Interview with Kurt Barney, Vandalia Rentals: Good, But Not Easy

RER: How was your year, 2023, overall? Not necessarily in numbers or percentages, just in general?

Barney: For us, 2023 marked a return to normalization, especially as the year went on. During the first half of 2023 the majority of equipment manufacturers began catching up and our fleet purchases (mostly) arrived as scheduled. This allowed us to begin the process of addressing our replacement cycle, which had been pushed much of 2020-22.

What kind of year do you expect in 2024? Not necessarily in numbers or percentages, but generally up or down? By how much, roughly?

We feel 2024 will be a good year, but not an easy year. Strategy will matter again and operators that plan/execute accordingly should do well. Construction activity remains near all-time highs, infrastructure spending is moving forward, and the challenging labor environment is unlikely to abate in the near term. We feel activity will continue grinding forward at a pace similar to the back half of 2023 for all 2024.

How was demand in your marketplace and what do you expect in 2024?

Local demand continues to remain healthy, and backlogs look good.  The last half of 2023 is now closely aligning with pre-COVID seasonal trends, which we think will continue through 2024 as well.

Any interesting new developments in 2023? New branches, product lines or segments, acquisitions, new software or telematics, new people, new emphasis?

In 2023 we continued to make investments within our four key areas of focus: talent, fleet, footprint, and technology. We onboarded and promoted several experienced individuals aimed at increasing penetration within each MSA we operate in; opened a brand new five-acre, 20,000 square foot facility on the east side of Cincinnati; added $30 million in new equipment; and deployed several new technological advancements.

Any interesting changes planned in 2024? New branches, product lines or segments, acquisitions, new software or telematics, new people, new emphasis?

We’ll always add talent and fleet as it makes sense to do so. In 2024, we plan to continue expanding our footprint via greenfield expansion while remaining open to acquisition opportunities as they arise. We’re also investigating a specialty-focus division, but that may not materialize until 2025. On the technology front, we’re in the final stretch of a few multi-year projects, including having nearly all our major rental cat classes on a single, integrated telematics platform.

How are rental rates? Have they peaked?

Rate pressures continue and will always be part of this industry.  Our focus continues to be ensuring we meet the demands of our customers and while delivering value that supports the rates we must charge to do so.

Is the marketplace more competitive now than a few years ago?

Overall, I don’t think the competitive landscape has changed dramatically over the last five years.  Continued consolidation has led to fewer independents and a strong consolidator presence in most major markets.  We’re a mid-market, regionally focused provider that’s small enough to know customers by name yet large enough to supply nearly all their needs.  We like our position within the market and look forward to competing alongside anyone, big or small.  Competition makes us all better.

What do you expect for 2024?

With the increased acquisition, operating, and carrying cost of equipment ownership, combined with the current state of economic and political uncertainty, we feel this creates a compelling case for equipment rental.  Absent anything major, 2024 should be another record year.