Table of Contents
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01EQUIPMENT RENTAL INDUSTRY
- State of Industry
- U.S Economy
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02RENTAL EQUIPMENT ANALYSIS
- Age of Equipment
- Rental Rates
- Utilization Rates
- Rental Revenues Results
- Sales to the Rental Industry
- Rental Field Population
- Forecast
- Market Penetration
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03CONSTRUCTION EQUIPMENT RENTAL COMPANY / OEM OVERVIEW
- United Rentals
- Sunbelt Rentals
- Hertz Equipment Rental Corporation
- Ahern
- Maxim Crane Works
- H&E Equipment
- Sunstate Equipment
- CAT Rental Stores
- Komatsu
- Deere
- Hitachi Construction Machinery
- Neff Rentals
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04OEM Participation
- Volvo Rents Stores
- CAT Rental Stores
- Komatsu America
- John Deere
- Other Major OEMs
Executive Summary
The Rental Equipment industry has enjoyed rapid growth over the last decade. We attribute much of this growth to the change in customer attitudes about machine ownership and the costs and downsides of owning vs buying machines. During this period there has been much consolidation within the industry as exemplified in United Rentals acquiring several of its largest competitors to become the world’s largest rental equipment business. Sunbelt Rentals is its closest competitor with 2019 rental revenues equaling approximately xx percent of United Rentals’ 2019 rental revenues. There are thousands of rental equipment businesses in North America, most of them are small with one or two locations; however, this report primarily focuses on the industry as a whole and the 10 largest companies.
The rental equipment business model shifted in the last several years to include third-party suppliers who in effect act as agents between machine owners, individuals or rental companies, and end users. This segment has grown each year as there is little barrier to entry. One only needs a computer and an internet connection; no need to invest major capital to purchase, track and maintain machines. We expect to see this segment grow as machine owners look to capitalize on technology to improve time utilization and end users try to get the most competitive option.
This report tells a tale of two worlds: pre- and post-COVID-19 pandemic. For the first 10 weeks or so of 2020, rental equipment businesses were operating as expected, hitting close to or just under operating benchmarks they outlined at the end of 2019. Most of the larger operations expected some growth in 2020, not at the rate they enjoyed in 2019, and potential further slowdown in 2021. Then COVID-19 was introduced to the world and the actions world leaders took to “flatten the curve” and contain it amounted to shutting off the global economy. President Trump, following advice of his advisors, mandated “social distancing” and the shutdown of all “non-essential” businesses. The mandates applied to public and private sectors alike.
These actions resulted in, at one point, more than 30 million Americans unemployed, businesses aside from hospitals, grocery stores and pharmacies and certain home improvement stores closed and millions of Americans confined to their homes with no respite from city parks and playgrounds as they, along with all schools, were closed too. In short, the administration turned off the economy short-term in an effort to curb the COVID-19 disaster the CDC and WHO projected. These actions resulted in a major drop in consumer spending, which represents approximately 70 percent of US GDP.
Equipment rentals were considered an essential industry and most rental operations remained open during the period. Individual businesses quickly took steps to protect their employees and customers through new cleaning protocols. We’ve seen first quarter 2020 results from United Rentals, Herc and H&E thus far and all of them report a noticeable detrimental impact largely stemming from COVID-19 restrictions beginning in mid-March. Many projects and jobs were put on hold or postponed either due to funding questions or local ordinances preventing job sites from remaining