Linde Forklifts is in the midst of a major upgrade of its rental equipment fleet, as it stays ahead of growing market preference for the flexibility which the rental option can offer.

Linde’s Managing Director, Carl Smith, has observed the trend to rental in the Australian market for two decades and says the factors which are driving it will continue to dominate business decisions.

“Fifteen years ago the business climate was entirely different and the incentive to rent rather than purchase had little impact on the market,” he said. “Equipment renters were in a very small minority. Contrast that with today’s situation and the position is almost completely reversed.”

Mr Smith said that key factors for the change in attitude to equipment rental included greater emphasis on effective use of business capital, the increased need for business flexibility and a realisation of the benefits available from technological advances.

Linde already operates one of the largest forklift rental fleets in the country. It recently committed to a 30 per cent expansion of the fleet and even more significantly is on track to replace all of its rental equipment during the next 18 months.

“More and more businesses are making the decision to rent because they can see the advantages they can achieve,” Mr Smith said.

“The money saved can be used for crucial marketing activities, for facilities expansion or for the many other calls on funds which businesses face in this extremely competitive environment.

“From my discussions with customers I think financial certainty is perhaps the strongest reason why the rental market has become so strong in Australia – and overseas.

“When you are renting a forklift or a fleet of forklifts you have a monthly fixed cost which a budget can be framed around. There’s no concern about unplanned maintenance or downtime.”

Mr Smith said the growing number of third-party logistics contracts had also encouraged the uptake of rental equipment by companies which might previously have only considered outright purchase.

“If you have purchased forklifts to service a contract which ends for whatever reason, you can be left with idle forklifts and standing costs which cause financial pain,” he said.

“The rental environment is much more in tune with the needs of companies which operate in a volatile business environment when you need to be fast on your feet to survive.

“We know from speaking to Linde customers and just from observing they way in which they handle equipment rental options that they appreciate the flexibility to shrink or enlarge a rental fleet as their business circumstances change. They can also arrange the term of the rental period to suit their business targets.

Linde’s Managing Director also detects a change in attitude in other areas. “Once people may have thought that to rent was to forego some intangible benefits of ownership,” he said. “Today they see that there are positive advantages to rental, even aside from financial considerations.

“Certainly the preservation of capital and the ability to accurately forecast forklift related expenditure are attractive to many people, but there are other competitive pressures which make rental of Linde forklifts a good business decision.

“For some of our customers it is the simple realisation that renting forklifts will allow them to throw more equipment at their materials handling challenge than they could afford to do if they were purchasing that equipment.”

Some renters make their decision purely with an eye to the future.

“Linde has a well deserved global reputation as a technology leader in its field and invariably the advances which it introduces also result in productivity improvements. By renting their forklifts businesses have the opportunity to keep up with the latest technology – and keep up with or stay ahead of their competitors.”

Carl Smith knows enough about his customers’ businesses and their requirements to appreciate that a significant percentage will never opt for rental – even though nearly all at least explore that choice.

“The mere fact that some businesses are for the first time exploring the possibility of forklift rental is an indication of how the business environment has changed,” he said.
“At Linde we have put everything in place, with a major boost to our rental fleet’s size, with a switchover to the latest models and with industry-leading delivery and maintenance back-up to ensure that we can support their decision.”