Cost and Fee Guide to Rental Equipment

 

When you go to rent a piece of equipment you might ask yourself “What is a damage protection policy?” or “What the heck is an environmental fee?”  Construction rental companies are known for charging many fees that at times may seem cumbersome or esoteric.  Here we will dissect what some of these costs are and what they mean.


1. Base Price

The first and single most costly fee is the base cost of renting the equipment. Depending on the supplier  and your timeline for the equipment it may be cheaper to rent at a weekly or even monthly rate rather than a daily rate. For example a scissor lift near San Francisco can be rented for around $100/day, $200/week, or $700/month.  

The base price is primarily determined by supply and demand dynamics in the equipment marketplace. If the current construction market is booming, rental construction base prices may be driven up as fewer pieces are remaining idle in suppliers warehouses. Likewise if a particular piece of equipment is a rare piece, the rental price of this equipment may be slightly higher than a more commonly utilized piece.

2. Delivery Price

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Unless you plan on going to the equipment supplier yourself and picking up the needed equipment, the only other option is to get the equipment delivered to you. Delivery price schedules usually follow the pattern of being fixed within a certain radius from the supplier’s shop. Once a max distance has been reached the supplier then charges a variable fee depending on the additional distance according to some predetermined formula.

This fee highlights the importance of researching suppliers that are closest in physical location to the job site and knowing the delivery price policy of those suppliers.  For San Francisco a rule of thumb in regards to delivery costs is $125 each way for delivery within 50 miles of the rental supplier.

3. Environmental Fees

The environmental fee is an optional fee that is not government mandated and is charged to offset the wide range of environmental expenses an equipment provider may incur.¹ As rental companies deal with many environmentally harmful materials including fuel, oil, and cleaners, they have a high risk of directly or directly incurring environmental harm. In order to offset this risk some rental companies charge an environmental fee which is usually a flat fee attached to larger pieces of equipment. The revenue from this fee is used to fund procedures (such as waste run off disposal) that are compliant with federal, state, and local environmental regulations.

4. Fuel Payment

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Rental companies usually have multiple policies when it comes to charging for the fuel.  Some companies have a “Return Full Option” which means the equipment is returned full of fuel (you refueled it to max capacity). A common secondary option is the choice to “Pay on Return” which means that you pay for the fuel used according to the supplier’s fuel charge policy.

Depending on the amount of fuel used and the rental supplier’s fuel charge policy it may be cheaper to refuel the equipment yourself. Ensure you understand the fueling policies if you do wish to fuel the equipment yourself.

5. Rental Protection Fees

Some rental companies offer an optional fee for a protection plan on the rented equipment. Commonly this is referred to as a “damage protection” or “rental protection plan”.  Not to be confused with an insurance policy, these plans are optional add-ons that can offset costs in the event the equipment you rent is damaged.  

The terms of these plans can differ depending on the rental supplier.  An example term of the protection plan would be no charge for repair cost up to $250.²  Be sure to read the supplier’s terms and conditions regarding the protection plan and gauge whether it is worth the additional charge.

Summary

Overall, it is important to understand the full price of the equipment you’re renting, as many companies only advertise their base prices. When weighing which rental supplier to go with, be sure to get confirmation of the full out-the-door price. Getable.com is a great resource that lets you compare multiple suppliers and get true out-the-door pricing in order to make sure you’re getting the best deal.

References

¹https://www.sunbeltrentals.com/customerservice/fees-and-optional-charges/
²http://harcorentals.com/customer-service/optional-fees-and-charges

Step by Step Guide to Renting Construction Equipment

 

You’ve realized that it would be better to rent than to buy the construction equipment. Now what? The process for renting construction equipment can seem daunting but by following the instructions below, you will preemptively save yourself from many potential headaches.

1 . Determine the Dates and Equipment Needs

Before you rent are you sure of the exact piece of equipment you need?  Does the job require earthmoving equipment? Aerial work platforms? Porta-Potties?  Knowing the best equipment piece for the job is the first step. There are usually many models and sizes for any one type of equipment. Knowing your needs prior to renting will make your selection process much smoother and quicker. After selecting the specific type of equipment you want the next question that requires answering is “For how long do I need the equipment?”. The time period you will need the equipment is sometimes referred to as the duration of the equipment.  Once the “what” and “when” questions have been answered, it’s time to actually start the procurement process.

2. Perform Cost/Distance Research

Now that you know the exact type of construction equipment you need, you now have to find a supplier to rent the equipment from.  The obvious consideration here becomes the basic cost of the rental. Usually construction rental companies offer a daily, weekly, and monthly rental rate on the pieces of equipment.  This is where your prior research on the needed duration comes in handy.

There is an additional factor when deciding on your rental supplier.  The distance between the drop site and the rental supplier can be a cost factor if the equipment is being delivered.  The greater the distance between the drop site and the supplier, the more expensive the delivery cost.  Some suppliers have a fixed delivery rate while others have a variable delivery rate based on the distance.  Make sure you understand the terms of the delivery so you don’t incur additional charges.

3. Additional Fees.

In addition to the basic and delivery costs there could be other costs incurred. Some rental companies charge “environmental fees” or fees related to insurance to protect the equipment. Be sure you have a clear understanding of all of the fees related to the equipment you are renting. In addition be sure you have the equipment returned in good condition, else the rental supplier may have ground to charge you an additional fee.

4. Choose Your Rental Supplier

After performing research on suppliers, a contractor can choose the supplier that best fits the needs of the contractor at the lowest cost.  The most difficult part of this entire process is the research to find the best deal from suppliers. As the old saying, time is money and cost research can take some time.

Getable.com offers a platform where you can directly compare the associated costs for renting a given piece of equipment for a certain duration. With some suppliers you even have access to “out-the-door” prices so there are no surprise charges incurred.

Example of the Rental Process

Let’s assume that a San Francisco contractor accepts a contract that requires a 2,000 lb mini excavator for two weeks. Since the first step is complete let’s move to the second. The contractor now should perform cost research to find the best deal.  An option would be to google “mini excavator”, call up individual rental companies, get individual quotes, and compare each quote against each other. However there is a much quicker, simpler method available. By visiting Getable.com, the contractor can save valuable time by directly comparing the costs of different suppliers.

Once the contractor arrives on the website, he need only select “Mini-excavators”, type in zip code near his location (94101), and choose the supplier that offers the lowest cost to him. From there he can complete the entire checkout process online without ever having to call individual suppliers.  This saves the contractor time and thus money.


Renting equipment should be a headache free process. Follow this guide and your rental process should be smooth and incident free.


Buying vs. Renting Construction Equipment

It’s one of the most impactful financial decisions for all construction companies, regardless whether you’re a small, medium, or large company. Do you rent or buy the required construction equipment?

There are many important considerations when making such a strategic decision.

1. Financial Impact

The most relevant and thus the first question to be asked when making the rent vs. buy decision is “Does the business have enough capital to buy the necessary equipment?”. Heavy construction machinery is an extremely expensive investment.  If the company currently lacks the necessary financial capital for a large cash outlay, renting may be the only other alternative. If the company does have the financial flexibility necessary for the equipment, other considerations such as the amount of equipment utilization or job frequency come into play.

2. Equipment Utilization

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For companies with excess financial capital, the most important factor in the rent vs. buy decision is estimated equipment utilization.  Few contractors or businesses will have equipment that is utilized 100% of the time.  In order to predict the rate of utilization, a common industry calculation is to divide the days utilized in a month by 22 days.  (An alternative metric for added accuracy is hours utilized divided by 176 hours)

For example, a piece of equipment that is utilized for 10 days in a month has a utilization rate of 45% (10/22 = 45%). A useful metric amongst industry insiders, companies should only think about purchasing equipment if they expect utilization to be above 60%.¹  Alternatively, if the equipment has a utilization of less than 40%, renting becomes the preferable acquisition method. From 60%-40%, other factors such as available capital and job frequency become the primary decision factors.

3. Job frequency/Project Length

The rule of thumb in this category is the shorter the job, or the more specialized the equipment, the better renting is for the business.  Given a project with a very long timeline or if multiple projects are in the pipeline, owning the equipment may be the most cost effective method.  This also supports the idea of purchasing multi-use equipment (scissor lifts, excavators, loaders) if purchasing seems to be the best method. In addition if jobs are relatively infrequent, renting when additional equipment is needed would be a more cost effective solution than purchasing extra equipment.

4. Administration and Handling of Equipment

Are you interested in managing a large fleet of construction equipment?  Buying can be cost-effective in the long-term, but adds a large amount of administrative tasks and overhead costs along the way.

In the event of an equipment breakdown, a company will either need to have able mechanics on staff or hire external mechanics and repairmen. Both options can be very cost restrictive. Internal mechanics can run up a lot of overhead costs. On top of their compensation, they will likely need tools, computing equipment, and a shop to work out of. External mechanics generally charge a high hourly or project-based rate.

If the equipment is rented however, the company only needs to inform the entity whom they rented from. If they’ve rented from a reputable company, they should be confident that the situation will be rectified. By leaving administrative and maintenance tasks to the renting service, a construction company is able to maintain focus on its core functions.

A final deterrent from purchasing equipment is the presence of increasing regulation regarding construction equipment emissions. Due to stricter emission requirements from the EPA equipment purchasers must ensure their equipment does not violate industry standards.² If the equipment violates the guidelines, the company could be subject to significant governmental

5. Trends

Over the past few years there has been a clear trend in the construction equipment field. The procurement decision is becoming more rental focused than outright buying the necessary equipment. Between 2013 to 2014 the frequency of rentals increased by nearly 75%³

A second noticeable trend is the greater emphasis on rental of multi use equipment over single use equipment.  This is reflected in increases of rentals of multi-use compact track loaders with simultaneous decreases of rentals of single use bulldozers.

Summary

There are many factors that should be considered in deciding whether to rent or buy construction equipment needed.  Depending on the size and nature of the individual construction business, one option may be superior than the other.⁴ While your own business might have additional factors to consider, these should provide a starting point in thinking about the rent vs. buy decision.

Looking too see how much it costs to rent the equipment you need? See pricing for all equipment online at Getable.com.

References

¹http://media.cygnus.com/files/base/FCP/document/2012/03/03192012_trendsinowningandrent_10658556.pdf

²http://www.aem.org/PDF/Manfredi-StudyBrochure.pdf

³http://enewsletters.constructionexec.com/managingyourbusiness/2014/11/heavy-equipment-trends-rentals-are-up-new-equipment-is-preferred-and-adaptability-is-key/

https://www.rbauction.com/blog/when-to-buy-or-rent-heavy-equipment-%E2%80%93-five-factors-to-consider-

10 Safety Tips When Using Heavy Equipment

 

Heavy equipment can make for a very impressive, and intimidating sight.  Resembling large beasts of metal and wire, these constructs enable humans to complete tasks that would otherwise be impossible.  However as with any powerful tool, caution must be taken when handling construction equipment.

It’s important to stay safe when handling any type of heavy equipment including lifts, excavators, etc. This is especially true if you’re new to handling heavy equipment and machinery. Here are 10 tips to keep you, everyone around you, and the equipment safe.

1. Ensure you have the proper training before you even get on the piece of equipment.

Before even mounting a piece of equipment, be sure you know how the machine operates. The best way to do this is to review the manufacturer’s operation and maintenance manual. An improperly or under trained worker poses a danger to himself and others on a jobsite. Be sure to detail what you’ll be doing with the equipment to the professionals that you’re renting from. They’ll be chock full of expert-filled advice.

2. Be extremely careful when mounting a construction vehicle.

What is the most common injury related to the construction workplace? Falling bricks? Cranes tipping over? Runaway jackhammers? Actually the most common construction related injuries are those that come from getting on and off the machines.*  Thus it is important when boarding a vehicle to ensure that you are wearing gloves and boots and have a secure grip on the rungs of the vehicle. In rainy or muddy conditions, exercise additional caution as hand holds or steps are harder to grip.

3. Ensure there are no people in the operation area.    

People love to watch construction machinery in action. Even if this means crowding around a backhoe as it does nothing more than dig a hole.  Any experienced equipment operator knows this creates a high risk environment when a group of onlookers are around these powerful machines.  Ground operators should stand clear of a machine in operation, in order to minimize the chance of injury to themselves. Machine operators should use their horn or communication channels to warn those on the ground to stand clear.

4. Always wear protective gear.

Protective gear includes hard hat, goggles, fall gear, and more. It always better to be proactive than reactive.  Wearing protective gear is a key example of this.  By wearing personal protective equipment (PPE), a construction worker greatly reduces the risk of common mishaps on construction sites. Common protective equipment includes high visibility vests, hard hats, gloves, goggles, and fall protection equipment. Though it may seem cumbersome, the purpose of the gear is for the wearer’s well being.

5. Never exceed the prescribed payload of the vehicle.

Every machine has a corresponding manufacturer’s manual for operation and maintenance. In this document, the max payload that a vehicle can handle is outlined. Never exceed a machine’s payload as this greatly increases the risk of malfunctions such as machine upset or even machine rollover.

6. When operating a machine, wear your seat belt.    

Though it may seem more applicable to operating an automobile. The mantra of wearing your seat belt is true for construction vehicles as well.  Though there are many supposed defenses for not wearing a seat belt, it could save an operator’s life.  In the event of a rollover (in which the construction machine falls over due to some malfunction), the seat belt could be the sole determinant between life and death.

7. Be vigilant when backing a construction vehicle.

Moving a large piece of machinery forward can pose some dangers. Moving it in reverse only increases the riskiness of the situation.  When backing a vehicle, the operator must ensure that there are no obstacles or people behind them. To do this it may be necessary that the operator exit the vehicle and physically check to be sure the perimeter is secure. In addition, observing the mirrors while moving backwards should allow the operator to be situationally aware.

8. Be aware of overhead or subterranean obstructions.

Many obstructions can pose dangerous risks to a machine operator, some of which are not easily visible.  An operator should especially be cautious of hard to see power lines, overhead clearances, or underground utility lines.  Before digging, be sure to perform site research to ensure there are no underground pipelines or other subterranean obstructions that could pose risks to machine operators.  Avoiding these common obstacles can ensure a construction site is safe and does not incur extra damages.

9. Keep an eye open for a construction vehicles' blind spots.

Let’s revisit the car analogy. Like any automobile, construction vehicles have areas that cannot be scene by simply using the mirrors in the operator’s cabin.  In order to accurately gauge that these areas are free of obstructions or people, an operator must physically leave the cabin and perform a visual inspection. Though it may seem tedious, these visual inspections greatly reduce the risk of an accident occurring on the construction site.

10. Communication is key.

A well designed communication system is arguably the best safeguard against construction related accidents. Whether through two way radios, walkie-talkies, or some other system, effective communication is crucial for preventing workplace accidents.  Communicating the current status of a construction site allows all operators present to stay informed and to stay out of harm’s way.


 *http://www.forconstructionpros.com/article/10302747/top-ten-construction-safety-tips

The Repairman and the Burning Man

Many people associate the festival of Burning Man with the art and the unique individualistic expression it allows. What is necessary to bring this festival to life?  The construction of the desert metropolis and even the Man himself is no small feat.  Bearing this in mind - it is little surprise that to bring the Man and festival to life, a small army of construction vehicles are used to keep everything in place and running. And who keeps this army up and running? I spoke with the machine whisperer who keeps the machines in tip top shape, Rick Rea.

Rick Rea, the equipment whisperer

Rick Rea, the equipment whisperer

Rick has been a key part of the Burning Man festival for quite a few years now.  So what keeps him taking the pilgrimage from Fallon, Nevada to Black Rock City each year? “It’s the people.  Lot of it has to do with the people I work with. They are professional in every way they do their jobs. They are like family,” Rick says.  Though he is mostly a one repairman show, Rick takes pride in the great support system he has available and it’s very obvious the man loves the team he works with. “All the people I work with walk away from their day jobs to help this festival happen, it’s really something special,” Rick says.

Boom lift at Burning Man

Boom lift at Burning Man

When I asked about the construction equipment that gives him the most trouble, he paused for a moment and then replied “has to be the aerial work platforms.” According to Rick most of the equipment is computerized. The fine dust of the dry lake bed is easily disturbed and can lodge itself in any of the computer systems and commonly causes issues. I asked what is the most common advice he gives when the computer system is malfunctioning. He chuckled and responded “I ask the operator ‘have you tried turning it off and back on’?”

The construction vehicle fleet is comprised of a number of aerial work platforms (such as scissor lifts), boom lifts, a backhoe, and some other miscellaneous vehicles. When asked what his favorite or most interesting piece of equipment is, Rick responded “Has to be the boom lifts. We have 135 foot boom lifts used in the construction of the Burning Man and some smaller ones... they’re amazing to watch in action.”

The most interesting thing he notes out there? The art.  “Every art piece has a story behind it and the people who create always have stories to share,” Rick says.  One of the most popular art pieces at the 2015 Burning Man festival “almost didn’t make it.” “It was a piece from the Ukraine and it got held up in customs for so long it made it here just in time.” The sculpture is call “Love” and was created by Alexandr Milov of Odessa, Ukraine.  The powerful piece demonstrates an outer conflict between two humans while internally the two long for peace.  “That’s the best thing about art,” Rick says “It’s a universal language.”

Burning Man holding hands

Burning Man holding hands

Rick is there before the festival begins for prep work and stays long after the last festival participant has gone.  He’s the man behind the curtain keeping the lights on and a genuinely nice guy.  If you need equipment repaired in Nevada or want to learn more about Rick’s repair wizardry visit his facebook page here and give it a like. Alternatively visit his company’s site R&B Mobile.com and show him some love.