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CROSSHIRE: WORKING THE SYSTEM The thorny issue of hire rates, or rather how to achieve realistic ones, has been argued over by our industry since the days when supply started to exceed demand in the mid 1960s. Until then, the post-war reconstruction of our cities and roads ensured that anyone with a half-decent plant fleet could earn a good living. The tool hire explosion of the early seventies witnessed some surreal situations. I was then considering adding tool hire to a traditional heavy plant fleet, and remember ringing up one of the early pioneers in our area to ask if I could hire that old stalwart, a Kango hammer. I was informed that I could be placed on a waiting list, with the anticipated time of availability three weeks hence! Sensing an opportunity, I tried to order some Kangos but was told that there was at least a six-month waiting list! Kango, of course, had that peculiar British disease that says if you have something people want, keep putting the price up and being rude to them - but whatever you do, don’t increase supply. British Rail did it for years but they had the luxury of state monopoly. Needless to say, when German and Japanese upstarts came along they knocked the stuffing out of Kango with better products. The growth of plant, tool and now access hire has been well documented but the returns we are achieving today are abysmal and much less in real terms than 20 or even ten years ago. The large hire groups have glossy catalogues with high list prices that are savagely discounted to all but the casual or unwary buyer. But it is worrying that regular users of our industry are becoming adept at ‘working the system’. The most common example is the tendency to place machines on and off hire at a whim. As most suppliers long gave up charging for transport, the customer has nothing to lose. He knows the kit will not be collected immediately and so keeps using it FOC until a vehicle does turn up. Then he claims that “we just started using it again today, Guv.” Any attempt to charge for the missing days’ hire or transport will be met by threats to transfer business elsewhere. Another scam is the brinkmanship of off-hiring a machine on a Thursday night, believing the hire company has already allocated its transport for Friday. The customer thinks he has a better than even chance of free use of the machine until some time on the following Monday. The really clever sods send off-hire faxes or e-mails at closing time, knowing they may not be read until the next morning, but they comply with the letter of the hire contract. Crosshire considers that, with many classes of equipment, we have the means to end these scams, in the shape of hour meters. I suggest that readings are taken at the beginning and end of each hire - if you can’t collect your kit straight away, send a pensioner round in a van or on a pushbike to note the reading. In New Zealand, most hire companies routinely do this as a means of charging so that, for example, a weekend hire may allow the client to be in possession of a machine from 4pm Friday to 10am Monday – but, as the basic weekend charge allows only eight hours’ use, any extra are charged for. Once the principle is established, the hour meter can become a powerful aid to our industry, ensuring that we can charge fairly for a whole range of machines and catch out the wide boys who have obtained an unfair advantage. It may be difficult to get our rates up but if we allow ourselves to be an easy touch, then clients will continue to exploit our working methods to obtain use of our kit for free. Executive Hire News › Archives › July 2006 › Crosshire › Working the system
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