HIRE
HOW TO MANAGE RISING
EQUIPMENT AND RENTAL COSTS
Edited by Leon Louw
A major challenge facing companies in today’s construction industry is how to deal with rising
equipment and rental costs. One key component to this is whether to buy a piece of equipment
or rent it, says Gregg Christensen, vice president, nationals account, United Rentals. Founded in
1997 in Stamford, Connecticut, USA, the company is the largest equipment rental company in
the world.
“
If there is a consistent level of
equipment utilisation, based on
future projections of workload that
can be counted on – the sweet spot of
utilisation, purchasing is the way to go,”
says Christensen. “If there is a roller
coaster of utilisation, you’re probably
better off renting. Renting enables a
company to augment its owned fleet
with rental equipment to help smooth
out workload peaks and valleys,” he says.
He adds that sometimes the buy-or-
rent decision boils down to the questions
of whether a fleet has what it needs,
when it needs it and where it needs it. A
further consideration, adds Christensen,
is whether a company has the appropriate
staffing and transportation infrastructure
in place to maintain, repair and transport
its fleet of equipment. Staffing can be
a challenge unto itself because of the
construction labour shortage and lack of
labour growth that continues to plague
the construction industry.
Planning for your project needs
“It has been my experience that in
general, construction businesses are poor
planners when it comes to equipment
and a need for rentals,” observes
Christensen. “At United Rentals, we try to
be proactive to make sure we understand
a company’s equipment scheduling and
the possible need for last minute rentals.
Especially for larger jobs, we work with
jobsite staff to try and get an idea of
ebbs and tides in their project scheduling
and staffing so we can have equipment
available when appropriate.”
Another way to reduce equipment and
rental costs, he adds, is to appropriately
service and maintain all equipment to
ensure that it continues to function
efficiently and properly. Equipment
malfunction and failure can be costly –
equipment downtime, repair expenses,
idle labor and project delays, all of which
have a direct impact on construction costs.
It is important to maintain equipment to ensure they
remain in good working order and to prevent downtime.
32
APRIL 2020
www.equipmentandhire.co.za