When the phone isn't ringing at a business, the company can increase its sales efforts to try to make it ring more by chasing business aggressively. In the current economic environment, as many rental companies will attest, there still isn't enough business to be found when customers finish jobs and have no new jobs to replace the recently completed ones. Business in such circumstances need to try to adapt to changing times by enhancing their portfolio of services or at least re-package them in different ways.
One such service is fleet management. Several companies have been specializing in this for years and in the case of Ameco, for example, it has become more important to the company than traditional rental and sales of equipment. Other companies have practiced it in varying ways. For example, St. Louis, Mo.-based Midwest Sales & Equipment experimented with taking over the fleets of customers: managing the fleet, storing it and maintaining it. I've seen it done where a rental company will buy or lease the fleet from the customer and manage it for them. If the rental company determines there are too many of a certain category in a fleet to support its utilization, it will sell off the asset. If it determines the inventory mix needs adjusting, it takes care of it. It leases equipment back to the customer or sends out equipment to jobs the customer gets, it disposes of aged or under-utilized units, it modifies equipment for particular jobs, and it makes sure equipment is maintained according to manufacturer-recommended preventive schedules.
Last week we found out that Briggs U.K., the English division of Dallas-based Briggs Equipment entered into a similar deal with a British company that had a large fleet of material handling equipment. It reduced the fleet by nearly 40 percent because much of it was under-utilized. It committed to deliver 96 percent uptime to the customer and guaranteed a three-house service response time. It made some changes in the composition of the fleet in accordance with the work the customer had coming up. Briggs' company is geographically spread out so Briggs took advantage of its large footprint to be able to take care of the company wherever it does business.
Fleet management may require some business acumen and some study to figure out, but it doesn't require a whole lot of skills that most rental companies don't already have. You know how to maintain equipment; you know how to track utilization and determine if an asset is being utilized sufficiently. You know how to dispose of used equipment and you know how to deliver machines to a jobsite on time. You know how to respond quickly if a machine breaks down on a jobsite.
It's a matter of adapting, re-packaging and then, ultimately, performing the way you already know how to perform. Do your homework to figure out how to structure a fleet-management deal and take it from there. It may not work for everybody, but it might for some.
