The demand for cranes is ever-growing with their unique property of lifting and transporting extremely heavy materials that are beyond the capability of manual labor. This demand has been catalyzed by rising industrialization and urbanization, leading to the construction of residential and non-residential infrastructures across the globe.
However, with the pandemic slowing down global operations and the current geopolitical state causing inflation, the crane rental industry must be aware of where the future lies and prepare themselves with a successful plan.
With over 19 years of experience in the manufacturing and rental industries, we at STAEDEAN have seen various businesses go through different trends and empowered them to stay ahead of the curve with software embedded in Microsoft Dynamics 365 ERP.
This article will share the trends in the crane rental market, the current challenges it faces, and how to solve them with our solution — STAEDEAN Rental Management, a rental software embedded in Dynamics 365.
There are three major growth drivers seen in the crane rental market:
Although the pandemic had initially slowed down operations globally, the crane rental segment is witnessing growth due to infrastructure development projects and the development of smarter cities across the world. They’re also in demand from other industries such as cement, petrochemicals, refineries, power plants, transportation, and so on, which require medium or high-capacity cranes.
Different construction and development contractors are prioritizing renting over purchasing cranes due to the high costs involved with owning and maintaining a crane. Additionally, the price-sensitive mid- and small contractors are considering renting cranes as a more viable option.
The trend of renting over buying has even reached crane manufacturers and OEMs — that are now looking to increase their revenue streams by offering their cranes for rent using the product-as-a-service model and taking care of additional customer needs like after-sales services, refurbishments, and maintenance.
The global cranes rental market size is estimated to reach 58.1 billion US dollars by 2027, with a predicted CAGR of 6.7% from 2022 to 2027, according to a report by the Market Data Forecast.
The North America Crane Rental Market is projected to grow with a CAGR of more than 4% between 2022 to 2027 due to telecommunications development in the United States and the stabilizing construction and mining sector in Canada, as stated in a Research and Markets study.
The crane rental market in Europe is expected to expand at 5% CAGR from 2020 to 2026, according to a study by Graphical research, owing to the wide availability of technologically advanced cranes at affordable prices, with a special demand for tower cranes.
The Asia Pacific crane market is expected to exhibit a CAGR of 6.18% from 2022 to 2027, according to a report by IMARC (International Market Analysis Research and Consulting Group).
All these growth factors combined with favorable government funding for infrastructure development will offer lucrative opportunities for the crane rental market.
The ability to make profits is largely determined by the financial liability of the crane renting company which is influenced by subdued hiring rates and a bigger customer bargain power.
Crane renting companies have to look at ways to ensure the actual utilization of the crane reflects in the final invoice. Simultaneously they are in search of ways to bring down recurring maintenance and operating costs.
When cranes are involved with complex projects, they must be billed according to the total utilization. For instance, the billing structure of a crane rented on the regular working shift could be different than the billing done for a night shift, weekend shift, ad-hoc demands, and so on.
Solution: Focus on maintaining a steady cash flow without missing any payments or invoices from your customers. STAEDEAN Rental Management offers consolidated invoicing and has automated payment systems with reminders to invoice and receive payments on time. Complex contracts can be easily handled with the contract management functionality.
Multiple cost calculations can be done with multiple revenue recognition for the same project, and any excess hours of crane utilization are easily invoiced using the hour-based invoicing in STAEDEAN Rental Management. Here, the hour journal consists of the hours of manned equipment and operator hours.
This avoids any overutilization of the cranes and ensures correct pricing is done for the registered hours. The final invoice generated will reflect the actual work done, preventing any revenue loss.
Crane rental companies require skilled workers to operate, repair, or manage jobs. Usually, the planning and scheduling of the assets occur alongside assigning a crane operator. However, this scheduling can be challenging if you have different types of cranes and know which operator must be assigned to the crane.
Additionally, when receiving a rental request, crane rental companies must know the specifics required by the customer, such as the size of the crane, how much lift weight is required, and so on.
Solution: Planning and scheduling of assets with the crane operator can be managed in STAEDEAN Rental Management’s plan board that gives a visual representation of the rental requirements, the tasks, and the list of personnel. The plan board is flexible, and you can use it to exchange the actual crane, assign more cranes, or allocate additional people to the job, depending on the requirement of the project site.
It also gives an overview of different depots having similar cranes available, thereby helping with contract negotiations. The plan board can also be linked to the STAEDEAN Rental Mobile Operations, which you can use to schedule staffing — and the respective technicians, drivers, or crane operators will receive direct updates on their mobile devices to register their hours.
Safety is the primary focus of the crane rental market. They face challenges around lift capacity, large operating crews, and tight deadlines, all of which must be executed with a safe operating plan.
In some regions, crane rental companies must comply with local government-regulated safety standards. For instance, larger cranes usually have two engines (for lifting and driving), both of which have several maintenance requirements and must undergo prework safety checks as proof that the crane is safe to operate.
Furthermore, maintenance and service costs associated with cranes could be high due to costly replacement parts or unavailability of the expertise to provide the service.
Solution: The software you opt for must give detailed information about the maintenance that your crane requires. With STAEDEAN Rental Management, you can carry out preventive maintenance and tackle crane maintenance issues around motor problems, bent hooks, wear and tear of the tracks, damage to the end truck wheels, electrical issues, worn-out cabling, or rail misalignment.
It covers scheduled and unscheduled maintenance and offers information on each crane’s maintenance history. In STAEDEAN Rental Management, you can have multiple engines with meter readings using IoT to know about the required maintenance.
Mandatory checks can be done using a mobile app wherein field technicians can register the state of the crane and ensure that necessary checks have been done. You can also use the STAEDEAN Rental Mobile Operations to offer quick resolution around any repair or maintenance with access to relevant information anytime and anywhere.
Inventory is the lifeblood of a crane rental business, and mismanaged inventory due to improper tracking is costly. This is especially true for a globally operating crane company, with the cranes moving across different regions or countries.
In such cases, you would have to keep track of the financial ownership of the crane (the entity that financially owns the crane and has it listed as an asset) and the physical ownership of the crane (the entity or entities that utilize the crane for different projects).
Solution: Track availability by opting for software that shares information on equipment availability in real-time. In STAEDEAN Rental Management, you can view all your upcoming crane reservations from a single dashboard, from booking to return, in one place, helping with the planning and allocation of your cranes efficiently.
You can have an overview of the crane's history — be it renting, repair, maintenance, or location. You can store, track, and access information such as the movement of the crane across different countries, details on kilometers/miles run or kilograms/tons lifted, previous transactions, and so on.
This helps to retain the entire history of the crane, irrespective of which entity is physically using the crane, so every party involved has all the information on the crane, whenever required.
Whether you specialize in renting out a variety of cranes or are in a specific crane business such as loader cranes, mobile cranes, crawler cranes, overhead cranes, and so on — you would want to keep up with the latest demands in the market to address the customers better.
For instance, there is growing popularity of mobile cranes as per a study by Global Market Insights stating that it is estimated to grow over 5% CAGR by 2030.
The type of crane — size, model, etc., which fetches the most revenue for your business could differ depending on where you are located. However, it’s important to know which cranes are your best-performing set.
Solution: An equipment rental software such as STAEDEAN Rental Management, that has advanced analytics with specific KPIs can provide you with insights on crane performance, utilization rates, booking trends, and more through detailed reporting and IoT sensors.
These reports on how your cranes are being rented out and utilized allow you to calculate financial planning and budgeting more accurately. You can buy newer cranes of greater demand to earn higher margins.
How STAEDEAN Rental Management can take care of your crane management end-to-end
Here’s an overview of how STAEDEAN Rental Management can handle the crane rental life cycle
STAEDEAN Rental Management can handle the end-to-end operations of your crane rental management:
Rental ready or manufacturing: Being embedded in D365 F&SCM, STAEDEAN Rental Management leverages all the capabilities of the standard ERP and can manage the manufacturing, selling, and renting aspects of the crane business. For instance, tower crane manufacturers can handle the manufacturing processes within standard D365 and the rental processes in STAEDEAN Rental Management.
Scheduling: Use the STAEDEAN Rental Management plan board to schedule people and resources. Manage tasks and work orders in a single location.
Assigning: Post the work order and assign the job to the required personnel. Handle personnel easily with the human resource management functionality in STAEDEAN Rental Management.
Job received: Skilled drivers, technicians, and operators will receive the work order on their mobile device with the STAEDEAN Rental Mobile Operations and put in their hours.
Delivery: The project deliverables begin — the actual work done, and hours utilized are posted, which forms the basis of the invoice.
Invoicing: The customer is invoiced based on the total work done as tracked, with prices agreed upon by both parties.
Return: The rented crane returns to the depot after the invoice is cleared.
Maintenance checks: All necessary inspections and prework checks are carried out with repairs and upgrades to ensure the crane is safe for operational purposes.
Here's a testimonial on the STAEDEAN Rental Management software by Ainscough Crane Hire, a UK-based crane rental company.
“STAEDEAN Rental Management is a game-changer from a business perspective. We have a far clearer indication of the nature and time of any potential work. It doesn't matter if the staff is in the field with a tablet and telephone or at home with their laptops — if it's a basic crane hire, or a complex job requiring multiple cranes — the STAEDEAN Rental Management system can manage all of it.”
– Simon Baines, Head of Business Support, Ainscough Crane Hire
If you’re interested in a rental solution embedded in Dynamics 365 Finance and Supply Chain Management, STAEDEAN Rental Management might be just what you’re looking for.
You could explore more about the STAEDEAN Rental Management solution by checking out our factsheet.
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