Transitioning to Tier 4 Final: Rental Market Concerns and Outlook
Large national rental companies are likely to make the transition to Tier 4 Final (T4F) faster than smaller companies. This is occurring to meet the needs of their national account customers who have government projects that mandate the use of equipment with less engine emissions. Other rental companies serving the health care market also will likely have customers who require quieter machines with less engine emissions.
For mid-level and small rental companies, there currently are more questions than answers. Most are concerned about new engine technologies because of unproven reliability, increased maintenance and increased equipment costs. There is a fear of the unknown. This leaves these companies with difficult decisions regarding fleet equipment purchases and upgrades in the interim.
Many believe the initial impact of T4F will be negative on the industry, with obvious concerns due to the equipment being more expensive. As a result, many companies are deferring purchase of T4F equipment and prolonging the life of their non-T4F fleets. However, the playing field is being leveled. All new production diesel powered non-road equipment sold is to be T4F compliant as of 2012 and the window to “flex” non-T4F is ending in 2018. At that time, the rental market will begin bare the increase in rental rates to offset the higher equipment costs.