People in the rental industry — both rental companies and suppliers to it — have been talking a lot lately about costs. Obviously the cost of fuel affects everybody. The costs of steel, copper, tires and so many components are making it difficult for manufacturers to keep their costs down. And rental companies are faced with skyrocketing delivery costs. And those costs become more worrisome when revenues are flat or worse. As one rental company owner said to me last week, “It's hard enough that each delivery costs me twice what it did a year ago; I wouldn't mind it so much if I had as many deliveries to make.” The combination of increased costs and slower business is taking a serious toll on this rental business and many others.

It looks to me that there are some cracks in the foundation of the manufacturer-rental company partnership that has been carefully constructed in recent years and it's not hard to understand why. The manufacturer, faced with spiraling cost increases, needs to increase prices to remain profitable. The rental company, faced also with burgeoning costs and soft business, wants to replenish fleet and wants the manufacturer to not only not increase prices but, in some cases, even reduce them.

It reminds me of that old Ray Charles song, “Busted.” A man is broke, so he calls his brother for a loan. But his brother responds by reciting his litany of financial pressures and says, “I was just thinking of calling on you.” It's a vicious circle and one that won't easily find a satisfying outcome as long as business is soft.

That's why partnering is important. The problems rental companies and manufacturers face are different, but related. Both ends of the supply chain, if they aren't doing so already, need to take long looks at their costs and figure out ways to cut waste, operate more efficiently and streamline. Many rental companies are looking at solutions such as dispatching software; telematics to help track, diagnose and service equipment; and various forms of electronic data interchange to reduce transaction costs.

There are many tools that can help, but ultimately more important than the tools, more important than the software, is the partnership attitude. There needs to be far more constructive dialog on how different links in the supply chain can work together to lower costs for all sides. Partnerships between manufacturers and rental companies are not about sitting around the campfire and singing “Kumbaya.” It's about really working together to make processes more cost-effective, linking back-office systems together for more harmonious interaction.