didn’t happen in 2021 either because there wasn’t a prevalent return to the labor market of more experienced employees. There were a lot of workers who stayed not working,” Puckett says.

Adding to the challenge is that rental operators aren’t looking for good talent in a vacuum. “Every industry seems to be in that same boat. Everyone is looking for talent. Trained technician spots are by far the hardest to fill,” Puckett says.

“I see this issue continuing in 2022 because, I think, above and beyond the impact of the pandemic, there is a micro-economic impact for certain positions where there is a much lower supply than there is a demand for those positions,” Jeanguenat says. “We see that specifically for delivery drivers, particularly CDL drivers.”

To counteract this, rental operators are taking the following steps:

Increasing compensation: “We are looking at paying above market for great people. That has become a bigger part of our strategy. We are willing to pay more for the right people because we see it as a long-term strategy and solution for this issue, which I see will persist for the foreseeable future above and beyond 2022,” Jeanguenat says.

Ben Blood, vice president, Big L Rentals & Sales, Garden City, Kan., agrees. “In my opinion, if you’re not looking at both boosting starting wages for new hires and making wage adjustments for existing staff, you’re in a dangerous spot.”

Using temp agencies: “The shortage of different mechanics and drivers has been the biggest issue for us,” says Josh Bogucki, safety director, Black Diamond Equipment Rental, Uniontown, Pa., and an ARA of Pennsylvania board member. “We’ve had to start utilizing temp agencies for a couple of our positions.”

Working with high schools and vocational-technical schools: “Our local high school has a large farm program, including a huge welding and mechanics program. I have been able to pull students from there to work for us as yard personnel and mechanics in training,” says Matt Crawford, owner, Far West Rents & Ready Mix, Lincoln, Calif., and ARA of California treasurer.

Creating an inviting work culture: “The biggest piece in a market like this is that you can offer whatever you want for a starting wage, but if you’re not working to create a culture that makes employees feel valued and feel like they’re appreciated for the efforts they are contributing, you’re constantly going to have a revolving door. That doesn’t get talked about very much. Yes, we can complain about what’s happening with wages, and being in line with the market is an important factor, but beyond that, you need to really be building an organization that people want to be a part of and want to stay at. If you’re not doing that, they’re always going to be searching,” Blood says.

Being flexible: “We have been more flexible and have kept up with our benefits package,” says Charles Hewett, president, ABC Equipment Rental, Tulsa, Okla. “One area where we have been more flexible is in vacations. Before, we put new hires on a 90-day probationary period. They had to work for a year before they received any paid vacation. We are changing it to six months, including the probationary time, for five days of paid vacation. Also, while we are a six-day operation, we allow many of our mechanics Saturdays off because they do not deal with customers.”

Hewett also added a person to get equipment ready for rent. “He is paid less than my other employees because he doesn’t deal with the customers. I don’t care if he comes in late or takes a longer lunch break. As long as he is here 40 to 45 hours a week, that is fine with me. It has worked out well. If this person wants an increase in pay, he will need to adhere to the rules the other employees are bound by.”

Using the ARA Job Board, social media and other avenues to recruit: “We have used the ARA Job Board. We continue to plan to use it. I think it is a great resource specific for the rental industry,” Jeanguenat says.

“We’ve brought people on by connecting our people with those who are in their sphere. And we’ve done social media. That’s actually been working well for us,” says Steve Mau, president and owner, Brainerd General Rental, Baxter, Minn., and incoming ARA president-elect.

Supply chain issues. 

Every rental operator has experienced longer wait times for equipment and parts.

“I waited eight months for two excavators that I finally received in 2021. Half the stuff I ordered won’t be here until the summer,” Crawford says.

“We also are paying a lot more for freight/shipping costs for parts,” Jeanguenat says. “It is impacting lead time, and total acquisition cost is higher because of the freight.”

To deal with all of this, rental operators are being creative and resourceful:

Placing bigger equipment orders earlier and more often: “I know we are ordering more equipment than we ever have simply to get stuff in the pipeline. You’re so fearful of not having equipment that you’re just getting stuff ordered,” Mau says.

Reaching out to more manufacturers and alternative sources: “I am buying from manufacturers we haven’t used in a long time or never used before — just whoever has it, that is who I buy from,” Hewett says.

“We’re getting more resourceful in getting equipment in a different manner,” says Bryan Peters, president, AdvanceTrac Equipment, Dripping Springs, Texas. “This wouldn’t work for anyone with a significantly sized business, but we have targeted alternatives like Craigslist and Facebook Marketplace versus the more traditional ones like Machinery Trader, Equipment Trader and those kinds of platforms.”

Purchasing off-lease equipment: “For the first time, we have bought off-lease equipment from our manufacturers and customers. We are actively buying used equipment to put into the rental fleet,” Puckett says.

Subrenting: “Sometimes we are subrenting from area rental businesses, or if the manufacturer has demo units, we can subrent from them,” Crawford says.

Running equipment longer: “We are running our equipment with more hours than we typically do because we can’t get a replacement for it,” Hewett says.

Not selling equipment: “I won’t sell anything until the new piece of equipment shows up. Now I don’t list it for sale until the new piece is in my yard,” Crawford says.

Stocking up on parts: “When we need to order four, we just go ahead and order 12 to keep the parts on the shelf. Because it’s likely the next time you need to place an order, they’re not going to be available,” Blood says.

Salvaging machines for parts: “We have had to buy used parts at times. We have gone to the extent of salvaging machines and parting those out. It has been a very creative effort to make sure we have equipment up and available,” Puckett says.


Meeting challenges head-on

Addressing emerging trends are a priority to stay competitive

Yes, it is hard to find employees. Yes, it remains difficult to receive equipment and needed parts in a timely fashion. Yet these issues have not stopped equipment rental operators from the pursuit of keeping up with emerging trends that will keep their operations on solid ground.

Take a look at the trends equipment rental operators are facing and how they are working to meet them head-on, such as technological advances.

Budgeting for improvements: “It is part of our three-year picture that we should be spending up to 2 or 3 percent of our revenue on new technology because it is that important for the continued advancement of the business. If you are not investing in technology, you are getting behind,” says John Jeanguenat, president, RentalMax, Carol Stream, Ill., and co-chair of the American Rental Association’s (ARA) Equipment Rental Shared Interest Group.

Making telematics and beyond a must: “Telematics was kind of a neat novelty a couple of years ago,” says Steve Mau, president and owner, Brainerd General Rental, Baxter, Minn., and incoming ARA president-elect. “Now, it’s really an expectation and that’s been good. It’s becoming something that’s not a ‘nice to;’ it’s a ‘have to.’ If you’re static in this environment, you’re really falling behind.”

“We have Trackunit on all of our machines,” says Josh Bogucki, safety director, Black Diamond Equipment Rental, Uniontown, Pa., and an ARA of Pennsylvania board member. “We can see the status of machines and everything just from our computer screen, no matter where it is and whether it’s on rent. Just trying to take a more digital approach is really starting to help our productivity and our efficiency as far as company operations go.”

“The biggest paradigm shift in the way we operate our business has been thanks to our partnership with Trackunit,” says Ben Blood, vice president, Big L Rentals & Sales, Garden City, Kan. “That has evolved. When we started, it was just telematics on powered assets. Now, they have rolled out their kin devices and their Bluetooth tags so that we can start adding attachments and nonpowered assets into that same ecosystem and be able to do that in the same platform. And now we’re starting to play with access control. We’re just starting to dig deep into the capabilities of what we can do with that partnership. That’s been the biggest technology change that we’ve seen in the last couple of years. But I think that’s also becoming the norm.”

Improving the rental experience: “On the marketing and transactional side, we’re working with a company named Quipli, which has built an online marketplace for us where customers can go,” Blood says. “They can book their rental schedule, schedule delivery, make the payment and sign the contract. It is totally within our website at any time of day without reaching out to a rental coordinator on the back end. Essentially, all we have to do is approve [the rental] and schedule the delivery, and it’s done.”

“One of our first things we did was team up with a company that builds rental-specific e-commerce websites,” adds Bryan Peters, president, AdvanceTrac Equipment, Dripping Springs, Texas. “We have the capability to upload certificates of insurance, charge credit cards and do ACH [automated clearing house] functions. The options are limitless as far as the information we can collect. It allows someone to go online, tell us the dates they want to rent something and hit that ‘easy button.’”

Peters also is offering a tech-based solution from an equipment management standpoint. “Most rental companies put down the number of hours a business has used the machine on the invoice. What I want to do, especially for longer-term rentals, is to give a report to our customers that distinctly says, ‘Here is your utilization on this machine.’ What we want is to let the customer make the decision on whether it makes sense to keep that machine on their job site or if it makes more sense to turn it in. In a time when the supplies are so constrained, a customer can say, ‘I know I’m only using that machine 10 hours a week, but I really don’t want to turn it in because I know it’s going to be hard to find another one.’ It may sound crazy to a lot of people in the industry, but I think that letting the customer make that decision helps to build a relationship. It can move us away from just a price-driven world to building value with a customer where we are not just another vendor but truly a partner.”

Jeanguenat is working the same way. “We are working to advance and leverage technology within all aspects of our rental operation. We see the benefits of improved processes, saved time and better service for our customers. Some of the ways we have incorporated technology include moving to electronic contracts, implementing Smart Equip parts procurement and integrating Concur for electronic invoice management. For 2022, we are looking at ways to improve our equipment check-in and inspection process through technology, and we are committed to continued investment in technology to improve our rental operations,” he says.

Improving dispatching: “We’ve started to utilize a new dispatching system that is kind of a one-stop shop. Our logistics coordinator can give all our drivers their moves just at the click of a button. They also have access to their pre- and post-trip inspections for their trucks and have inspection forms for machines whenever they arrive on site,” Bogucki says.

“We have now started utilizing the Dispatch Center,” says Danny Showalter, president, Central Virginia Rental (CVR Rentals), Waynesboro, Va., and ARA of Virginia president. “We have consolidated all of our deliveries into one location, versus having six. There are some trade-offs with that, but having that dispatch center does help us be more efficient in what we do. Hopefully that streamlining will help us better serve our customers this year in an all-around service aspect.”

Enhancing communication systems: “Even little things like switching to VoIP [voice over internet protocol] service instead of traditional telephones for people working in the field, from home or wherever, makes communicating more seamless and a smoother experience for the customer,” Blood says. “Things like that are benefits that we’ve seen from COVID. Some of these issues we’ve all had to face will make coming out of this more efficient and with a lot better processes than we went into it.”

In addition to technological advances, rental operators also are facing the need to help employees develop careers in the business through operator certifications and more.

Focusing on training: “We have folks who have gone through a couple of train-the-trainer courses with different manufacturers so we can train our staff on MEWPs [mobile elevating work platforms],” Blood says. “Then we have both traditional forklift, powered industrial truck and rough-terrain forklift trainers on staff so we can train our own staff. That has grown into training customers as well, due to the demand we’ve seen for it. We’re seeing more customer requests than anything. We’re excited to see ARA get further into this. We will be eager to incorporate that into our own training offerings so we can ensure our employees can work as safely as possible and are as qualified as they can be for the tasks we need them to do — and that we can provide more value to our customers and be more of a total solution for them in the equipment space.”

“We went through the MEWP [mobile elevating work platform] train-the-trainer. We have extended that out to our customers. We’ve also used ARA’s Professional Driver Education Program. All our folks who get behind the wheel go through that program. And, of course, the whole certification on the equipment side that’s coming out from ARA in the next couple of months — we will encourage our folks to engage in that,” Mau says.

Changing policies: “With the new OSHA [Occupational Safety and Health Administration] and ANSI [American National Standards Institute] requirements for training on lift equipment, specifically manlifts, and the required training of customers that were above and beyond what was there before, we have actually changed our business model in that we are phasing out of manlift operations and things of that nature,” says Bryce Puckett, general manager of rental, Kirby-Smith Machinery, based in Fort Worth, Texas, and ARA Region Four director.

Rental operators also are dealing with taking actions to become a “greener” operation. For example:

Investing in energy-efficient equipment: “In terms of becoming more green, I think technology plays into that, looking at equipment that is battery-powered or is more energy-efficient. We are looking at new equipment in that way. We have customer demand for equipment that is electric or battery-powered,” Jeanguenat says.

“We are looking at more electrified options, alternative fuel options and things like that,” Blood says. “Those are things we’re already mixing in through bi-energy boom lifts or machines for which we never used to look at electric options before. And now battery technology is getting to the point where we can start to offer those things.”

Making a paperless rental experience: “From a business operations standpoint, we are going more electronic with everything we are doing, trying to reduce the amount of paper that we are using within our operation — electronic contracts, electronic accounts payable and receivable policies processes — there are a lot of ways in which we are trying to go electronic from that standpoint,” Jeanguenat says.

Implementing operational efficiencies: “We have LED lighting at all of our facilities. We are trying to make sure we are operating our facilities efficiently — both from cost- and energy-efficiency standpoints,” Jeanguenat says.

“There is talk with our upper management about implementing electric vehicles for our sales team once the F150 Lightnings are released,” Bogucki says.

Preparing for demand: “It’s one of those things that happens twofold,” Mau says. “Either the manufacturer pushes it in such a way that there is value for customers like us when we’re looking to acquire a piece of equipment and it moves the conversation, or, on the flip side, it’s the general public and they’re asking for it. Or, in the case of California, government regulations that are pushing that conversation. Quite frankly, we in northern Minnesota have not seen that. We’re moving that direction, but we’re not in a dead sprint. In terms of the actual equipment itself, we have not seen a big push in our marketplace and we have not done a lot there at this point.”

“We do not have a demand for battery-powered equipment,” adds Matt Crawford, owner, Far West Rents & Ready Mix, Lincoln, Calif. “I am making the effort. This year, there are a lot of manufacturers coming out. I have looked at aerators and thatchers, pole saws and blowers. I am looking at expanding as the technology advances. I have a fleet of ready-mix carts. It will be super-expensive to put an electric motor on those.”

Sharing how rental is the sustainable option: “The rental business by its nature is a green industry,” Jeanguenat says. “It is recognizing and communicating that to our customers. We need to continue to educate our customers and highlight why renting equipment is a more sustainable option and environmentally friendly.”


Connie Lannan

Connie LannanConnie Lannan

Connie Lannan is special projects editor for Rental Management. She helps plan, coordinate, write and edit ARA’s quarterly regional newsletters, In Your Region. She also researches, writes and edits news and feature articles for Rental Management, Rental Pulse, supplements, special reports and other special projects. Outside of work, she loves to bake for others, go for walks with her husband and volunteer for her church and causes she believes in.

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