Japan's rental industry struggles with recovery efforts

By Murray Pollok16 March 2011

Japan's rental industry is working hard to provide back-up for the country's rescue operations following the earthquake and tsunami last Friday but is being severely hampered by shortages of equipment and fuel.

In a statement to IRN, Mr Masaki Kurita, chief executive officer of Nikken Corp, one of Japan's largest rental companies, said rental companies in the affected areas were doing their best to meet requirements, but were facing an unprecedented situation; "Some of the big players have completely lost their business [depots] by the tsunamis, which is forcing them to prepare second locations for logistics. Some equipment and machinery, which was being rented, has been washed away by the tsunamis, which makes supply situation even worse.

"These situations are completely new to the industry, which has rich experiences and know-how to meet the rental orders required in the rescue as well as recovery of the earthquake affected areas".

Mr Kurita said the disaster came at a bad time for the industry since it has yet to fully resume capital investment in fleet following the financial crisis and because February and March are traditionally the busiest months, with equipment utilisation already high.

"Combining these two perspectives, current availability of the industry's rental fleet seems to be far less than the volume required to meet the immediate requirement of the rescue operation", said Mr Kurita.

"Rental orders came to our Special [Emergency] Teams both from government entities and private companies but we are afraid that our industry may not be able to respond in full. In addition to this dilemma, availability of fuel required for transportation and operation of the rental fleet has become a big issue to everybody in the industry."

Equipment most in demand currently includes portable accommodation and toilets, light towers, generators, light vehicles, heating equipment and water tanks. Now companies are seeing increasing orders for heavy earthmoving equipment to assist in clearing damaged areas.

Mr Kurita said another problem was lengthy lead times for new equipment, since Japanese manufacturers have also been affected by the disaster. "We intend to renovate some of our fleet, which was originally allocated for sale, and put them back into our operations as quickly as possible to cover the rental orders expected in the coming months."

Nikken mobilised its disaster response teams very quickly in the aftermath of the earthquake, revealed Mr Kurita; "Immediately after the shock waves calmed down at our head office in Tokyo, we activated the Corporate Crisis Management plan, headed by the president and consisting of the pre-assigned directors and managers to find out about the safety of our employees as well as to identify any damage to our business bases located in the most affected areas.

"In parallel, special teams were organised in our business division to attend to our customers as well as our logistics."

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