Equipment Rentals: How They Work and Whom to Deal With

30 May 2014
 Categories: Business, Articles

Knowing whom to rent heavy equipment from in a given situation can make a big difference in sourcing the right equipment for a given project, affecting the project's success as well.

The Problem With Ownership

The cost of actually buying heavy equipment can be prohibitively expensive for a company. This includes not just obtaining the equipment but having the means to move it as well. Additionally, most heavy equipment needs an operator who understands how to use the equipment, its risks, and the possible capabilities. Without that knowledge, a rookie operator could cause a lot of damage very quickly, or even damage the equipment itself, triggering a hefty replacement cost.

Why Rentals are Attractive

Heavy equipment rentals solve the cost problem of purchasing and ownership by allowing parties to obtain the equipment they need on a temporary basis instead. Since the project owner doesn't have to purchase the items, the cost is limited to a far smaller amount of just borrowing the items for a fee. Once the use period is over, the equipment is then returned and the borrowing fee, or rent, stops. That leaves valuable funds available for other project uses such as supplies, labor, technical skill, land purchase, and other critical components.

Equipment Renters

However, relying on equipment rentals has its own pitfalls for those new to the market and not fully understanding how equipment can be procured. There are generally two types of sources: equipment renters, middlemen, or equipment brokers. Equipment renters actually own the equipment to be used, maintain it, fix it, and replace it when the rentals are too used to be effective anymore. They charge rent to recover their purchase cost, maintenance and a profit margin.

The middleman or equipment broker doesn't own anything. This is an agency that promises to obtain all types of equipment in different locations but in fact works with a network of equipment renters to actually fulfill client needs. The service they provide is giving a client one point of contact for renting equipment instead of five, ten or twenty different outfits. This can be extremely beneficial if a client is running projects in multiple locations or in different countries. The middleman or equipment broker provides a smooth contracting process as well as the local market expertise to find the right equipment when it's needed and where it's needed. For this service the equipment broker charges the same costs as the equipment broker, as well as the broker's service fee on top. In comparison, the cost will be more than working direct with an equipment renter, but the client receives convenience in exchange.

Chicago-Specific Benefits

Equipment rentals in Chicago IL work generally the same as any other domestic location, with both types of equipment sourcing providers being available in the wider region. Because Chicago is a main import-export point of the U.S., the region also frequently has access to more exotic equipment that won't generally be available in other locations. These options range over everything from accelerated timber cutters to water tenders, to skyscraper cranes and more.

Protection from Risk

Clients should still make sure to have insurance in place to cover any accidents that occur when using rented heavy equipment. Some providers may include a temporary insurance policy with their equipment packages, but these tend to be marked up a bit. A client is likely better off just obtaining a separate policy from a third party insurer instead, covering the specific equipment, time period, operators, and project involved. Not doing so could be a big mistake as the client will be on the hook for any repair or replacement of damaged units on return.

Overall, Equipment rentals can be an advantageous tool for project managers and owners who need heavy equipment but don't want to put out the capital outlay to by the same units. Equipment renters and equipment brokers can both meet the needs of clients, each having advantages, depending where a client is running a project. Yet in every instance, protection coverage should be in place in case something goes wrong as a financial safety net. If you have further questions, click here for info about renting equipment.