At press time, I just returned from the European Rental Association's first international conference. Held in the delightful city of Amsterdam, the show brought in rental people from more than 20 countries. We'll have more information and more accurate facts and figures in July RER, but it was a great experience to see rental people from all over Europe, meeting with manufacturers and sharing best practices through a variety of workshops covering issues related to delivery, use of technology, and relationships between manufacturers and rental companies.
The rental communities in Europe are dealing with many of the same issues rental companies in the United States are facing, not the least of which is the cost of fuel, which is about 2½ times as much in Europe as in the United States. So if you think we've got it bad, talk to some European rental people to see how they deal with gasoline that's more like $10 per gallon and going up just as fast as ours is. The last time I filled up my car before leaving for Europe, I paid about $4.10. I needn't describe how I felt a bit more than a week later when I went to fill up before coming to work and looked at the sign saying $4.49 per gallon. Of course rental companies delivering equipment often great distances face much more serious woes from the fuel crisis. Many rental companies take a loss on delivery and I believe passing that cost on to customers is the logical way to do business, even if competitive pressures suggest otherwise.
We're in a new era now, different than any we've ever been in before. I was quite amazed as I read through special issues of Business Week and The Economist on the topic of oil and the economy. They interviewed quite a number of economists and oil experts and still couldn't come up with a consensus on why oil prices are rising so fast, just as there is a lack of consensus about how the oil morass will affect the economy and how long the current “slowdown” will last. I'd like to tell you I've got it all figured out, but as I said, we're sailing into some uncharted waters.
Getting back to the European show, manufacturers in attendance were not completely united in their reaction to the show. Some were disappointed with the relative lack of floor traffic, although like many trade shows, it's somewhat subjective when numbers aren't overwhelmingly strong. As one Danish manufacturer told me, whether or not a show is worthwhile might depend on one particular lead or contact that leads to a good business relationship. As I spoke with him about halfway through the second day, he said he didn't think he'd met that person yet, but he was hopeful because the quality of attendees was very high. By quality, of course, the gentleman meant that, for the most part, attendees at the show were senior management people who could make a difference in whether or not their companies bought or considered buying a particular line of equipment. Some exhibitors I spoke with were confident they had made contacts that would lead to further business. Some weren't certain. Some had already sold, or reached agreement on selling a good quantity of equipment, while others were not. JCB, for example, reported a sale of 350 machines to one customer and 390 machines sold for the show.
The networking events were stimulating and interesting with discussion on a range of issues, including the above-mentioned topic of delivery. I met rental people from more than a dozen different countries. The European rental market is vital and vibrant, with an estimated 2007 rental volume of about EUR 23.5 million, about U.S. $37 million at current exchange rates, close in size to estimates of the North American market done by a research firm hired by ARA, as well as those by industry analyst Frank Manfredi.
ERA also gave out a series of awards for rental company of the year, rental person of the year, a green company award, rental product of the year, best promotional campaign and more, well thought out and considered by panels of industry personnel.
Overall I give ERA kudos for a well-organized trade show. It was obviously not on the scale of ARA's rental shows, but ARA has been doing it for 50 years. You have to start somewhere and the Europeans are doing a great job of making those efforts. They didn't solve the oil crisis or the economic slowdown, but neither can the experts assigned to those tasks. Better days, hopefully, lie ahead.
