Redefining rental for materials handling equipment

The digital revolution is influencing every aspect of business – and the implications for the logistics and materials handling market are profound. Meeting heightened levels of customer demand requires new thinking to deliver services that are faster, more flexible and available 24x7 – which includes the acquisition and use of essential equipment.

Faced with today’s raft of political and economic uncertainty, combined with rising consumer expectations, organisations are under increasing pressure to assess and adapt their operations to remain profitable. Supply chains are becoming ever more integrated, requiring materials handling and logistics providers to be increasingly embedded within organisations’ operations to support more complex demands. 

There is no doubt that organisations are beginning to rethink the way rental can be used both tactically and strategically as a result – providing both short-term cover to manage volatility and supplementing fleets for a longer term. But, at this critical time when companies must assess opportunities to release working capital, scale up and down without risk, and explore technology innovation without long term commitment, is the materials handling market able to respond? 

Rental on demand

According to research undertaken by Sapio Research on behalf of Jungheinrich UK Ltd, almost two thirds (61%) of those responsible for forklift trucks in organisations using them on a short term rental basis agree that the nine-to-five approach to equipment hire is now out of sync with today’s 24x7 demand – and a quarter of respondents feel that the truck rental market is outdated compared to other rental markets. Organisations are asking for faster access to equipment, with more innovation in the rental model to support different requirements – from complementing existing truck acquisition models to responding to peaks in demand. 

With rental now seen as a compelling solution to address a diverse range of business challenges, the research reveals not only a strong interest in the idea of a Daily Rental option but also evidence that rental is being considered as an alternative to traditional three to five year contracts. One of the most significant findings of the research is a strong interest (76%) in a rental model predicated on truck usage – based on telematics data – rather than a fixed term agreement. 

Smart equipment

Technology innovation is key to meeting this new expectation for faster delivery, on demand usage and 24x7 operations. Using telematics in combination with GPS, for example, is providing the visibility of national truck assets required to enable the essential shift towards a next day model with no premium delivery charge, while telematics also open up new rental systems with the option to charge by the hour. With the adoption of the IoT increasingly enabling every aspect of the supply chain to be recorded, analysed and adjusted in real-time, there is growing expectation that equipment vendors can deliver vital data to support compliance, truck utilisation, and warehouse and logistics systems. Telematics will play a significant role here, providing data on vehicle usage, overspend, vehicle status and warning alerts. 

This is a significant shift in the way rented equipment is considered and utilised. As the research highlights, the logistics industry still suffers from a reputation of being slow to innovate, and the onus is on manufacturers to take the lead and turn these perceptions on their head. A combination of innovation within a proven, high quality and consistent on demand equipment hire service will be increasingly important to support organisations as they respond to the challenges of today’s marketplace and beyond.