Fleet Management Solutions

Garry Westerweller, a 50% partner in Atlantic Rentals and Equipment, has more than 25 years in the aerial equipment rental business. In 2001 he realized his lifelong dream of starting his own company after years of working for national and large regional rental chains in such positions as dispatcher, service manager, and national operations manager. Atlantic Rentals and Equipment, Farmingdale, N.J., represents Haulotte, JLG, and Gradall products and serves the tri-state region of New Jersey , New York , and Pennsylvania . You can reach Garry at garryw@atlantic-rentals.com .

August 18, 2004 -

360 : Is there a magic formula for managing a rental fleet?

GW : One large rental company I worked for in California turned equipment over every three years. But I believe there is still a lot of life left in equipment that age. The formula is different depending on the size of the company, the utilization rates of the equipment, your ability to service machines, etc. In my opinion, you don't start to get a return on your investment until the equipment is paid for, as long as the maintenance costs are kept down. That's provided that manufacturers haven't introduced equipment that is technically superior or that has better safety features than what you carry in your fleet.

360 : What makes a good fleet mix?

GW : As an independent getting started in the rental business, we found that there was a lot of high-quality/low-usage used equipment available being turned over by the national chains. Buying used equipment allowed us to make a cost-effective entry into the market. But ultimately, you have to have a mix of new and used equipment. The ratio depends on your customer base. Our fleet is currently made up of about 65% new equipment.

360 : How do you evaluate what your customers want?

GW : The bottom line is utilization, but feedback from customers and the sales people is important. To be successful, I think you need to have at least 75% utilization of your fleet no matter what the mix is of new and older models. To be honest, a lot of customers don't care what color the machine is or how new it is. They just want it to go up X-amount of feet and not give them any service problems. If you have a machine that is always the last to leave the yard, it could be an indication that it is a unit that needs to be turned over. It could be that it's not a popular model among customers. It could also mean that it is in the shop more often, thereby making it less frequently available.

360 : Explain how maintenance costs factor into the equation.

GW : Obviously you have to weigh your maintenance costs versus total revenue. We put suspect machines on a watch list over a period of months to determine if it's time to turn them over.

You have to also look at your fleet mix. It's important to have commonality of brands and models in order to keep you parts inventory down. It might be a better decision to offload an oddball brand and replace it with something more similar to the rest of your fleet.

360 : How do you evaluate new equipment being introduced by the manufacturers?

GW : The technology hasn't really changed all that much. Over the years there have only been a few advancements, such as pothole protection on scissor lifts and proportional control, that have spurred the need to upgrade your fleet. Rather, it is usually more important to evaluate the package-the features you get for the money.

For example, when comparing large deck scissor lifts, we took on the Haulotte line even though it was not that well known at the time. The Haulotte machines had a price advantage when you considered the features you got for the money-standard four-wheel drive, standard diesel power, standard dual-extension deck, and standard foam-filled tires. The drawback was that customers weren't used to using a diesel-powered machine. In the U.S. , it is ingrained to want a machine with dual fuel. So it was an education process. If the application was outside, the customer didn't really need the dual fuel option. Plus diesel runs more efficiently and the fuel costs less. It is also more readily available on the job site. Today, the demand for Haulotte machines in our fleet has increased ten-fold.

360 : Any other words of advice?

GW : When you think about fleet management and its relationship to serving the customer what differentiates one rental company from another is how you sell the whole package. For example, among our customer base are contractors with fleets of their own. Their equipment is on the move so much that they don't have time to maintain it. The equipment just gets run into the ground. Yet, the contractor needs his fleet to last a lot longer than we do, but we have a great service department at our disposal. One way we are better able to serve that customer's needs is to sell them maintenance plans for their own fleets. Ultimately, how you manage your fleet, your company philosophy, and the level of service you provide are all important.