ARA introduces industry performance standards
The American Rental Association (ARA) announced Sept. 26 the publication of ARA Rental Market Metrics, a white paper outlining industry standards for calculating and reporting equipment rental company performance metrics.
ARA Rental Market Metrics provides equipment rental companies a consistent way of calculating and reporting critical performance measures. It develops industry standards for the definition of a day, original equipment cost (OEC), and the calculation of time (physical) utilization of equipment, financial (dollar) utilization, fleet age and percentage change in period-over-period rental rates.
“The development of rental performance metrics marks a new chapter in the equipment rental industry,” said ARA’s CEO Christine Wehrman. “Standardizing the methods equipment rental companies use to calculate performance measures will advance individual businesses and industry performance in a consistent manner. ARA undertook this landmark initiative to further the growth and professionalism of the industry.”
“Several key performance metrics for equipment rental businesses are unique to the equipment rental industry,” said John McClelland, Ph.D., ARA’s vice president for government affairs, project leader and co-author of the white paper with Michael Graboski, Ph.D., an ARA consultant. “Most of these metrics are associated with fleet efficiency and utilization. Consistency in reporting metrics was missing in our industry and made it virtually impossible for rental businesses to assess their performance relative to their peers.”
ARA convened an industry-wide advisory group to lend counsel and advice during the development of the ARA Rental Market Metrics white paper. Dan Kaplan, a rental expert from Daniel Kaplan Associates, Morristown, N.J., provided the initial inspiration to ARA for this project and contributed to the effort.
“The industry took this initiative seriously and worked collaboratively in the formation of these metrics,” added Wehrman. “I believe adopting the use of ARA Rental Market Metrics will be of great benefit to the equipment rental industry.”
For more information about ARA, visit www.ARArental.org.
