Which is better, owning your forklift equipment or renting it? As an operations manager, I know that having options empowers me to make the right decisions as my operational challenges change. When it comes to renting or owning forklifts it boils down to “utilization”. In today’s fast paced world, needs can change instantly. So, we will always need the flexibility of accessing equipment quickly. I don’t want to discuss “short-term” rentals. Short-term rentals fill unexpected gaps but are expensive and non-strategic.
If you are one of those managers that purchases equipment and keeps it running for 20 years, this topic is not for you. However, if you don’t like being in the forklift business, read on.
I’ve been thinking about renting instead of purchasing equipment. I mean renting for the long-term (LT). Let’s define long-term as more than 24 months. In addition to preservation of capital, the principle reason for renting versus purchasing is if I’m not certain of my future utilization but I need equipment now.
The primary reason I would rent is that I don’t have a good grasp of my future utilization. Since I’m renting, I’ll be able to return the equipment whenever it is right for me. I also like that service is included. Unless you have a team of your own highly competent technicians, why would you want to manage the repairs? So, with these benefits why doesn’t everyone rent instead of own? Well, you know the answer, cost of operation. It will cost more on a per hour basis to run a rented forklift versus a purchased one as long as the usage is equal. However, anytime purchased equipment is not being used it incurs cost with no benefit.
I’ve got a couple of ideas as to how we can make the value proposition better for LT forklift rentals, but I first would like to hear from you. What would convince you to rent forklift equipment versus purchase? Post your comments below.