Move more, pay less: Short-term equipment rentals keep festive supply chains moving
“WITH warehouses, logistics centres and retailers operating at peak capacity to meet festive season demand, short-term rental solutions offer essential flexibility.
To stay competitive, equipment suppliers must be well-prepared to support their customers through seasonal spikes or risk losing a key strategic advantage,” says Refilwe Molapo, General Manager of Toyota Material Handling Johannesburg, a division of CFAO Equipment. He says Toyota Material Handling experiences a 10% to 15% higher-than-normal run rate over the festive season. “This is largely driven by the fast-moving consumer goods (FMCG), retail, logistics and warehousing sectors, which all operate at peak capacity over this period.”
For these operations, agility is key. They need to scale up their material handling capacity quickly for a short period. Short-term rentals allow them to do so, increasing their throughput and efficiency without having to take on the commitment of a long-term rental or outright purchase. Molapo says while the seasonal peak typically kicks off during October, this year’s peak started earlier than usual. “We noted an increase around the end of August. This could be attributed to the current economic climate, compelling customers to be more price sensitive and get ahead of the December rush, taking advantage of deals, as well as the convenience of online shopping.”
Typically a four- to five-month push, the rush is expected to slow down at the end of January, which includes back-to-school. “Our customers tend to experience a festive season peak, which dies down briefly before the back-to-school peak commences,” notes Molapo. He says equipment rental makes sense for two main reasons: flexibility and cost management. “These businesses experience a seasonal surge, which does not justify a long-term lease or investing in capital equipment. Short-term rental gives them the ability to respond to these peaks without locking up their capital, freeing up their balance sheets. It really is a practical and cost-effective strategy for managing these types of peaks.”
Operationally, the Toyota Material Handling team begins to prepare for the festive season demand several months in advance. “We start by examining historical demand patterns and customer forecasts. Market trends and information are critical to ensure we have the right types and number of units to support what the market is going to need from us. We also engage with our customers, most of whom place their orders well in advance to secure the additional equipment for their fleets,” adds Molapo.
All units in Toyota Material Handling’s 862-strong Johannesburg/Polowane/Nelspruit rental fleet undergo comprehensive mechanical inspections, servicing and safety certifications ahead of the festive season to ensure they are in good working order and reduce the risk of disruptions to productivity. Responsible for Johannesburg, Nelspruit and Polokwane, Molapo says the business also takes the logistics between branches into account. “We assess which equipment is most in demand in each region and try to balance the supply accordingly. If a particular type of equipment is expected to peak in demand in Johannesburg, we shift it from Nelspruit and relocate the necessary equipment for Nelspruit from there.”
In addition to ensuring the availability of relevant equipment, Toyota Material Handling must also assess parts availability and coordinate with suppliers, many of whom shut down during the festive season. “We need to ensure our internal capacity and capability are prepared to sustain operational efficiency during this period,” says Molapo. Additionally, aftermarket and logistics capabilities are intensified during the festive season. “Short-term rental differs significantly from long-term rental. Responsiveness is crucial and we must be flexible enough to deliver within 24 hours, ensuring quick turnaround times and the availability of technical support. We have an in-house transport department dedicated to rental operations, which helps streamline these processes,” explains Molapo.
The sharpest increase in demand for warehousing and retail distribution equipment over this period is for pallet jacks (50%), narrow aisle equipment (50%), reach trucks (41%) and electric counterbalance equipment (28%). Top of mind during this period are reliability and flexibility. Molapo says the business makes sure technicians are available in all major hubs. “We have a full short-term rental unit on standby to respond to breakdowns and swap out equipment where necessary. “It is an exciting time of the year and the impact on our business and our customers’ operations is significant: our customers’ demands really test how we are geared up to support them. The key to success is being well prepared long in advance. If we do it properly, we can sit back and be the attentive business partner our customers expect, helping them through this difficult period effectively,” he concludes.
