In today's tough economy, many companies face unprecedented challenges that are forcing them to scale back and rethink their approach to managing business. During financially challenging times, when new projects slow down, credit markets tighten and capital expenditures dry up, cost control becomes increasingly important. Companies shift focus, place more emphasis on their core business and look for viable options to contain expenditures on equipment fleets and labor. Some businesses are choosing to rent versus buy pumping equipment for a wide variety of projects because it makes sense economically.
Cost Advantages for the Customers
According to Brandon Kuglin, pump coordinator at BakerCorp, there are many benefits to the customer tapping into the rental industry in a tough economy. "There are cost advantages for renting versus purchasing," says Kuglin. "If a company purchases a piece of equipment, it requires a significant commitment of capital, which may not be in the customer's best interest during a tight credit market where financing can be more difficult to obtain. Renting pumps frees up valuable cash flow that most companies need right now to ride out the recession."Customers must also take into consideration not only the cost of the equipment, but also the hidden costs associated with it, such as insurance, depreciation, storage, transportation, maintenance and repair. Additionally, in a purchase situation, there is negative cash flow. Customers who purchase equipment can only write off so much per year in taxes by amortizing or depreciating the equipment during longer periods of time."With a rental, the burden of capital outlay, maintenance and repair is transferred to the rental company. The tax benefit to the customers is that they can write off the entire expense in one year," adds Kuglin.
Expertise, Quality and Flexibility
Other advantages to renting pumps include equipment and application expertise, quality and availability of the latest equipment and, finally, flexibility of equipment replacement for fluctuating job requirements. Rental companies differentiate their products and services by providing advanced application and technical expertise to customers. Larger rental companies send out trained experts to customers' locations and job sites to assist the customer throughout the project planning, implementation and troubleshooting stages of the job. They also provide 24-hour customer support for the maintenance and repair of equipment during a job."This level of support is particularly valuable to the customer because rental companies make significant investments to continuously train their employees on the latest applications and equipment, as well as follow changing regulations. In today's economy, many companies have been forced to make tough decisions to cut back on talent as well as training-related costs. An outside rental company supplies the expertise needed to support the customer's needs on a jobsite," says Kuglin.Another key advantage afforded to customers through rental companies is access to quality equipment and the latest technology. To remain competitive, rental companies continuously invest in equipment fleets by purchasing the latest technologies, operating younger fleets and maintaining the quality of the equipment through comprehensive maintenance programs. This sustained focus on quality ensures the customer receives a reliable, efficient, well-maintained piece of equipment. Equipment failure from a pump that is not well maintained can lead to higher operating costs and greater problems, such as production stoppages and environmental and safety-related issues.Equipment flexibility is paramount to fluctuating needs once a job has started. "As much as everyone plans carefully, things change. Unforeseen circumstances do occur and project parameters or applications often change during the course of a project," says Kuglin. "If you have purchased a pump for a specific application type, that same pump may not work effectively in another application. Basically, you are stuck with it. Sure, you could sell the purchased equipment, but it will be at a significantly reduced cost and you will lose money. It is easy to make the switch when renting equipment," adds Kuglin. Renting allows the flexibility to turn in equipment and lease different equipment as the needs of the job change.
Rental Company Options
In addition to the numerous equipment and cost advantages offered by rental companies, businesses today have many options when it comes to choosing the right pump rental partner. National, pump-exclusive companies with locations across the United States offer a wide variety of pumps and extensive experience in a broad range of applications, from small, single-unit jobs to complex, large applications.Vertically integrated national companies offer a total solutions approach to pumping applications. These companies not only offer extensive application expertise and large inventories of pumps, but they also offer comprehensive equipment packages that include pumps, containment tanks and filtration rental equipment. Using a vertically integrated company allows businesses to bundle their equipment packages into a cost-effective solution, thereby eliminating the need to rent from several different equipment providers. Other alternatives available to customers include regional and local players that carry limited equipment options and focus on smaller geographic territories.According to Global Program Manager Laurel Donoho at Frost & Sullivan, "Renting removes the risk and cost associated with purchase-as long as you have an effective and dependable rental supplier." It is critical to find not just the right equipment in today's pump rental market, but also a trusted partner who will bring the highest level of service and relationships."As one major supplier has commented, 'Service is key to everything,'" adds Donoho. "Having the right equipment is step one. Being able to provide key service and support components is the next level. A good supplier also has a level of passionate commitment about being there for customers, no matter what time of day, where they are located, or the situation."