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JANUARY-FEBRUARY 2014
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INTERNATIONAL
business that has been driving the improved
results, which is not surprising given that it still
represents more than 90% of the company’s
annual US$1.4 billion revenues.
With the growth have come significant
changes in the way HERC operates in North
America, with traditional construction markets
now representing 35% of revenues, down from
50% at the peak of the market in 2006 when
HERC’s revenues were nearer $1.7 billion.
Filling the gap has been the ‘industrial’
sector, which now accounts for 25% of the
total, up from 15% in 2006. “Construction
business has been HERC’s claim to fame, but
it’s very cyclical”, says Ms Boyd, “We need
diversification and stability in the business,
and we need to be the right size to take
construction business when it comes back.
Industrial sectors are more stable – they are
always doing plant turnarounds and shutdowns
[for maintenance].”
This has meant that HERC has had to
restructure its depot footprint, migrating to
new areas where its customers are, whether
through acquisitions or greenfield openings.
Hand-in-hand with this diversification
has been a new hub and spoke strategy, with
plans to develop around 20 to 25 major hubs,
centralising fleet servicing and repair activities.
“We expect to have eight to 10 superhubs by
the end of 2014,” she says.
Also filling the gap left by the construction
downturn has been niche or specialty rentals,
L
ois Boyd’s appointment as president of
Hertz Equipment Rental Co (HERC)
in April 2011 proved to be good timing,
with her tenure coinciding with the US rental
recovery and the return to growth of the
HERC business itself.
She was probably due a break, since her
previous task at Hertz had been to take
Advantage Rent A Car – acquired by Hertz out
of bankruptcy in 2009 – back into profitability,
something that she achieved before the switch
to HERC.
Since then her leadership at the rental
business has been a story of capitalising on the
North America upturn – HERC’s revenues
grew by 12% in 2011, 15% in 2012 and 14%
in the first nine months of last year – and
increased engagement in international markets.
Ms Boyd says the much talked about
increase in rental penetration in the US has
helped propel the North America growth, with
some contractors now favouring rental over
ownership. “It appears that it will continue to
trend that way – a lot of people got stung when
the downturn came.”
At the same time as that ‘secular shift’, other
markets have opened up; “There is an ongoing
upturn in oil and gas production in North
America. So that has continued to absorb more
equipment.”
While Ms Boyd remains cautious about
the US economy – describing it as “solid, but
not robust” – it is HERC’s North American
including pumps, power and entertainment/
film rentals, the latter boosted by the 2012
acquisition of Cinelease.This kind of
equipment now represents around 15% of
the fleet, double what it was in 2006, and is
presenting further growth opportunities.
Platform growth
It is notable that aerial platforms continue to
occupy an important place in the fleet – aerials
have increased as a proportion of the fleet
from 22% in 2006 to 24% in 2012.This reflects
the ubiquity of scissors and booms in the
expanding industrial sector as well as in niche
markets like entertainment and film rentals.
That contrasts markedly with the fall in the
size of the earthmoving fleet, down from 30%
of the total in 2006 to 22% now, reflecting the
reduced exposure to pure construction.
Given the size of the company and its parent,
there are some who wonder why it has been
relatively modest in its international expansion.
These businesses still represent only 10% of
total revenues, and are dominated by the well-
established operations in France and Spain.
Despite this domestic focus, HERC has
continued to invest in its Chinese operation –
INTERVIEW
Making gains
With aerial work platforms steadily increasing their
prominence at Hertz Equipment Rental Co (HERC), the
company is also viewing international expansion.
Murray Pollok
speaks to its president.
Lois Boyd, president of Hertz Equipment Rental
Corp (HERC).
‘Industrial’ rentals now
account for around 25%
of HERC’s total business,
up from 15% in 2006.
