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CROSSHIRE:

HOLD OUT FOR THE RIGHT RATE

I was not the only one to have a go at the SED organisers for the traffic fiasco last year, so I will congratulate them for a vast improvement this time round. Paradoxically I, and many others like me, set off early and then found myself kicking my heels waiting at the entrance until 9am. Perhaps SED should follow The Executive Hire Show’s example and open at 8am, as ours is a traditional ‘early bird’ industry. With the volume of business being done, I am sure exhibitors would have welcomed an earlier start at least on the first two days.

It was good to hear from many exhibitors that they were taking real orders and genuine enquiries. However, both at the Show and while networking in the evenings, there was one subject that many suppliers were keen to discuss, and variations of the same question were asked of many hiremen. Suppliers were exasperated by the attitude of some hirers whom they consider are letting the whole supply chain down. They argued that, with equipment light years better in quality than 20 years ago, with SED confirming that demand is ahead of supply for many manufacturers, and with legislation driving customers to seek increasingly higher standards, why are the net hire rates levied by our side of the industry so pathetic?

In many cases low rates are accompanied by poor service because (surprise, surprise) there is no money to pay for decent staff. Before anyone points a finger, I can say that I have seen as many invoices for low rates from independents as the larger groups. A big chunk of our industry is putting out machines at rates that defy belief. I have recently seen proof of 13m telehandlers at £150/week, Genie Z45 booms at £120/week, and weekly hire of one-bag mixers for a fiver. None of them have been old machines, nor have the jobs been of unusually long duration. As one prominent supplier put it, “You guys are nuts. You have access to the best technology, increasing warranty periods and many of you demand special finance deals or marketing kickbacks, all of which are available across the industry within reason, but you are unwilling to ask a realistic hire rate.”

This is not unreasonable, and I detect just a hint of some major suppliers starting to get frustrated by our industry. The alarm bells should start to ring when I reveal that at this SED, I saw an increasing number of knowledgeable staff from builders and contractors looking at kit. They were not just keeping abreast of developments, they were looking to purchase! The old adage suggests everything that goes around comes around, and although it is unlikely that the great in-house plant empires that once held sway in some places will ever return, there is strong evidence that a significant number of users are looking to own at least some plant once more. They are looking to suppliers to provide technical backup from qualified staff, as they are fed up with the service from many hirers.

Whether you hire small tools or large plant, can you really say that you are anywhere near satisfied with your rates? If you got only 10% more, would you employ or train more staff? The hire boom may not be over yet, but too many of us are still living in the days when spark plugs were five bob each and customers were grateful if we put them on a waiting list. If you offer good kit and good service, now is the time to say enough is enough and hold out for the right rate. Failing that, our only salvation might be when, not if, those nice people in Brussels decide that there must be a definitive life to certain classes of industrial equipment before it is scrapped. Now that would sort out the depreciation gerrymanderers from the rest of us.

Executive Hire NewsArchivesJune 2007Crosshire › Hold Out For The Right Rate

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