The theme for the 2021 ARA Show ™ in Las Vegas was “Focus on the Future”. If the show was any indication, the future of the equipment rental industry is bright. However, getting equipment rental companies ready will require some planning up front, at least for 2022.
As many equipment rental operators have known in 2021, the lead times for receiving equipment purchases have increased significantly. In many cases, the cost of new equipment has also increased year over year. That said, demand from the construction and industrial customer segments is expected to remain very strong in 2022.
All of these factors contributed to strong equipment purchases at the ARA show. By most accounts, many original equipment manufacturers (OEMs) are selling more rental equipment than they ever have – and orders have come in sooner than ever – to accommodate market forces.
With the supply of equipment still very tight, we expect demand for equipment rental to be as strong, if not stronger, in 2022 than it was in 2021. The past 18 months have had an impact on the construction and industrial equipment rental industry in several ways. could not have imagined. On the one hand, we are fortunate to have extremely high demand for equipment rental. Speaking to many of my peers across the American Rental Association (ARA) network, the needs of contractors and industrial customers abound.
With the decline in equipment production and the backlog of supply chains, more and more entrepreneurs are turning to equipment rental instead of purchasing equipment to help them do their jobs. There is also an increased demand for equipment delivery due to the labor shortage in the construction industry – contractors need to maximize the time spent on the job site.
As demand from the equipment rental economy is stronger than ever, the ripple effects of the coronavirus pandemic (COVID-19) have created labor challenges. Since March 2020, millions of people have left the workforce and this mass movement has had an impact on equipment rental companies like ours.
It is more difficult to recruit and retain qualified people, especially in rental operations, and wages have increased considerably. Many rental equipment owners have moved back into the business and are more involved in day-to-day operations. In addition, the demand for training less experienced personnel has increased considerably.
ARA has supported its members with the launch of the ARA RentalWorks job site and the RentalU online training platform. We are strong supporters of RentalU and look forward to the launch of ARA’s equipment rental certification program, ARA Certified, in 2022.
As the world changes and the equipment rental industry evolves, technology will continue to play an increased role in the future of equipment rental operations and customer service. Equipment rental companies will need to advance the technology within our operations to remain competitive, efficient and relevant.
As the cost of equipment and labor continues to rise faster than rental rates, we must use technology to maximize time and do more with less. New features in rental software, telematics and other information-based technologies are a game-changer.
John Jeanguenat is President of RentalMax, Carol Stream, Ill., And co-chair of the American Rental Association (ARA) Equipment Rental Shared Interest Group.
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