Development of Equipment Rental industry
Equipment rental, which is also called plant hire in certain countries, is a service industry providing machinery, equipment, and tools of all kinds and sizes (earthmoving, powered access, power generation, hand-held tools, etc.) for a limited period of time to final users, mainly to construction contractors but also to the industry and to individual consumers. The need and requirements of the end users is driven by the profit/cost-savings because of the rental rather than an outright purchase.
The equipment rental industry is a relatively newer concept in the marketing world. Founded in 1955, the American Rental Association led to the creation of companies with nation-wide operations. Europe is also catching up since the 80s. The industry has moved from mostly family-owned small businesses to the creation of a number of international groups, some of which have an annual turnover of close to €1 billion. In 2007, 5 out of 10 of the largest equipment rental companies in the world were European.
The main reasons for the rapid development of this industry can be enumerated as follows:
Usually, contractors in various projects have a tight leash on their budgets, because of which they have to yield high levels of profits as compared to the invested capital. This increases the eagerness of contractors to rent equipment rather than outright purchases as it allows them to minimize the size of their owned equipment fleet. Less immobilized capital allows for improved cost control, lower maintenance costs, and reduction in transportation of equipment. Renting equipment with operators even allows for optimizing staff costs.
Newer Range of Equipment:
Depending on the size of rental companies, they can have a fleet of inventories that can reach up to thousands of equipment, while some companies provide specialized and specific product range. These rental companies can provide the most comprehensive range of state-of-the-art equipment—with or without the option of providing qualified operators (on the need the renter). For example, the average fleet age in Europe is approximately 3.8 years.
Maintenance and Compliance with Standards and Regulations:
Rental companies bear the responsibility of ensuring the equipment that they rent out regarding their compliance with all the applicable regulations. Safety checks are performed before each delivery. In this manner, the overall expense of the upkeep of the equipment is on the rental company, which reduces the maintenance expenses of the renter.
The above aspects result in a win–win situation for both the renter and the hirer.