3 Ways to Reduce Down Renting and Increase Asset Utilization with Fleet Management Software
In the crane rental industry there are times when down renting is unavoidable, but over time it can cost your company a considerable amount of money. In this post, we cover three ways you can reduce down renting with fleet management software to increase asset utilization.
What is Down Renting?
Down renting is when you need to select a unit, such as a crane, that has a higher lifting capacity than what is required for the job. For example, a job might require a crane with a 50-ton capacity, but you might only have a 75-ton crane available. In order to ensure you still get the job, you put the 75-ton crane on the 50-ton job. While this is a common practice, it can be problematic because the customer will only be responsible for paying the 50-ton rate. Even though you still land the job, you end up eating into your own profit by renting out a larger crane than necessary. This situation may be unavoidable at times, but most companies don’t track how often they have to down rent their equipment and therefore do not know how much it cuts in to their profits.
Below are three ways your operation can reduce down renting to increase profits:
1. Maximize Unit Utilization with Detailed Down Rent Reports
- Determine what type of units are being consistently down rented
- What unit type (crane’s capacity) were they being rented to?
- Identify the gaps in your fleet
- Redirect your sales team – use data from down rent summary and utilization reports as a management tool to get more from your sales department.
- Establish the needs of your fleet and your customers. Decide to rid yourself of a more expensive unit that does not get rented out at its proper unit type and purchase one in a more frequently used capacity.
2. Review Data from Fleet Management Software to Make More Informed Business Decisions
- Schedule regular meetings with your sales team where you can make use of the reporting capabilities provided by a comprehensive system.
- See up to-the-minute resource availability with your fleet management software’s availability report to avoid possible down rent situations.
- Provide your sales team with feedback from internal reports like the down rent and equipment utilization reports, so they can be better informed on how their decisions can affect the company’s operation both positively and negatively.
- Determine job profitability – review job profit and loss summary reports to ascertain if you are making money on those jobs where you down rent your equipment.
3. Examine Your Preventative Maintenance Program
Monitor preventative maintenance activities more closely with the goal to reduce down renting of equipment that is a result of breakdowns or missed service. Comprehensive fleet management apps can track and report data regarding coming due activities so you can stay out in front of predictable maintenance down times and hopefully mitigate unforeseen break downs due to vigilant maintenance protocols. Keep your units ready to be rented to maximize your asset utilization.
When sales teams are effective and efficient, it brings success across your entire organization. A couple of years ago, you would be able to just look out at your yard and if it was empty, then you knew you were busy and things were good. In today’s competitive environment, you need to know that if a piece of equipment is leaving the yard, you are maximizing your profit. If you are consistently down renting equipment, then you are not reaching your company’s profit potential.
I have never been into renting equipment, but after reading this article I think it might be best! I want to maximize my unit utilization, so that is wise to make sure I have a detailed report.