Renting equipment: What to do and what not to

Renting equipment: What to do and what not to

The global construction equipment rental market is expected to grow at a CAGR of 5.1 per cent through to 2029, with the Asia-Pacific region contributing the most to this expansion. In India, infrastructure development is especially boosting demand for rental construction equipment. While that spell...

The global construction equipment rental market is expected to grow at a CAGR of 5.1 per cent through to 2029, with the Asia-Pacific region contributing the most to this expansion. In India, infrastructure development is especially boosting demand for rental construction equipment. While that spells good news for rental companies, users are facing challenges on account of the spurt in demand. Here, they outline the top issues and ways to mitigate them. Short supply The primary challenge for both suppliers and users in the equipment hiring landscape is to match the demand and availability on a given instance for a specific location, opines Unmesh Nerkar, Executive Vice President - Supply Chain Management, Tata Projects. “The dearth of good quality aggregators accentuates the problem. Our norms on equipment ageing are more stringent than the market standards, which reduces the fleet universe for us to choose from.” “When we have multiple ongoing projects with stringent delivery deadlines, we face challenges on account of the high demand for rental equipment leading to inflated prices and delivery delays,” says Prasanta Kumar Ray, Head - Plant & Machinery, Heavy Civil Infrastructure, L&T Construction. “Not many agencies are ready to invest in high value equipment without having enough projects in hand (from one or multiple clients) to recover the capex investment substantially, if not fully.” “The availability of the right equipment in the vicinity of the project, especially in rural areas and in some specific cases, in urban areas, is the biggest challenge we face in renting construction equipment,” adds Sabbineni Rambabu, Vice President - P & M, Kalpataru Projects International. The lack of availability of equipment is a huge challenge, agrees Chaitanya Bhagde, Manager, Plant & Machinery, Shapoorji Pallonji. “But building a good relationship with reliable equipment rental companies with a large portfolio can help overcome this issue. We prefer companies with set standards and a good fleet as they are more likely to provide emergency services and immediately attend to breakdowns.” To tide over this challenge, Tata Projects conducts extensive research on which machines would be best suited for the work at hand. “We also engage proactively with big fleet owners and when the rental equipment has to match a stated project specification, we ask OEMs to help identify rental companies that are willing to invest in upgraded models,” explains Nerkar. “To overcome the challenge of finding reliable vendors offering reliable equipment of a good quality, especially during peak seasons, we network extensively and research the market, we read reviews of existing rental players and we book equipment well in advance because sufficient lead time gives the renting agency time to purchase new equipment if they plan to,” says G Boopathi, Director, Planning, Uniqcore Constructions India. Sourcing and finalising vendors on a pan-India basis can help surmount the availability challenge, concludes Rambabu. Quality concerns Downtime and productivity losses owing to inadequate maintenance by the supplier is another challenge, according to Nerkar. “We tackle this by conducting thorough pre-dispatch inspections and checking the compliance to equipment ageing norms.” “We inspect equipment beforehand to ensure it is in good condition and functions properly,” echoes Boopathi. Equipment must be thoroughly inspected before entering into a rental agreement to ensure it is in good working condition, meets safety standards and complies with legal requirements, adds Bhagde. “Even after the machine is put to use, it is advisable to carry out daily inspections and record its usage and the monthly maintenance procedures. Concerns should be reported without delay to the rental company.” Operator training The customary practice is for the renting agency to make available an operator and, in certain instances, to work under the renter’s employees. “We expect the driver/operator to work under the supervision of our personnel,” says Nerkar. Ideally, operators should be appointed “after checking their previous experience in operating similar equipment and their training certification from authorised training institutions,” says Rambabu. “If you’re fully dependent on the rental company’s operating crew, make sure they are well trained, experienced and hold valid licences or certification,” cautions Bhagde. Problems arise when the operator’s skills fall short. “Our stringent norms for operator qualification sometimes create challenges in that not every supplier will have operators meeting those norms,” explains Nerkar. “The operator should have held a driving license for the specified equipment for the minimum stated number of years.” “A shortage of skilled manpower for strategic equipment is an ongoing challenge,” agrees Ray. To tide over this challenge, at L&T Construction, “operators are trained as needed, and we impart job specific skills. We place the utmost importance on safety during operations. Most of our training is directed towards operational safety.” At Tata Projects, “fleet experts induct and train operators on site,” shares Nerkar. “Also, we ensure that trained riggers/flagmen are present on site when the equipment is in operation.” Rambabu recommends getting select operators professionally trained by training institutions and OEMs: “For critical equipment like motor graders, concrete pavers and tunnel-boring machines, we prefer OEM trained operators.” “Conducting mock tests and verifying the competency of operators through previous certifications can help ensure that they have the necessary skills and knowledge to handle the equipment properly,” suggests Boopathi. “Training or refresher courses for operators can further enhance safety and proficiency.” He also suggests asking the rental agency for a record of operator’s certifications and training history, saying, “Agencies that adopt this proactive approach to mitigate risks come across as safety-conscious, professional players. This approach infuses confidence among renters.” High rentals “Most rental companies work with us on a long-term basis on various projects; hence, they are able to give us the best possible price,” says Ray. “Business continuity rather than short-term assignments enables them to offer best prices.” For the best rental rates, “we get quotes from various sources, bundle multiple rental requirements, rent equipment for a longer period, opt for advance rental payments and don’t depend on the vendor to transport the equipment to the site,” says Boopathi. “To avoid hidden fees and unexpected charges, we insist on getting the clear pricing structure upfront, including any potential additional fees.” Lower-priced rentals are always preferable but not at the cost of performance, cautions Bhagde. “Negotiate rents for the entire duration of a project to get better rates.” Hidden terms Rental agreements can be lengthy and complicated. Still, Bhagde emphasises the need to “carefully read and understand the rental agreement, including any additional fees or charges that may apply”. It is best if hiring terms and conditions are stated very clearly and precisely, and cover potential points of dispute like repairs during the rental period, he recommends. “Also, set a timeline for scheduled maintenance and emergency breakdowns. Usually, the responsibility of maintenance and repairs falls on the equipment rental company. Avoid hidden clauses and charges that may lead to future disputes. Following all the applicable safety guidelines and regulations (such as usage limits, loading, etc) while operating the rented equipment can help avoid disputes.” Essentially, ask for the rental terms and conditions tobe stated in detail upfront, reiterates Boopathi. Transporting equipment Transporting rented equipment to the construction site can be a logistical challenge, says Bhagde. “Coordinate with the equipment rental company to arrange for timely delivery and pickup of the equipment.” In today’s scenario of fast-paced construction work, renting equipment makes sense because it eliminates the difficulty of storing and securing machines, and helps make machines available quickly and easily, he concludes. “Renting equipment saves time and money. But the cost of ownership must always be compared to the cost of renting to ensure renting is the best option.”

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