TURN THE PAGE
IF ANYONE OUT THERE IS TRYING to understand how “Rental Stocks Stumble in 2000” [RER, February 2001, page 34], turn to “How Do You Rate?” and read [Rust Rentals rental coordinator] Steve Carpenter's quote [page 62].
I've been in the rough-terrain forklift business in Atlanta for 14 years, and rental rates have never been so low. If the leaders in the industry — i.e., HERC, NES, NationsRent, Neff, United Rentals — don't get it, let me explain what every small, independent, local rental house knows: You can't buy a $50,000 forklift, finance it at $1,200 a month, rent it for $1,500 a month and make money. You've sacrificed profit at the altar of utilization. Utilization is the goal, but it must be done profitably.
In an interview published in RER some time back, [former HERC president] Dan Kaplan said Hertz would be the industry leader in rental rates. I guess that explains why Hertz is down 32 percent. They are absolutely the worst at lowering rates and bumping competitors off the job. One of my customers showed me three Hertz business cards from salesmen who called on him the same day. And they all lowered each other's rate. What leadership!
[Aerial work platform manufacturer] Grove announced recently that they were jumping out of bed with the national chains, realizing that the relationship has hurt the reputation of the product line. It's time for other manufacturers of quality equipment to seek the more traditional, and loyal, relationships that once existed between manufacturer and local rental house.
If I could give advice to my fellow warriors in their fight against the Big 5, it would be simply this: Keep your equipment as new as possible, keep the service at high standards, offer personal service, show your customer page 34 of the February RER and, above all, don't lower your rates. You might need to work a little bit harder, look a little longer, but there are customers out there who appreciate service and a little kindness.
Mike Zimmer, president
Zimmer Equipment Atlanta
