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This Month in Rental Management
Cover story: Going Up — Coping with rising fuel costs
Cover story: Going Up — Coping with rising fuel costs
06/10/2012

Fuel prices might fluctuate from week to week or even day to day, but it is clear that the cost of energy once again has been on the rise this year. No doubt the cost impacts equipment rental businesses in many ways and many of you have been through this before, so we asked readers the question, “How are you coping with higher fuel prices?”

The answers from rental store owners and managers varied, but often had a common theme of finding ways to conserve fuel and energy as well as passing on some of the increased cost to customers.

Many have added specific fuel surcharges to rentals while others have raised rates to reflect the higher price for fuel. In the case of machines that run on gasoline or diesel, several rental stores send the equipment out with a full tank and ask renters to return it full. If not, the renter is charged for the fuel.

Here are some of the ways your peers say they are dealing with higher fuel costs.

Robert Pedersen, president, A Tool Shed, Santa Cruz, Calif., says his company adjusts fuel prices for its customers accordingly.

“We give the customer a choice to bring the equipment back full — all equipment goes out full — or they pay our fuel price upon return. We fill up the equipment prior to closing the contract,” Pedersen says, adding that the company has its own above-ground fuel tanks at the facility.

All fees are included in the rental rate, Pedersen says, so that there are no surprises for the customer. As prices of fuel have gone up, A Tool Shed has increased its delivery price and charges a portal-to-portal hourly rate.

Located in California, Pedersen says he has been forced to purchase a few new trucks and retrofit others, not for fuel efficiency, but for air quality control. He says he also is seeing propane-powered equipment becoming more popular in his area.

“We have adjusted our inventory to take advantage of the demand,” he says. The company also has explored the use of solar panels, but Pedersen says the benefits are not yet cost effective to put them in place.

“We have an extensive recycling program throughout our company and continue to work toward a paperless system of operations. We have converted all of our lighting systems to the low-voltage systems with the help of an outside contractor and rebates from the power company,” he says.

Paul Kenyon, managing director of Absolute Group of Cos., Toronto, and American Rental Association (ARA) Region 10 director, says his company recently completed a fuel efficiency audit.

“We tracked each vehicle’s fuel and repair consumption and associated costs over a specified period of time, taking into account the kilometers/miles the vehicle was required to travel. Putting all of this into an Excel spreadsheet allows you to determine average fuel consumption and costs, by fleet vehicle. We then compared this to the vehicle manufacturer’s ratings. Any anomalies then jump off the page at you,” he says.

To read the rest of Wayne Walley’s cover story from the June issue of Rental Management magazine, click here.

If you are in the equipment rental industry, you can get a free subscription to Rental Management by clicking here.

 

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