Why plant hire needs the CPA more than ever

Tough market conditions and an increasing array of legislators from the GLA to the EU mean the plant hire industry needs stronger representation than ever...

The UK leads the world in plant hire - and with over 80% of plant sold in the UK going to plant hirers, it probably still does. Nobody is more aware of the changes in outlook for plant hire than its trade body, the Construction Plant-hire Association (CPA). Its 1,500 members spent last year battling to get machines from the manufacturers in order to satisfy their customers' demands, and are now finding it's not so easy to get those machines out of the yard.

But CPA chief executive Colin Wood believes things may get worse before they get better: "It's not too bad at the moment as many members have existing work. I believe it could really hit home in six to nine months when current contracts come to an end.

"During difficult times it is vital that companies keep an eye on costs and machine and operator utilisation levels. Some hard decisions may have to be made, but it is vital that they are made," he says.

"This is particularly hard for some of our members because they are family businesses. But if those decisions aren't made and costs brought into line with the trading situation, the complete company may go bust and everybody will lose their jobs.

"In these times it is vitally important that members are extremely vigilant on credit control. A hire company may not survive if one of its customers goes under owing it a lot of money.

"Members should also have a good think about the level of demand they expect over the coming months and review any machines on order. We have heard of some cancelling forward orders, but nothing concrete as yet."

When to sell kit

His advice is, and always has been, for members to sell their machines when there is plenty of work around because residual prices are at their highest. "When there is plenty of work, the inclination is to hang on to older machines. But that's a mistake because when the work tails off, the residual value drops," says Wood.

"Last year you could sell a three-year old ADT for almost as much as you paid for it - but not any more. Machines can still fetch good prices in some overseas markets, so that might be worth looking at."

And he is speaking from experience having spent 40 years in the plant industry including being on the board of several national crane hire companies. Seven years ago he took up his position at the CPA.

At that time the Association had fewer than 1,100 members. This has since risen to 1,571 as hirers face an increasingly complicated legislative landscape and seek to have their collective voice heard. But Wood expects membership may well fall as the economy falters: "During the last recession in the early '90s, the CPA lost more than 300 members," he says.

The Association's influence has also grown over the years and it was able to alter thinking in the Treasury that would have otherwise seen mobile cranes and aerial work platforms banned from using red diesel on the road.

Not only would such a move have been costly, it would also have created enormous security problems storing the more expensive fuel.

To cater for members' day-to-day issues the CPA publishes a number of guides on topics from health and safety best practice to subsistence allowance as well as its well-known Model Condition for the Hiring of Plant. For members with individual problems, the CPA also offers legal advice and insurance services.

Advice and support

While not wishing ill fortune on any business, Wood says: "We are here to advise and support our members through the difficult times." Typical examples are the issues that surround semi-automatic quick hitches and the correct use of excavators in lifting operations. It is currently working on guidance and training packages covering both these areas.

Much of the CPA's work goes on in the background, such as that within the Strategic Forum, where it is helping the efforts to prevent any more tower crane accidents.

Not only does this help to improve site safety, it also brings the CPA closer to the organisations representing contractors, which are some of its members' main customers.

Even before the collapses at Battersea and Liverpool that led to the Forum's work, the CPA's Tower Crane Interest Group had started work on new guidance on the maintenance, inspection and thorough examination of tower cranes.

Other major commitments include input into operator training, having members on the management committee of the Construction Plant Competence Scheme (CPCS), and plant theft with representation in the Plant Theft Action Group as well as the Construction Industry Theft Solutions group.

Now the plant hire concept is spreading worldwide and the CPA is taking a leading role in the formation of the European Rental Association (ERA). Wood is vice-president of ERA and Kevin Minton (the CPA's senior technical manager) chairs the EU Affairs Committee, while CPA training and technical manager, Haydn Steele, is on ERA's Plant Theft Committee.

Plant hirers may be going through tough times, but Wood believes that the increasing array of legislators from authorities such as the GLA to the EU mean the industry's need to be represented is stronger than ever. And he remains determined that the CPA will give it that voice.