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The American Rental Association (ARA) has announced the publication of “ARA Rental Market Metrics™,” a white paper outlining industry standards for calculating and reporting equipment rental company performance metrics. The publication 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 for 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. 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,” says Christine Wehrman, ARA’s CEO.
“Several key performance metrics for equipment rental businesses are unique to the equipment rental industry. 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,“ says 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.