It's midnight on a stormy Saturday night on an oil platform 150 miles off the coast of Louisiana. In addition to its oil-exploration equipment, the rig has welding machines, air compressors, pumps and other equipment uniquely designed for offshore applications. The platform is regularly doused with 25-foot swells and the salt spray corrodes almost every material fabricated by man. If a piece of equipment breaks down, it can cost thousands of dollars to ship out a replacement or fly a mechanic out by helicopter.
These kinds of conditions are almost unimaginable for a general rental center in Des Moines, Denver, Lewiston or Tampa. But they are part of daily life for Louisiana Rents, the seven-location rental chain owned by Louisiana Machinery, the Caterpillar dealership for the state of Louisiana. Louisiana Rents also rents to petrochemical plants, refineries, paper mills and a wide range of other industrial facilities, where trained personnel inspects incoming equipment from stem to stern, where the slightest leak, spark or bald spot on a tire is grounds for banishment.
“South of I-10, you really got it made,” goes a song by slide guitar specialist Sonny Landreth, a south Louisiana native. That may be true when it comes to enjoying fine Cajun cuisine, living a laid-back lifestyle and enjoying nature, but in the equipment rental business, where dozens of rental companies compete for that piece of the rental business, you only succeed if you practice the highest standards in equipment servicing, maintenance expertise and response time. That, combined with a willingness to go the extra mile, to make sure deliveries are on time and to do whatever it will take to offer the kinds of equipment that can live up to the rigors of the environment and unforgiving demands of the industries that make their living in such harsh surroundings.
Ask Shannon Fethke, manager of Louisiana Rents' Belle Chasse branch, near New Orleans. Fethke arrives at the yard at 5 in the morning and typically has delivery trucks rolling out of the gate a few minutes after he arrives if they haven't already left. “I've worked for five rental companies over the past 10 years,” Fethke says. “What's different here is that I'm not tied to a desk. I don't have to sit here and analyze reports 12 hours a day. I'm a motivator, I'm a hustler, I go out and get the rentals. I probably do an hour and a half of paperwork every day, the rest of the time I'm with customers, I'm in the streets, I'm helping on the counter, I'm helping in the shop, I'm helping on the wash rack, whatever is needed to get the job done.”
For Fethke, a 12- to 15-hour day is normal. “I try to be the first one here every day,” he says. “Do I need to be? Probably not. Do I want to be? Yes I do. The main thing is I wouldn't ask my people to do anything I wouldn't do. They know they'll see me on the wash rack if I need to be.”
Ask Mitch Landry and Erik McGuire, sales representatives and Steve Rougeau, branch manager at Louisiana Rents' Lafayette branch. “When we send an equipment order offshore, everything has to comply with Mineral Management Service regulations,” says Landry. “If you miss something, it might be a 15- or 20-hour boat trip to bring it out, so it might cost $10,000 or more to bring out one little piece that could make the job tick.”
The Lafayette staff has become accustomed to the unique requirements of the offshore market, where each customer codes their paperwork in a certain way and uses particular types of accessories for various pieces of equipment on a steady basis. “If you know that, then when the order is taken, we don't have to double-check it because everybody down to our drivers knows its for customer A and if we're sending a welding machine, we know what it needs to be rigged with to their specifications,” Landry says.
The offshore work covers everything from the upkeep of stairways on the platforms to preventive maintenance. The process might begin on the barges by the docks, where contractors install the structures they build on land.
“We follow the process from inception to the end where it's put on line,” says McGuire. “The contractors will let us know what equipment they'll need from the beginning to actually build the structure and we go through it all with them, from pumping out the barges so they can lay the structure on it and then taking it offshore to do all the fabrication and construction that they need to get it online offshore.”
Federal inspection agencies are charged with making sure conditions are safe offshore. If there is a loose step they will find it. They mandate that everything has to be sandblasted and painted at regular intervals.
“All our offshore equipment is skid-mounted and the skids themselves are galvanized steel,” says Rougeau. “Our offshore compressors are manufactured with galvaneel shells by Sullivan Industries. You can look at one of our three-year-old compressors and compare it to the air compressors of our competitors of the same age and it's like night and day. Theirs are all corroded and ours hold up really well. It costs more upfront, but it's worth its weight in gold because that environment is so harsh. We do the same thing with welding machines by buying the Severe Duty model manufactured by Lincoln Electric.”
Not only does the Louisiana Rents crew come prepared with specially fabricated equipment and a meticulous attention to detail, but the whole way its sales staff approaches its customers tends to win confidence.
“It's a risky market and people who have not rented in it before try to get into it and they get right back out,” says Landry. “Being in this business a number of years, we have grown up with our clients, we have lifelong friendships, we started at the bottom and rose up and they did as well. We're from the community, our kids know their kids, our wives know their wives, we all know each other. How am I going to live around here if I do a bad job? Friendship creates loyalty, but we back it up with good equipment and service.”
To succeed in offshore rentals, the Louisiana Rents staff cultivates close relationships with the contractors that work for the oil companies, and also work directly with the oil company personnel. And while the Lafayette branch specializes in offshore rentals, it also does a lot of construction business.
“We get backhoe and boomlift and excavator rentals because we're doing a good job offshore,” says Rougeau. “In south Louisiana, people talk and word gets around.”
BORN FOR THE JOB
Also getting around is Donald Charbonnet, director of operations for Louisiana Rents. When Louisiana Machinery president Bobby Webb decided to create a dedicated rental division, he needed a manager with rental experience, who knew the Louisiana market, who understood the various rental markets, ranging from the offshore to the petrochemical to the construction segments. He needed somebody who understood equipment and how to structure a rental company separately from the dealership.
If ever a man was born for a role, it was Charbonnet. As the son of a rental company owner, Charbonnet was literally born into the rental business, growing up around his father's company, American Rent-All in New Orleans. Charbonnet began working part time in his dad's business as a teenager, continued through college and after graduation came to work full time. It was a thriving general rental chain, which grew to 17 locations.
In 1990, Charbonnet signed on to work for Robert Buckner's Houma, La.-based Buckner Rental Service. It was with Buckner that Charbonnet came to know the petrochemical and offshore rental segments, which have become the core of Louisiana Rentals' business. It was there that Charbonnet developed a reputation as a demanding but fair manager, the kind of man that expected results but would allow a salesman or branch manager or service manager to use his talents and strengths in his own way as long as the results were there. And it was there that Charbonnet met so many of the people that have formed the core of Louisiana Rents.
It was at both his father's business, which Charbonnet co-owned, and at Buckner Rental Service, that Charbonnet, now 52 and a 36-year veteran of the rental industry, developed his understanding of what really makes a rental company successful. “In creating Louisiana Rents we had a clean slate. In recruiting we talked about what we liked and disliked in previous companies and just took the best of what made sense,” Charbonnet says.
“For example, take service calls. You've got to look at them like it's a medical emergency,” Charbonnet told RER during a 400-mile daylong odyssey throughout South Louisiana. “If you've got a piece of equipment down, what is most important? If you are the guy answering the phone and a contractor has a piece of equipment down, what's the priority? That's how I want our people to think. A medical emergency.
“We're in the keeping-people-working business. Mechanical equipment is going to break, so the company that responds quickest to get it back working is going to keep the business the longest. It's not just the rate. If you can keep that guy working, he's going to say, ‘Their equipment is always working and if we have a problem, they are right there.’ So maybe it is worth paying more to Cat for better equipment that works longer.”
After Buckner Rental Service was acquired by Neff Corp., Charbonnet experienced the corporate side of rentals, working in acquisitions for Neff and later for NationsRent before he was lured back to his home state by the Caterpillar dealership. In building the Cat rental business, Charbonnet logs about 1,000 miles a week, visiting each of the company's seven branches regularly, traveling to the southern branches almost every week and at least twice a month to the more distant northern branches.
“I've seen too many other people that try to manage a business from their desks,” he says. “Even though we have good people, you have to be there, you have to consistently check on the quality to make sure they're living up to the standards that we're trying to implement in creating a new company. At the same time, it's important to listen to your people and hear their problems and their ideas. We need to let them know we care about them, get the pulse of what's going on with the business, how they are and how their families are. All those things are important.
“And we're still at the point where we're trying to put together the best practices we can. Our people have worked for practically every major rental company and everybody does something pretty good. We're not so naïve to think that we got all the answers. We bring the guys together and we'll brainstorm about anything, about order taking, routing, delivery boards, everything. If a guy wants to do something differently, as long as business is taken care of, that's OK.”
Busy as he is, Charbonnet has time to think during his long drives across the vast Louisiana landscape. “One of the things we work hard at is execution,” he says. “If you execute, competition only makes you do better. There's a book called ‘Execution’ written by an executive from Honeywell, where he talks about a manager who wrote a business plan and in order to get more market share, he wrote he was going to reduce prices. But it didn't work. He didn't anticipate what the competition was going to do. Everybody lowered their price and the industry went down. We take the opposite approach. If we can figure out how to execute better than our competition, with fewer and faster service calls, we'll have customers who are willing to pay a good rental rate. That's our goal. The rates are going to have to go up.”
Is the goal working? Ask Mark Zerangue, branch manager of the Morgan City branch, where about 85 percent of the rental is related to the offshore industry. Zerangue got his rental start working for Bucker Rental Service. He managed the Port Fouchon branch, at the southern end of the Louisiana peninsula, where there is one highway in and out. For five years he lived in a trailer on the property of the rental yard, working 10 days in a row and then four days off, which he would spend in Morgan City. Charbonnet recruited him to Louisiana Rents and the chance to manage a branch in his home town and, as he says, “to have a life.” But what mattered even more to Zerangue was the quality of the service Louisiana would offer customers.
“We've got 125 years of experience right here at this branch,” Zerangue says. “And we have about 650 years in the whole company. At previous jobs, it seems like you had somebody new all the time, we were always retraining. Now we've got mechanics who have been doing this for 15 years or more, who are familiar with offshore equipment. And from the beginning, we got a service truck to do remote servicing at the customers job site, rather than having to pick up the equipment and bring it here, and that enabled us to pick up more business than we might have.”
Morgan City is a small community of about 25,000 people and very few places have more rental companies per capita. As Zerangue says, there are about a dozen rental companies within an eight- to 10-block stretch. “But there probably never was a rental company in Morgan City that had much of a working inventory of dirt-moving equipment,” Zerangue says. “Along with the offshore equipment, that made this a great market for us.”
EQUIPMENT DOCTOR
Morgan City is also home to Lee Price, Louisiana Rents' general service manager. Price is another industry veteran, having worked 17 years with Buckner and several other rental companies, in just about every capacity. But as an equipment and mechanical specialist, Price shines in his role as general service manager for all Louisiana Rents because it has given him the opportunity to find equipment solutions to a variety of problems.
For example, for years welding machines could not stand up to the rigors of the offshore application, that after a year or so the corrosion would have them looking like they were ready for the junk pile. Price worked closely with the Lincoln staff to design a severe duty machine, designing galvaneel skids, a stainless steel frame, an emergency shutdown device with external and internal components that could survive in tough environments.
Price also worked extensively with Sullivan to design air compressors especially fit for offshore applications. “We put in an air-water separator because of the moisture problem, a water-fuel separator to prevent water from getting into the fuel, and an emergency shutdown device to comply with MMS regulations,” Price says. “You also need a spark-arrester muffler on the exhaust side. Each machine is also treated at the factory with a cosmoline-based product to protect it from corrosion. Without that the machine would completely corrode after three or four trips offshore. Water-prevention, corrosion-prevention, proper shutdown, galvaneel. Our suppliers really stepped up to the plate to work with us.”
Price communicates regularly with all Louisiana Rents vendors to correct any problem that might be caused by the tough conditions the equipment works in, from shock mounts to wiring issues to just about anything. On a number of occasions, Price designed the changes himself or at least consulted closely with the manufacturers' engineering staff.
Price, dedicated to ensuring that Louisiana Rents' service technicians operate at maximum efficiency, also works to improve shop conditions at all Louisiana Rents branches, such as putting in new roofs to protect shop technicians from the heat, humidity and precipitation that are so much a part of life in south Louisiana. He also assisted in designing new waste-water recycling systems for the branches, and constantly looks for ways to improve efficiency to make workers more productive.
GATEWAY TO POWER
Why is South Louisiana such a primary target for rental companies? To start with, the Louisiana ports and the maritime industry produce about $8 billion of primary spending annually and about $15 billion in secondary spending, according to recent estimates. The Louisiana port system is one of the largest port systems in the world, bringing millions of tons of cargo into and out of the country, as the gateway to Louisiana and the mid-section of the United States. And oil-producing companies pay between $4 and $5 billion annually to vendors and contractors in support-related industries.
South Louisiana is also dotted with hundreds of petrochemical plants and related industrial facilities. Louisiana Rents services the petrochemical industries from several locations, but most prominently from the town of Gonzales, on rental row just outside Baton Rouge.
Even in the industrial market, some equipment has to be especially equipped with pans in case of drips and Louisiana Rents' service technicians must receive OSHA and ANSI training just to enter the plants to fix or service equipment. Louisiana Rents' Gonzalez branch has a wide variety of tools and equipment to service turnarounds and other plant needs.
“We have a lot of things here that most other people wouldn't carry,” says Chris Broussard, Gonzales store manager. “Air horns, hydraulic hole-punchers, oil-free air compressors. It's not uncommon here to get orders for 20 welding machines and four 1600-cfm air compressors. For turnarounds, you have to have it all.”
Not only does the industrial market demand that they have it all, but that they deliver it fast. For example, one contract that the Gonzales branch recently signed making it the first-call provider for Vulcan Chemicals stipulates that when the customer calls, they have to deliver within an hour and a half.
“And they measure it every time,” says Broussard. “They've been with three other companies on contract and we're the fourth. We're graded against everything everybody else has done.”
The Gonzales branch is also home to Chuck Grey, Louisiana Rents' territory manager for electric power generation, HVAC and oil-free air. Grey, who came to Louisiana Rents from GE Energy Rentals, has been empowered with building the market for temporary power, HVAC equipment, air-conditioners, humidifiers, chillers and oil-free air compressors, a highly competitive market in South Louisiana, home of the corporate headquarters of generator giants Aggreko and Welch Generator Rentals.
Louisiana Rents is handling generators up to 2000 kW, air conditioning packages from 1-ton stock coolers all the way up to 90-ton. Grey is attempting to develop the market throughout the state from his base in Gonzales and is educating Cat Rental sales staff about the opportunities for large generator and temperature control rentals.
THE VISION
Power-generation is another addition to the Louisiana Rents arsenal helping it to be positioned as one of the state's most complete rental players, if not its leading rental player. The staff is there, the experience is there, along with strong support from the Caterpillar dealership. But above all, Louisiana Rents vibrates with the passion to serve the customer, to do things better than its competitors, to execute a business plan that involves daily commitment to improve. That kind of commitment can't be fabricated. It has to be heartfelt, and can only be carried out if the company has the experience and the skills and the vision to back it up.
Does Louisiana Rents have what it takes to pull it off? Ask one of its customers next time it's midnight on an oil platform 150 miles off the coast of Louisiana in a rain storm and the crew gets ready to fire up a piece of equipment that Louisiana Rents provided. The proof is in the performance.
AN RER CAPSULE
LOUISIANA RENTS; BELLE CHASSE, LA.
History: Bobby Webb, president of Reserve, La.-based Louisiana Machinery, hired Donald Charbonnet in April 1999 to develop a dedicated rental program. Louisiana Rents opened its first three branches in October, in Morgan City, Lafayette and Gonzales. A year later, Louisiana opened in Port Fouchon, Monroe and Bossier City, and it added its seventh location and headquarters in Belle Chasse, a New Orleans suburb, in February 2002, the Cat Rental Store network's 350th branch.
Key personnel: Director of operations Donald Charbonnet; general service manager Lee Price; general manager of Louisiana Machinery heavy equipment rental Jay Dinger.
Key suppliers: Caterpillar earth-moving equipment and Olympian generators, Sullivan air compressors; Lincoln Electric welders; Bil-Jax scaffolding; Godwin pumps; Wacker compaction equipment and small pumps; Genie light towers, booms and scissor lifts; Partner cut-off saws, Target walk-behind saws; Ingersoll-Rand rough-terrain forklifts and air tools; Ditch Witch trenchers; Broce brooms. Some branches vary their inventory on certain product lines.
Revenue: In 2001, only its second full year in operation, Louisiana Rents and Louisiana Machinery Rentals (heavy machinery rentals) pulled in $35 million in rental volume, ranking No. 29 on the RER 100.
