Hire and Rental News - February 2016

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FEATURE TR NSPORT, TRUCKS & TRAILERS
Despite being a ‘must-have,’ in most
modern equipment rental fleets,
diesel generators remain a largely
misunderstood beast. There are a
plethora of manufacturers, peddling a
variety of makes and models of diesel
generators with names like ‘Rentpak,’ or
‘Workhorse,’ or some other euphemism
for indestructibility. The primary selling
feature for enticing rental fleet owners
being robustness, ‘mine spec,’ or
reliability. When it comes to true whole of
life asset management, how does a rental
fleet owner decide which diesel generator
will deliver best bang for buck?
As with most rental assets, maximum
return on investment for your generator
fleet is determined by:
1. What you buy.
2. How you rent what you have bought.
3. How you dispose of the asset at the
end of its life.
SMART BUYING:
Obviously, if you get one right, it can
have a major impact on the outcomes
for two and three. When it comes to
what diesel generator to buy for your
rental fleet, it helps to have knowledge
of the global generator market. There are
three applications when selling diesel
generators:
1. Standby: Mains power exists and the
generator is only a back-up.
2. Prime Stationary: The generator
provides power but stays in one place.
3. Prime Transportable: The generator
is providing the power and will be
moved from place to place.
Obviously, most rental fleet owners fall
into the prime transportable category.
It is important to note up to 70% of all
generators are sold into the standby
category. Standby generators are
generally built to meet a price point
since they will not operate many
hours. Logically, many, if not most
manufacturers design their generator
products to cater to the standby market.
Often, they will offer modifications to
their products such as heavier skid bases
and market them under a different sub-
brand designed to appeal to fleet owners
TECHTALK
The real Power of Power - Extracting the most from your Diesel
Generator Fleet – By Gary Radford, Sumo Boards
in rental, mining and construction.
There are in fact, only a small number
of manufacturers who operate solely in
the prime transportable niche. Taking
into account whether or not the diesel
generator you are considering was built
specifically for the rigours of rental can
double the useable life of your machines.
It is important to compare fuel efficiency
of the engine relative to alternatives.
When a generator is running, up to 90% of
an end user’s costs will be fuel.
SMART RENTING:
So you’re comfortable you have
acquired a prime transportable specific
generator fleet with market leading fuel
efficiency. To extract maximum return
on investment during its useful life, your
sales team needs to be armed with the
right information to ensure the end user
understands these benefits. Without a
pitch to the end user that quantifies and
charges accordingly for the benefits they
will receive by using your generator,
you will have paid a premium for an
advantage you cannot recover in terms of
price or customer loyalty.
The key here is training for your sales
team. If you have bought your generator
fleet from a manufacturer that specialises
in the prime transportable space, that
training should be easily available
and usually free. There are two key
components in developing a pitch to the
end user that will enable you to charge
for the benefits you have acquired in the
purchasing phase.
Firstly, sizing. Generators, especially
rental generators are notorious for being
oversized. Developing sizing procedures
with the help of your generator supplier
is crucial in ensuring your customers get
the right machine for the job and don’t
burn fuel they don’t need.
Also, oversizing generators can quickly
lead to a maintenance issue known as
glazing. Generators consistently operated
at less than 50% of their prime rating
generate insufficient heat to burn off the
excess carbon that accumulates in the
bore. The subsequent ‘light loading,’ or
‘glazing,’ of the engine can often result in
a complete engine rebuild.
The second part of selling the benefits
of your efficient generator fleet to
your end user is quantifying your fuel
advantage. Once again, your supplier or
manufacturer should be able to assist you
in providing fuel comparison data that
can be delivered as part of your pitch to
the end user. Remember, up to 90% of
your customers cost will be fuel. Even
one litre saving per hour on a small diesel
generator equites to 730 litres per month.
With the right engine selection during the
buying process, you can find yourself in
a position where your competitor would
have to discount their rates by up to 80%
or more just to be the same overall price
as your offer.
SMART DISPOSAL:
Most of your advantages in this area
will have been derived in the buying
process. Prime transportable specific
diesel generators can last twice as long
and return more than twice as much
at the end of their ownership cycle.
Manufacturers that operate specifically in
the prime transportable space are aware
of this and can often offer guaranteed
buy backs at the time of purchase leaving
you with the advantage of knowing your
total cost of life ownership up front and
reducing your disposal risk to zero. There
are refurbishment businesses in Australia
and in other South-East Asian countries
such as Singapore that specialise in
acquiring ex-rental, prime transportable
specific generators with a view to the
lucrative second tier resale market.
Diesel generators are already usually one
of the higher returning assets in a general
rental fleet. Taking the time to consider
the true cost of life of the asset as well
as the strategic opportunities that exist
in renting those advantages to the end
user can improve your ROI exponentially.
There are independent experts that can
offer unbiased and independent advice on
selecting the correct product/s for your
fleet. With many major end users going
through cost reduction and efficiency
improvement programs, a strategic
investment in the right diesel generator
can give you an edge.
Contact Sumo Boards: 07 3077 6800 or
visit:
HIRE AND RENTAL NEWS • FEBRUARY 2016 46