Is it better to Off-hire or Keep Equipment on-hire over Christmas?
24 November 2020
It almost appears that lurking in the ever-growing autumnal shadows, Christmas has been waiting, poised to pounce on us like a last hurdle for businesses to overcome before we can steer our operations into a new year. Whilst this year has been one hell of a roller coaster ride. You may have decisions to be made in terms of off-hiring equipment or keeping it on-hire for the holiday season. To guide you through the options to the question of off-hiring equipment over the holiday period, we need to cover some points about why we hire equipment in the first place and terminology.
What is off hire or on hire?
The answer is: Off Hiring is the term we use if you have completed the task you needed the equipment for. It is a standard industry term. You have equipment on hire and when you have completed any task it is employed for, you simply off hire it.
The Financial Sense of Hiring in Equipment
Hiring in equipment is often a choice that is made by companies, due to not wanting or needing to have the capital expenditure (and upkeep costs) of developing their own fleet of equipment. Generally, the larger the item the more it costs to run, store, and maintain. If it is plant or large items of equipment such as welfare cabins, it makes more commercial sense to hire these in, as and when they are needed. Rather than purchasing items of equipment, requiring maintenance management and provide the busines with something that will just depreciate. The convenience of having that kit on site and ready to go, is far outweighed by any prolonged periods of it not being utilized.
Why are we contemplating the notion of keeping unutilised equipment on-hire?
Time for a huge but. Normally I would suggest that you should consider off-hiring all unutilised equipment. As I discussed earlier it makes perfect sense to limit the expense. But (there it is), 2020 has thrown us some dodgy balls and this is another one. At the time of writing this article, there is a massive national shortage on multiple lines of equipment. Spanning Welfare Units and other welfare solutions. Shortages that have been caused by the prevailing pandemic and that really can not be helped. As the industry has had to contemplate similar questions about manufacturing extra solutions and whether the demand peak will decline in the new year. That said the issue has caused suppliers all over the country to close ranks and service their existing customers as a matter of priority – (as these will be coming back in the new year and are not just responding to new demands). Suppliers are not taking on new business for some lines of hire equipment. Mores the point, equipment is being booked up well into 2021. This is also extending the seasonal trend of haulage being in demand for the start of the new year.
In short…you may be better to keep your equipment on hire
With lead times for some equipment running between 6 to 8 weeks if you factor that when you return from the holiday period in the new year. If you want to stand a chance in starting 2021 in the most productive manner, then you would be wise to consider keeping the equipment you have now.
Alternative to owning the kit
It is far better to hire in specialist equipment from a company such as PAL Hire, so you can have the latest, highly maintained equipment. You also benefit from our operational capability of having a multiple supplier base to fulfil your requirements. In short, if we have a supplier that can not for any reason provide a piece of equipment for you – we have another 10 who have the equipment to be delivered. That translates as a great solution for you as we have worked hard to develop the best levels of reliability possible.
Here’s the thing about being ready for 2021
Every year we discuss the fact that the last day for guaranteed off-hire prior to the Christmas break is a certain day. This means you can off hire it and know that the equipment will be collected prior to the Christmas break. This year that day is the 4th of December, but if you are considering preparing for January 2021 and you want to get your equipment on hire in good time then we suggest getting your quote and orders in before the 11th of December.
Hopefully this has helped you with the rationale of what to do in these trialling times. Whatever you choose to do with your hired in equipment, our team of experts are on hand to give you all the help and advice to see you into and beyond the new year.