As a goal-oriented, client-centered rental equipment business. your customers rent from you because they save money, gain flexibility, and avoid the cost and complexity of maintaining company-owned equipment. Renting from you also allows companies to try different equipment pieces and models to determine which is the best one for their tasks before investing in their own.
An InTents Magazine article says the American Rental Association (ARA) outlook for equipment rental revenue forecast calls for a 9.68% increase in revenue this year, increasing to almost $52.5 billion. Even in 2021 and in spite of the pandemic, the North American equipment rental industry revenue increased by 4%.
Many contractors find it’s more cost-effective to rent equipment instead of buying it primarily because of changes in tax-credit laws in the 1980s. These changes made renting more affordable leading to an increase in rentals, especially in recent years. With equipment rental trending upwards, it is a prosperous time to be in the equipment rental industry and more important than ever to have effective security solutions in place. Rental equipment theft is a concern that must be addressed if you want to thrive in this business.
Why Does Rental Equipment Theft Happen?
It’s easy to think equipment theft will never happen to you until it does. Besides, data tells a different story. Crooks target heavy equipment because they get an average of about $29,000 for each piece according to the National Equipment Register equipment theft report. Thieves and organized crime gangs covet heavy equipment, regardless of whether they’re rented or owned. To them, the rewards that come with stealing outweigh the risks as there is a high demand for heavy equipment.
An Equipment World magazine survey shows that almost 70% of the respondents had been victims of equipment theft. This accounts for more than 50% of all heavy equipment losses, much higher than collision, fire, and vandalism.
Rental equipment has a higher risk of theft than owned equipment. That’s because it makes up 30% of all construction equipment as IRMI reports. In other words, almost one-third of common heavy equipment is vulnerable to theft. Stolen equipment affects the construction industry and other hands-on professions.
Here are the reasons why rental equipment tends to be a greater risk of equipment theft:
- The company renting the equipment is less likely to take steps to secure the equipment because it’s not theirs and it’s easy to replace.
- Equipment renters find it cost-prohibitive to take physical security measures to protect equipment they do not own.
- Thieves find it easy to plan for equipment theft because the equipment is often left unattended. and they will pretend to be the rental company collecting equipment.
- Thieves have grown sophisticated. They create false identities to rent and steal equipment From rental companies .
While your equipment may be insured, equipment theft still has far-reaching effects on your business.
- The insurance company may increase the premium or the valuation if the claim settlement turns out to be less than the valuation in the rental contract.
- You will experience revenue loss while you wait to replace the stolen equipment pieces.
- You potentially lose customers if they must go to a competitor to rent equipment that you currently do not have available.
The Painful Side Effects of Rental Equipment Theft
Prevention of equipment theft is imperative because the recovery rates are low. NER states that out of the more than 11,000 equipment theft reports, only one-fifth were recovered. Notice that this only focuses on those that were reported. Many companies never report the theft to prevent their insurance premiums from going up.
Your equipment rental company depends on the physical security of that equipment. When your equipment gets stolen or destroyed, you lose money and potentially your business. You could pay a higher price for equipment theft than you would securing the equipment and your rental facility.
The recent articles on NER in the news all cover equipment theft as it’s experiencing a five-year rise in reported incidents, especially around the holidays. It’s not just the holidays at the end of the year when equipment theft climbs. It also happens during the weekends around Memorial Day, July 4th, and Labor Day.
The top targeted equipment types vary from holiday to holiday with the following frequently making the list of commonly stolen equipment:
- Mower
- Skid steer
- Utility cart / vehicle
- Tractor (wheeled)
Moreover, equipment theft patterns often reflect the overall economy according to the National Equipment Register. As the world makes progress toward some normalcy, equipment demand continues to soar. The scarcity of equipment continues to cause a supply and demand problem that has resulted in a greater demand for equipment followed by an increase in equipment theft.
Equipment scarcity puts your business at a higher risk for big losses when you cannot replace stolen equipment. Hence, NER advises all businesses to be on guard for theft and do what’s necessary to prevent it.
You cannot think that equipment theft will never happen to your equipment rental business. It’s better to think in terms of it will happen, it’s just a matter of when. This thinking ensures you do what’s necessary to secure your most expensive assets.
How You Can Cut Your Risk for Equipment Theft
You can strengthen your rental equipment business security in the following five ways. It works for businesses like yours, especially when you are not able to lock up your biggest and most expensive assets inside a building.
1. Install effective lighting
Without effective lighting, thieves are tempted to steal from your equipment rental business because they feel safer and believe they will not be seen. There is an art and science to effective lighting for security. Thus, the best way to ensure your business has the right kind of lighting is by working with a security consultant.
They help optimize the lighting for your location lowering your risk of theft. Once they’ve done their job, it’s critical to stay on top of the lighting to verify it still works or to replace damaged lights.
2. Install a fence
This may or may not be an option depending on your property or laws that may affect whether you can use a fence. The main goal of putting up a fence around the property is to create a single entry and exit point. This allows for an easy and effective way to monitor everyone who comes to your business, check people’s credentials, and maintain more control over who enters your property.
Trespassers can cut or climb fences which can be deterred by adding another barrier such as barbed wiring. The more layers you have in your security, the less likely intruders will choose your business as the site of their next theft. Just like you need to inspect your lighting regularly, you also want to do the same with your fencing to make sure it has not been damaged or tampered with.
3. Use asset management tracking system
As an equipment rental business, you likely have an asset management tracking system. First, make sure you add identifying information to your equipment by stamping or engraving the information on the equipment and avoid using labels that are easily removed.
It also helps to insert covert GPS trackers to help you stay on top of your assets and their location. This not only helps if a theft happens but also knowing where your equipment is at all times. While some sophisticated thieves and organized crime gangs may have GPS jammers, it’s still worth doing.
Be sure to add all the data into the asset management tracking system including the information you etch into the equipment, GPS information, and photos. Anytime equipment theft happens, this information will come in handy for making your insurance report and sharing it with the police, National Insurance Crime Bureau, and any other organization that needs this information. A potential bonus of using an asset tracking system is that it will notify you when it’s time for a specific asset to go in for servicing to extend its life.
4. Conduct security training for employees
An employee can easily make a mistake to create a gap in your security. All employees should undergo a background check and security training. It should be part of your orientation and onboarding process for new employees and everyone should receive security training regularly as part of your safety program.
5. Implement remote video surveillance
Unlike most traditional security systems that are reactive, remote video surveillance takes a proactive approach to security and deterring equipment theft. It can help prevent crime and damage before it happens. The system pairs a trained monitoring operator with video analytics to watch over your equipment rental business for suspicious activity in real-time.
The operator is not located on your site. They’re monitoring your property from a remote location. When they catch a problem, the operator can send an audio warning to the intruders over on-site speakers. If a suspect does not leave after the warning, the operator can call law enforcement and give them a report while tracking the suspect.
You have a variety of options for video surveillance with monitoring. If your security cameras can only see in the daytime and show dark footage in low lighting, it won’t do you any good. One of the things you want to look for is that everything on camera is identifiable regardless of the lighting. Beware that not all security cameras have the capability to make out faces, license plates, and vehicle information.
A remote video surveillance system can save and store all recordings. If someone reports a problem or tries to make a liability claim, trained analysts can search through hours of footage to locate the activity in question. Liability claims are hard cases to win and video surveillance could help guarantee you have the evidence you need to make your case and protect your equipment rental business.
Remote video surveillance can deliver a quick ROI because it can help your business in other ways. The technology could catch safety hazards, bottlenecks, and breakdowns in processes.
Implementing these five ways can help cut your risk for equipment theft while maximizing your security investment. You’ll get better results when you work with a security company like Stealth because we have partnerships with law enforcement across North America. We can design and build a security system to meet your company’s requirements and budget. To learn more, check out this free guide on Remote Video Surveillance: More Than Just Catching Criminals or contact us.
