The theme for The ARA Show™ 2021 in Las Vegas was “Focus on The Future.” If the show was any indication, the future of the equipment rental industry is bright. However, for equipment rental businesses to be ready it’s going to take some advance planning — at least for 2022.
As many equipment rental operators have experienced in 2021, lead times for receiving equipment purchases have grown significantly. In many cases, the cost of new equipment has increased year-over-year as well. With that said, demand from the construction and industrial customer segments is expected to remain very strong in 2022.
All these factors contributed to strong equipment buying at The ARA Show. By most accounts, many original equipment manufacturers (OEMs) are selling more equipment into rental than they ever have — and orders are in earlier than ever — to adjust for market forces.
With equipment supply still very tight, we expect the demand for renting equipment to be as strong, if not stronger, in 2022 than it has been in 2021. The last 18 months have impacted the construction and industrial equipment rental industry in ways many of us couldn’t have imagined. On one hand, we are very fortunate to have extremely high demand for equipment rental. Talking to many of my peers throughout the American Rental Association (ARA) network, there is no shortage of needs from contractors and industrial customers.
With equipment production down and supply chains delayed, more and more contractors are turning to equipment rental instead of buying equipment to help them get their jobs done. There also is increased demand for equipment delivery due to the labor shortage in the construction industry — contractors need to maximize time on the job site.
While the demand side of the equipment rental economy is as strong as ever, the ripple effects of the coronavirus (COVID-19) pandemic have created challenges when it comes to workforce. Since March 2020, millions of people have left the workforce and that mass movement has impacted equipment rental businesses like ours.
It is harder to recruit and retain qualified people, specifically in rental operations, and wages have increased significantly. Many equipment rental owners have been pulled back into the business and are more involved in day-to-day operations. In addition, the demand for training lesser experienced staff has increased significantly.
ARA has supported members with the launch of the ARA RentalWorks Job Board and the RentalU online training platform. We are strong proponents of RentalU and look forward to the launch of ARA’s equipment rental certification program, ARA Certified, in 2022.
With the world changing — and the equipment rental business evolving — technology will continue to play an increased role in the future of equipment rental operations and customer service. Equipment rental businesses will need to advance technology within our operations to stay competitive, efficient and relevant.
As the cost of equipment and labor continues to rise faster than rental rates, we need to utilize technology to maximize time and do more with less. New rental software features, telematics and other information-based technologies are necessary game changers.
John Jeanguenat is president of RentalMax, Carol Stream, Ill., and the American Rental Association (ARA) Equipment Rental Shared Interest Group co-chair.
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