When and Why to Rent

Rentals

By Maureen M. Upchurch

The Xtreme XR7038 telehandler is the largest telehandler in North America. It has the ability to lift 70,000 pounds and has a 38-foot lift height, a 22-foot forward reach, and a 300-hp Tier IVi engine.

The XR1270 roller boom telehandler has a lift capacity of 12,000 pounds, a lift height of 70 feet, and a forward reach of 53 feet, 8 inches.

Mason contractors of every size in every location are eventually saddled with the prospect of equipment purchases. In some cases, equipment necessary for the completion of a job will break down, be rendered obsolete, or be utilized across town or across the region on another project. This challenges masons with a very real issue: How are my dollars best spent – by purchasing new equipment or by renting?

When Rental Makes Cents By Sean O’Halloran

Renting may be a sensible choice over purchasing when it comes to the world of heavy equipment for a number of reasons. But, do the same rules apply regarding concrete and masonry equipment, which – generally speaking – have a smaller price tag? The short answer is “yes,” in many cases. Certain organizations can greatly benefit in the long run from leasing or renting equipment, and there are other organizations that may not see as much of a positive impact to their bottom lines from these options. Contractors who have multiple jobs going on at the same time will typically own a fleet of equipment, including trowels, mixers, screeds and vibrators at their disposal. For these organizations, typically, some creative logistics allow them to move equipment within their fleet from one job to another without having to enter into a rental agreement with their equipment partners. Smaller or mid-size contractors who prefer to keep a lean fleet and avoid investing in storage and maintenance of the equipment can greatly benefit from a proactive rental program. They can actively monitor projects in the pipeline, and work with a rental provider to meet their individual project needs. Maintenance, service and support The real beauty of renting comes in the form of reduced maintenance and service costs for the contractor. Apart from some simple routine procedures to maintain the equipment while it’s on the jobsite, the rental store performs the majority of the maintenance efforts once it is back in their hands. This essentially means the contractor doesn’t have to worry about hiring a full-time technician to service equipment, and contractors don’t have to spend their hard-earned money on parts and labor to repair equipment. Furthermore, reputable rental stores generally stand behind their equipment. If it breaks down while it’s on the jobsite, the rental store technicians will either repair the equipment or replace it with a comparable unit to minimize downtime on the job. Storage Regardless of the organization, equipment simply isn’t in use around the clock. Warehousing and storage fees, especially in urban areas, can equate to a big investment for the contractor. By renting only the equipment needed for a pre-determined amount of time, contractors are able to cut down on their storage and warehousing fees substantially. Each piece of equipment has a storage footprint, and that footprint equates to additional costs. Ready to rent One of the key factors that determine whether a piece of equipment is suitable for rental is durability. Rental equipment takes a beating daily, and, for manufacturers, that means that using top-quality, heavy-duty components is crucial to deliver a rental-ready product. Each case is unique When weighing the options of purchasing versus renting, contractors have to consider a few factors. Determining how much a piece of equipment is expected to be used, and how long will it take to recoup the upfront capital investment of this piece of equipment, are each important. If a contractor believes that he will get a lot of use out of the equipment over an extended period, perhaps it makes more sense to purchase. Conversely, if a contractor estimates that the equipment may not be used regularly, rental is the obvious choice. The contractor can essentially keep the fleet lean and forgo substantial maintenance and storage costs associated with owning a robust equipment fleet. There’s no single correct answer, and each organization is ultimately tasked with deciding what is right for that business, based on the equipment’s potential frequency of use, the length of the project, and whether the personnel to properly maintain and store the equipment is in place. Sean O’Halloran is marketing manager at The Toro Company. To learn more about Toro’s masonry and concrete products available for rental, visit www.toro.com/rental.

The decision to make the more significant investment of buying, or the smaller, incremental investment of renting, relies on various factors. For most, this is a business-specific decision. Scott Phillips, director of marketing for The Marshalltown Co., a family-owned manufacturer of construction equipment in Marshalltown, Iowa, says that “a business has to evaluate the long-term per-hour cost of owning, and convenience, maintenance, acquisition, cost, resale value and storage.”

Terry Hagy, president of RentalMax, the largest independent rental company in Chicago, puts it a different way: “Contractors talk about a 65 percent utilization factor; if the item won’t be used 65 percent of the time, firms are probably better off renting.”

In all, the buy versus rent question is not answered the same way by everyone and can be argued both ways. What is the long-term cost of owning versus the convenience of renting? How close is the rental yard to the jobsite? Is the time spent picking up and returning smaller pieces of equipment worth the amount of time you are away from the jobsite, not working?

While the question of renting vs buying is an economic decision, masons must consider practical factors. What are the logistics of the various projects in which your firm is involved? Do you have two projects locally and three more out of state?

According to Chris Ellis, project manager of Koontz Masonry, the use of rental equipment allows him to address his jobsite needs beyond his Lexington, N.C., backyard. Koontz is currently working on Freeman Hall at Clemson University in Clemson, S.C., among other projects. While this job is significant for Koontz, it is more than three hours in travel time from the firm’s headquarters.

“We have to bear not only the location of the project in mind when we decide to rent or use our own equipment, but we have to factor in the duration of the project and the availability of our own equipment,” says Ellis of his family-owned and operated company. The Clemson University project began in October 2014 and was completed last month. Could Koontz and its workload support the use of their own equipment on one job in a distant location for eight months? When Ellis factored in the costs associated with hauling the equipment and maintaining it at a remote location, serious questions were presented. In this case, Ellis says, “It just makes sense to rent.”

Heavy equipment manufacturer Xtreme Manufacturing Inc. of Las Vegas, Nev., echoes the thoughts of Ellis. Don Ahern, CEO of Ahern Rentals, owner of Snorkel and operating manager/president of Xtreme, says the length of time the equipment will be required on a jobsite is a leading factor on the decision to rent versus buy.

The Xtreme telehandler XR5919 is designed for maneuvering in tight spaces, parking garages, and/or crowded jobsites. It is useful as a support machine for jobsites with a larger forklift or telehandler on site, and has a 5,900-pound capacity, a 19-foot lift height, an 11-foot forward reach, and a 61-hp Tier IV Final engine.

“Rental provides a good option for masons who require the equipment for a short period of time or for those who regularly change the mix of equipment on site,” says Ahern. “Masons who use the same type of equipment on long-term jobs or across multiple projects may benefit from purchasing equipment outright.”

Marshalltown’s Phillips encourages masons to self-assess when making decisions on equipment. Know your size, and know the direction in which you want your business to grow. “If you are a mid-tier firm that breaks a few bags of concrete per week, you probably don’t need to buy a concrete mixer,” he says. “If you get a large job, like a strip mall, then progressively another and another, you may want to consider buying.”

While manufacturers, like the 125-year-old Marshalltown, do not rent to masons directly, they do sell their products to the rental outlets. And, repeatedly, Phillips sees “our clients renting the same piece of equipment to the same mason, over and over. Eventually those masons will buy that equipment.”

This not only allows the mason contractor to test the product to determine if he likes it or needs it before he buys, it also allows the rental outlet to determine if the $10,000 mixer is a good investment.

Where to rent

So where would a mason contractor like Koontz rent the equipment needed to complete a project? In order to find a rental outlet, one can quickly search the internet to find convenient locations from local/regional purveyors, big box retail chains, national rental companies and more. But how do you choose the right facility for your business?

Shown is a Marshalltown mixer in use.

Many mason contractors select rental outlets based on criteria defined by their business needs and philosophies. Whether it be cost, quality of equipment, availability of equipment or maintenance of equipment, etc., soliciting several rental quotes at the outset proves valuable.

“Our rental choice is based primarily on price,” says Ellis. “We generally use the same rental company, because they give us the best price. But I am not loyal to them, I am loyal to the price.”

Hagy of RentalMax sees maintenance of equipment as another factor in how mason contractors select a rental outlet. “Masons choose their rental company by how they maintain their product. When the equipment breaks down, the rental outlet has to respond. If the equipment is not maintained, there is no product to rent.”

What to rent

Which equipment is rented most frequently by masons? There is vast availability in rental equipment – literally thousands of products – from troughs to telehandlers and everything in between.

Shown is the XR1270 roller boom telehandler in action.

While Koontz rents only scaffolding and forklifts, RentalMax sees a diverse cross-section of products contracted in its eight Chicago-area locations. Hagy notes the rental of skid steers and excavators for site preparation as well as a hammer attachment to maximize breaking power in demolition projects. Mason contractors in the northern states will rent ground heaters to allow them the ability to pour and cure concrete 12 months per year. Coring drills and concrete grinders are other top-renting items.

With manufacturers such as Marshalltown, a significant amount of products that they manufacture in their Iowa or Arkansas locations are sold to rental outlets. These products range in price from $50 to $10,000. Xtreme produces 16 models of rough terrain forklifts, or telehandlers, ranging in price by lift capacity and reach. All of these products, valued from $87,700 to more than $870,000, are rentable. About 50 percent of those manufactured are sold to rental outlets.

When considering renting versus buying, mason contractors must be sure to be true to their businesses’ current statuses and plans for the future. While rental fees can add line items to a budget, so can fees for storage, maintenance and hauling of equipment. Ask questions that are pertinent to the core of your business, from price to utilization to maintenance to logistics and more. Get several quotes to determine which outlet is the best fit for the wants and needs of your business. Thoughtful consideration of questions like these will save time, money and aggravation.

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Based in Georgia, Maureen M. Upchurch is a freelance writer with 15 years of experience in the construction industry.

Ask the Expert: Hydro-Mobile’s Kevin O’Shea

Masonry recently sat down with Hydro-Mobile’s director of safety and training, Kevin O’Shea, to learn more about how a globally renowned company approaches the area of equipment rental. Following is what he had to say. Masonry: Which of your products do you consider rentable? Kevin O’Shea: All of our products are rentable. We design mast climbing work platform products for many aspects of the construction/refurb/industrial markets, etc. The equipment, therefore, has a high degree of flexibility, lending itself to the rental market. Masonry: How do renting and leasing differ, and what are the pros and cons of each? O’Shea: Renting equipment has the advantage of being able to send it back to the owner when you no longer need it, and it’s easy to order additional equipment when you need it. However, rental equipment may not provide any profit from the equipment itself. The renter will certainly benefit from significant improvements in safety and productivity, leading to increased job profitability, but the renter may not see an equipment profit. The balance here is determined by utilization, flexibility and job costing. Purchase and lease options normally apply to those companies who have, or who can, foresee a high utilization requirement for mast climbers. Leasing equipment is a viable option for many, but one important consideration in leasing is the residual value of the equipment after the prime period of the lease. For example, you might finance 75 percent of the equipment value over five or seven years. At the end of this period, you will be left with an asset that has a market value. Is your residual asset value realistic to that market value? Masonry: Any advice on renting versus leasing versus buying? O’Shea: Before you buy, rent. Get to know the equipment, learn how to use it properly, hone in on a type and configuration that works for you. Once you build up a level of comfort on the system, and have refined the use to provide real productivity and safety benefits, then think about buying. Buying or leasing is a financial decision which is, on many occasions, about the needs and profile of the potential owner. Whether buying or leasing, it’s worth remembering that you now have enhanced responsibilities toward duty of care of the equipment. Working with the manufacturer to properly address those requirements is vital. Masonry: When renting a mast climbing work platform to a mason, how is the mason’s ability to safely operate it gauged or measured? O’Shea: When you use a mast climber, you must be trained. That training follows a syllabus that is determined by the manufacturer and the industry. It will include testing. Regulations determine that an individual must be “qualified” to use, operate, erect or dismantle a mast climber. It is imperative that all personnel receive appropriate training. Manufacturer certification is evidence of appropriate training. Masonry: What signs should a mason look for to ensure that rental equipment has been well maintained? O’Shea: Ask for the last annual and frequent inspection reports. Any signs and decals on the equipment should be legible. Equipment should have a good level of cleanliness, and everything should be functional. Guard rails, platform and mast section bracing should all be undamaged. Before using the equipment, make sure a qualified person conducts a pre-use inspection.

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Why I Attend the MCAA Legislative Conference

Each year, we bring you up-close coverage of the MCAA’s Legislative Conference in Washington, D.C., where association members and masonry industry leaders fly in for a few days of difference making. And, each year, we encourage everyone in the masonry industry to attend this important and beneficial event. So, to give you even more perspective, Masonry spoke to a few attendees to find out exactly why they do attend the MCAA Legislative Conference.

Tyler (left) and Riley McCauley enjoy a tour of the U.S. Library of Congress.

Beverley A. McCauley
President,
Hunt Country Masonry
Leesburg, Va.

“I believe that it is our responsibility and civic duty to promote our industry, if we expect to survive and thrive. Furthermore, it is our duty and right to instruct Congress how best to pass, enact, and modify laws, so as to help masonry as an industry sustain, grow and expand. Since very few of our elected officials understand the inner workings of masonry, it is imperative that we verbalize how they can help our industry to succeed. We cannot sit at home or in our offices and complain that they aren’t helping our industry if we don’t verbalize how we feel.
It was such a pleasure to speak to each of the Virginia delegation and let them know how we, as an industry, feel. This time, I took the initiative to take our two oldest sons, Riley, 11, and Tyler, 10, with me to let them see how easy it is to speak to those who have the ability to enact laws that affect us all. I have been personally participating since 2009. The benefit is that now the staffers and long-time House and Senate members recognize me when I come in.
They ask me questions about how I feel, what I think, and ask how can they help. Our boys were able to go back to school and relay how easy it is to have a conversation with our elected officials. If an 11- and 10-year-old can do it, anyone can. I have been able to forge relationships with multiple elected officials and feel blessed to have made those connections through the MCAA.
On attending again: I will attend again. It is highly effective and rewarding to know that you are part of a bigger picture, working together to change laws in order to better our industry. It also is imperative to reach out to everyone you meet with a personal note after as a follow-up, so that the connection is forged and the bond created.”

Bryan Foster
Project Manager,
WASCO Inc.
Knoxville, Tenn.

“I believe that attending the legislative conference is a vital experience and key to our industry. As a contractor, and having dealt with tough times, it has a rewarding feeling to voice your opinions and let people who aren’t in the construction industry know the challenges we face. After doing this for my third year, it was great to actually see some familiar faces and really start making connections. The behind-the-scene tours that we get and learning about the history of the buildings in D.C. is a unique experience. I look forward to attending next year and seeing some of the outcomes from this year’s conference.”

Gary Joyner
President, Joyner Masonry Works Inc.
Greenville, N.C.

“I would like to think meeting with the lawmakers makes a difference in our industry. If I didn’t attend, I guarantee you it would not make a difference. I like experiencing how things work on The Hill. Our North Carolina contingency – Bob Gates with Gates Construction Co.; Imani Brodie with Brodie Contractors; and I – saw 10 Congress Representatives and one Senator in a day and a half. This was my fourth trip and probably the best, hands down. The lawmakers were quite receptive and willing to listen to our issues, as well as telling us their stances also. I also like the fact that North Carolina was well represented, being that we are the largest masonry contractor association in the nation. I will attend again.”

Joe Bonifate
Vice President, Arch Masonry Inc.
Pittsburgh, Pa.

“I believe that it is very important to make sure our voices are heard. In particular, I think that a Check-Off program for the block industry is a critical part of our future. So far, I have learned that three congressmen in my state have co-sponsored the check-off bill (H.R. 985) as a result of my visit. At first, the experience was intimidating, but that quickly faded as I realized that many of the people in D.C. are normal folks who appreciate me making time for a visit. Seeing and participating in the process is an unforgettable and rewarding experience. It means a lot to me to know that I can make a difference. I will attend again, and I would recommend anyone to attend at least once.”

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2015 MCAA Legislative Conference Recap

Legislative Conference

By Stephen A. Borg

Shown is the South of 40 group on the steps of the U.S. Capitol building.

What a great week in Washington, D.C., for the Mason Contractors Association of America’s (MCAA) annual Masonry Industry Legislative Conference. We made the most of our time, both on and off Capitol Hill, and had yet another successful effort. We had representatives from states throughout the country who took the time to meet with Representatives and Senators from their home states, and I wanted to take this time to give you a brief recap of our efforts.

The MCAA had four main issues that we discussed this year during every visit. We tried to hit home the numerous ways that federal laws and regulations impact the mason contracting industry. Our top legislative effort was once again to ask Representatives and Senators to cosponsor the Concrete Masonry Products, Research, Education, and Promotion Act (introduced by Rep. Brett Guthrie (R-KY) and Rep. Kathy Castor (D-FL)), which as you know would provide the legal authority for the concrete block industry to hold a referendum vote on setting up a “check-off” program for the industry.

Our efforts on this front had an immediate impact as Members of Congress from both sides of the aisle officially signed onto the legislation before the MCAA even left town. Follow-up efforts continue for our members, and we are confident that we will continue to add even more cosponsors in the weeks ahead.

Congressman Tom Price (R-GA) joins the South of 40 tour.	Shown is a bronze statue of President Ronald Reagan; the pedestal includes a band of concrete pieces from the Berlin Wall.
Attendees of the South of 40 Conference are shown with Congressman Reid Ribble (R-WI).	Shown is a phenomenal view of the National Statuary Hall.
Tom Hoban gave the South of 40 members a tour of the Library of Congress.

While this was, by far, our top legislative issue, it was by no stretch our only legislative task. Broad-based immigration reform continues to be a lingering issue on Capitol Hill with the potential to, once again, rise to the surface during the Presidential campaigns. We thought it to be prudent to remind Members of Congress that the MCAA is fully supportive of a guest worker program for the construction industry and strong liability protections for employers, should the federal government expand or mandate the use of an “E-Verify” system during the hiring process. Members of Congress were very supportive of these requests, and many vowed to keep this and the misclassification of employees as independent contractors on their radar screens as the legislative process rolls forward.

Continuing efforts we have made for more than two years, our other top priority was our unending commitment to showing Members of Congress and the federal government the true impact that the Occupational Safety and Health Administration’s (OSHA) proposed new rule on workplace exposure to crystalline silica would have on the mason contracting industry and the construction industry as a whole.

Senator Mark Kirk (R-IL) meets with MCAA’s Jeff Buczkiewicz and Tim O’Toole.	Shown left to right are Tim O’Toole, Representative Randy Hultgren (R-IL), Jim O’Connor, and Jeff Buczkiewicz.
Attendees of the South of 40 Conference are shown on the steps of the Library of Congress.	Shown is the main reading room at the Library of Congress.

We reminded everyone with whom we met that workplace safety and health remain our top priorities, and we are fully committed to meeting the current standards as set by OSHA. However, we do believe that OSHA has not made a case for the need of the new rules; has not accurately taken into account the actual feasibility of complying with the new standards; and has drastically underestimated the true cost to the construction industry in implementing this rule.

Mark Kemp (left) presents the MCAA Freedom and Prosperity Award to Representative Tim Walberg (R-MI).

Mark Kemp (left center) presents the MCAA Freedom and Prosperity Award to Representative Kyrsten Sinema (D-AZ) with (from left to right) Colleen Sutter, Mike Sutter, Jeff Buczkiewicz, and Lisa Prichard.

Mark Kemp left presents the MCAA Freedom and Prosperity Award to Senator Joe Manchin (D-WV) with Jeff Buczkiewicz and Matt Keelen.

The feedback we received from Members of Congress on this topic was encouraging, and we look forward to continuing to work with Members of Congress on both sides of the aisle to ensure that OSHA takes another look at this rule before rashly implementing it.

While we were on Capitol Hill, President Mark Kemp, Executive Director Jeff Buczkiewicz, and various members of the MCAA took the time to present our annual “MCAA Freedom and Prosperity Award” to four Members of Congress who have been adamant supporters of small businesses and our industry as a whole.

This year’s award recipients were:

• Representative Tim Walberg (R-MI)
• Representative Kyrsten Sinema (D-AZ)
• Senator Mark Kirk (R-IL)
• Senator Joe Manchin (D-WV)

While we had a hard and long couple of days hitting Capitol Hill, we also had opportunities to participate in some rather fun events. During the beginning of the week, members of our South of 40 Committee and MCAA leadership were able to take two amazing tours of Washington, D.C., landmarks.

First on the schedule was a behind-the-scenes masonry tour of the Library of Congress. When not being slyly shamed for looking at our phones by our gregarious tour guide, we were learning quite a few fun, historical facts about the library and its contents. The second tour has become almost legendary within the MCAA as, once again, Representative Reid Ribble (R-WI) was kind enough to take our group on a once-in-a-lifetime tour of the U.S. Capitol building. These two tours not only were extremely informative, but also they served as a great way for our group to get our feet wet on Capitol Hill and learn our way through the Halls of Congress.

Dustin Bass with FMI presented a seminar on Financial Management for Construction Managers.	Shown is a gorgeous inside view of the Library of Congress.
Congressman Reid Ribble (R-WI) gave the South of 40 members a tour of the U.S. Capitol building.	The South of 40 group was allowed onto the private balcony of the Speaker of the House at the U.S. Capitol building.

We appreciate all of the MCAA members who took the time out of their busy schedules to join us in Washington, D.C., to advocate for our industry. We cannot overstate the importance of this week and the impact it has on our industry.

Keep an eye out for information regarding our 2016 Masonry Industry Legislative Conference. We hope to see you there!

South of 40 members toured the U.S. Capitol building, which included a view of the rotunda.	The South of 40 group enjoyed a mixer at Capitol Lounge.
Shown is the Giant Bible of Mainz, a large manuscript Bible produced from 1452 to 1453.	Attendees of the South of 40 Conference are shown with Congressman Reid Ribble (R-WI).

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