Anatomy of an Independent Equipment Rental Fleet
Posted on: 12 Nov 2018
John Sherlock’s story is one of evolution. Sherlock owns Sherlock Equipment in Bremerton, Washington – serving the Kitsap Peninsula with compact track loaders, mini excavators — and growing now to include dozers, mid-sized excavators and backhoes. Sherlock himself was a contractor until 2011, when he transitioned into short line equipment sales and, eventually, equipment rental in 2014.
“We saw the need for good quality rental equipment in the area, and we try to supply our customers with the best equipment we can get,” says Sherlock.
To call The Kitsap Peninsula a “peninsula” isn’t quite fair. It’s geographically accurate, but it’s a whole region of its own, home to more than two dozen towns and numerous bays and inlets that support local tourism and residents alike. Housing is booming in the area, which has created a demand for equipment rental – both from contractors and DIY homeowners.
“A lot of the bigger outfits don’t want to deal with homeowners or small contractors like we do,” says Sherlock. “We try to provide our customers with the newest and latest machines — all our machines are Tier 4 Final. That means something to us because we do care about the environment. We don’t just go to the auction and buy the cheapest machine, put a new paint job on it and try to get that last rental out of it.”
“We buy our equipment brand new,” says Sherlock. “We try to keep our machines down on the lower hour range — that way we can ensure that our customers are renting the best machines out there — the most current, and the most mechanically sound.”
The philosophy extends even further for Sherlock, as his business model addresses another shortfall on his region: the availability for purchase of good, well maintained used equipment. He intentionally buys new equipment and keeps relatively low hours on it before he turns around and sells it to contractors in the region.
“That way, we’re in control of that equipment from day one,” he says. “We know the machine from when we get it. We know where we got it. We know [the hours on it]. And we know what service has been done and not done.”
Equipment Demand Drives Expansion
As the type and size of contractor/project who rents from him continues to grow, Sherlock has been driven to increase the size and capabilities of his fleet. This has included the recent acquisition of a new CASE 650M dozer and a 580N EP backhoe loader. Both are ideal for rental businesses as they operate at 74 horsepower and offer maintenance-free Tier 4 Final emissions solutions that simplify owning and operating costs — and the learning curve for renters.
“We chose the 650M for its simplicity, its Tier 4 aftertreatment is very simple. Its maintenance is very simple — the machine is clean and it doesn’t have a lot of extra stuff on it.”
The 650M also comes standard with CASE ProCare: a suite of product assurances that includes a three-year Advanced CASE SiteWatch™ telematics subscription, a three-year/3,000-hour full-machine factory warranty, and a three-year/3,000-hour planned maintenance contract. This makes owning and operating costs for the first three years entirely predictable, and creates a record/expectation that the equipment is maintained as it was intended.
“Not only is the machine a good value, but that tells me that CASE is going to stand behind it,” says Sherlock. “I believe it will be an advantage when we go to resell the machine if we sell it in that time period [it is transferable to the next owner]. If we don’t sell it within that time period, it shows that the scheduled maintenance was done [to manufacturer recommendations].
The addition of a backhoe also fit a growing customer demand, and addressed a generational preference for older operators who choose the backhoe over compact equipment. At 74 horsepower – and with a backhoe bucket breakout force of 11,517 pounds, backhoe lift capacity of 2,858 pounds, and peak torque of 233 foot-pounds – the 580N EP provides ample power and performance while keeping fuel, maintenance, and owning and operating costs low.
“We chose the 580N EP for its simple design,” says Sherlock. “It doesn’t have a lot of bells and whistles — but it does have the ones you need. It has a comfortable seat, it’s responsive and it has pilot controls — your average operator, that’s all he needs. There are some older operators that don’t know much about the skid steer, they don’t know about the mini ex — but they know a 580 backhoe because their dad had one.”
Sherlock also expanded into his first “mid-sized” excavator this year when he added a CX75C SR, a minimum swing radius excavator that, at 55 horsepower, also does not require complicated aftertreatment — all while providing more substantial digging power.
“We can haul it on our solo truck. It’s got the power of a big machine and the size of a small machine — it fits the mold for a guy who needs a bigger machine than a mini. He can go clear his acre, his two acres – it’ll still do everything he needs it to do.”
Demand Remains for Compact Equipment
While Sherlock has expanded his equipment fleet, the greatest demand from his customers still revolves around compact track loaders (CTLs) and mini excavators. He has similarly relied on simplicity, no/low maintenance emissions and practical application benefits to build this part of his fleet. Sherlock has outfitted his fleet with two CASE TR310 CTLs — operating 74 horsepower and 3,100 rated operating capacity — a great rental combination of simplicity and performance. Sherlock chose a radial lift machine because of the type of work most of his rental customers use it for.
“Our customers aren’t doing a lot of truck loading,” says Sherlock. “They still have good lift height, but our customers are prepping foundations, backfilling foundations — their work is on the ground.”
Another recent addition includes the CASE CX17C mini excavator. The CX17C features a zero-tail swing design for improved maneuverability in congested areas and an auto-shift travel system for operator convenience in varying terrain. It also features a bucket digging force of 3,490-foot pounds, providing enough power for tough jobs, but nimble enough to access more confined areas.
“We chose the CX17C to fill a gap,” says Sherlock. “Our 7,000-8,000 pound machines are just a little too big for some guys. So some of our septic customers, our homeowners, they’ll want to take the CX17C because of the size. It can fit in their back yard. It has [retractable] tracks. A lot of customers can haul it themselves.”
“It’s tough. It holds up. The service points are simple. They are all where you need them to be. Which, when you’re trying to get a machine off rent, and then back on rent, time is money — there’s just not a lot that can go wrong.”
A Strong Partnership
Given Sherlock’s business model, conventional wisdom dictates that many equipment dealers may see him as competition. The working relationship between he and Ryan Jackman of Sonsray Machinery, however, has proven to be a great template for exploring mutually beneficial business partnerships between equipment dealers and independent rental businesses.
“Sonsray Machinery has been great to work with since the start,” concludes Sherlock. “Whatever it is, whether it’s machine related or customer related — at that point, it doesn’t matter. It’s all about who you get on the other end of the line. Are they going to support you? Are they going to do what they can to get that machine back up and running? Sonsray has not only delivered, but I feel they have gone above and beyond with support.”