Public knowledge

Every successful company in this industry has the same secret to success: service. Great customer service is so important in the rental game that this magazine has the word right in its title.

4-Way Rentals survives in the cutthroat Alberta rental market because it gives great service. How? Mandin is free to concentrate on operations while the corporate head office handles administration.

But things get more interesting when you ask why some companies have better service than others. In the case of Marc Mandin, chief operating officer of 4-Way Equipment Rentals and incoming Canadian Rental Association national president, great service and great success have followed the intelligent application of knowledge. After 26 years in the Edmonton, Alta., rental market, Mandin knows his customers, knows the rental business and knows how to turn the assets he has into bigger and better assets. 

Mandin got his start in the rental industry in 1988 at the departed Rite Equipment Rentals in Bonnyville, Alta. He was working on his master’s degree in vocational education (Mandin has a bachelor of education degree and is a journeyman carpenter) when Ian Kossowan contacted him looking for someone to manage his branch. Mandin’s first son was on the way and he needed, as he puts it, “a job in the real world.” In the Bonnyville location, Mandin rented to commercial, industrial and oilfield construction projects. In 1992, he was given additional responsibilities as operations manager for both Rite Equipment and a sister company called Western Shutdown Services in Edmonton. Western Shutdown provided equipment rentals and tool crib services to lumber mills and oil refineries throughout the prairie provinces. When Western Shutdown was purchased by Certified (which later was absorbed by Hertz), Mandin moved to Fasco Rentals in Whitecourt, Alta., where he worked until it was bought by RSC in 1998. From there he made his last move to 4-Way and has been back in Edmonton ever since. Along the way, Mandin has touched just about all the main equipment rental sectors
in Alberta.

4-Way was founded by Peter Skrobot, Henry Wisselink and Peter’s wife, Vicky, in 1975. There were originally supposed to be four partners, but one backed out and, as Mandin puts it, “They didn’t think 3-Way would be a good name for a company.” 4-Way’s current owner, Wayne Wadley, bought the company from the original partners in 1998, and brought Mandin on board to manage operations. Mandin was involved with a short-lived foray into running an RV dealership at the time, but he jumped at the chance to get back into the rental industry.

“It is a real challenge,” he says. “You have a lot of variety and when I talk about rentals, I talk about the rental game. It is a challenge keeping ahead of your sales staff and the fun part is the logistics.”

4-Way has grown significantly since it became part of a public entity. The cash injection has helped it take advantage of the booming commercial construction market in Alberta.

Wadley took the company public in 2005, effectively selling 4-Way Rentals to Canadian Equipment Rental Fund, a corporation he started that trades on the Toronto Stock Exchange. 4-Way is now one of four business units within the Canadian Equipment Rental Fund, or CERF, a group that includes Trac Energy Services, a rental operation for the oil patch, and MCL Waste Systems and Smart-Way Disposal and Recycling, two waste-management businesses. Wadley, who ran a junior oil company called GeoCan Energy, was familiar with public stewardship and was seeking a stable revenue stream to balance out the boom/bust cycles in the oil business. Equipment rental provided that, and Mandin has provided the management expertise to keep the shareholders happy.

The advantages of going public in the rental business were obvious right from the start. In a healthy market (like Alberta’s), the growth of a rental store is really only limited by its access to funds to buy fleet. Going public gave CERF an early injection of $4 million. Try going to your bank for that. “In the first two years we were able to do the equivalent of about 12 years’ growth,” Mandin says. 4-Way moved from a 5,000-square-foot store into a 16,500-square-foot facility and doubled its yard to six acres. He is quick to point out that timing played a big role, with CERF’s public offering coinciding with a period of tremendous growth in the Alberta economy and in the oil patch in particular. Still, it is hard to think of any other way a rental company could access these kinds of funds. “You want another million dollars revenue, you have to have another million dollars’ worth of fleet,” Mandin says. “It is not going to come just by wishing for it.”

But going public is not for everyone. One significant factor that many rental owners would have to overcome, and that Mandin has struggled with himself, is the requirement to open the company’s books to the public. “That’s one of the things with a public company,” Mandin explains. “Everybody knows exactly what you are earning. If you look in the right spots, you can see exactly what I am getting paid. I am a pretty private person, so that kind of annoys me, but what can you do? It is part of the package.”

Accounting, taxation and filing reports all become much more involved processes in a public company. There are tight deadlines to meet and strict standards to adhere to. You are only as good as your last quarter; any period of stagnation or decline that is not adequately explained in your financial reports will be punished in the markets. 4-Way has benefited from being in a corporate group with three other businesses, which allows the company to share administrative, legal and accounting functions. A smaller operation may not be able to so easily marshal the resources to meet all the demands of listing publicly.

Building up interest in your shares as a public company is not straightforward, either. You might think that if you sold out your initial public offering and were held by a group of investors enjoying healthy dividends that your job as a public company is done. But shares that do not change hands do not increase in value. “People tend to wait for somebody to do something first,” Mandin explains. “If they see a company that is doing a lot of trading, they have some interest. But if you are limited in your trading, they just move on to the next prospect.” Mandin estimates Wadley had over 100 meetings last year with various brokers and investors to drive interest in CERF. “I’ve had the luxury as COO to just focus on running the company,” he says. “I do not have worry about the bank because of Wayne and we have a CFO. The average smaller rental house, where you have a guy that has to deal with everything from the bank to pulling wrenches, would have trouble managing the extra time that would be required to be a public entity.”

Rightsizing the fleet for the shifting needs of his market is a challenge Mandin enjoys. Sometimes it leads to opportunity, as when 4-Way got into winter heat rental and it became its most popular offering.

Mandin manages 60 employees out of two buildings totalling 53,000 square feet. His wife, Denise, and son, Phillippe, work at 4-Way, too. Even with six acres of yard, space is sometimes an issue. One of the logistical challenges that keeps Mandin interested is how to manage the storage space. He points out that while rental operations want to empty their shelves the same way retail stores do, they have the additional challenge of having to bring all that inventory back in again sooner or later. 4-Way rents primarily to industrial and commercial construction contractors. There are very few homeowner rentals. This is reflected in his fleet, which tends toward the larger, heavier-duty equipment, such as 1,600 CFM compressors. Like many companies in western Canada, 4-Way has found it can keep the shelves empty through the winter with a focus on winter heat. “We wanted to find something to keep our winters busier,” Mandin remembers, “and what we were able to do over time was flip it on its head and now our winter/spring period is our busiest time.”

4-Way carries around 40 different kinds of heaters including electric, diesel, natural gas and propane-fuelled models, from small radiants right up to million-BTU units. Ground heating is huge, and 4-Way is the Edmonton dealer for Wacker ground heat products. “We bought the ground heaters because we have always dealt with Wacker, but primarily on the compaction side,” Mandin says. “When they got big time into generators, we grew with them and that became the bulk of our generator fleet. Then, when they purchased Ground Heaters and merged the two, they instantly became our largest supplier.”

Loaders, excavators and dumpers also are big movers for 4-Way. Mandin says material handling is the most important contributor to his bottom line, with equipment with up to 12,000 pounds of lift capacity. He estimates he carries over 4,300 pieces of equipment, all told. Bobcat is Mandin’s main line for skid steers and loaders. Drilling and breaking equipment comes from Hilti. Mandin admits Hilti’s prices can be higher, but its tool management program is so efficient it makes up for it. “You send a tool in, they do the repairs, they send it back, you put it on the shelf and you get it back out on rent,” he explains.

Doing business in the gold-rush atmosphere of northern Alberta has some unique challenges for rental operators, Mandin has found. With great opportunity has come great interest in the market and a number of rental houses seeking aggressive growth and market share. The competitive energy has paid off for customers, with rental operators forced to offer higher levels of service than elsewhere and find innovative ways to serve customers. Mandin offers the example of equipment delivery. “If you go to Saskatoon, they do not have a fraction of the trucks we have. The way their industry has evolved, most of the customers pick up stuff or they send it out on couriers. In Edmonton, back in the late ’60s, some wise guy got the idea to give free delivery. We’d like to find that guy or his ancestors and slap them around because we have never 100 per cent recovered from that.” Descendants of this nameless ’60s-era rental operator, beware!

Mandin has been a big believer in association involvement since his earliest days in rental. At first he just attended Canadian Rental Association meetings, then he got involved with some volunteering. Then longtime Alberta director Orrin Knapp pounced. “I kind of got railroaded, no, I mean I acted as president of the local for a couple years,” Mandin laughs. “Then I ended up on the board of directors at the national level.” Mandin got involved and stayed involved because he could see the tremendous benefits the association was bringing to his operation. The lending library made safety videos available that smaller rental houses otherwise would never have been able to afford, he says. Rental U was a big help in educating staff at a price 4-Way could afford before it became a big corporation. Mandin says it is amazing how willing association members are to share information about their businesses and experiences. Events like the American Rental Association’s Rental Show give him a chance to compare notes with operators from all over North America. While Mandin understands the impulse to keeps one’s cards close to the vest, he thinks independent rental operators have a lot more to gain from a free exchange of information and help. “There are some people who say there is no way they will re-rent to another company because they view that as supporting the competition,” Mandin says. “I love dealing with other rental houses. They are some of your easiest customers to deal with. We don’t own any boom lifts, but I probably have anywhere from six to 10 out on re-rent at any given time.”

Mandin’s first priority as national CRA president will be to get a new managing director up and running. He is looking for someone who can reach out to all rental operators, members and non-members alike, all across the country, in both languages. Mandin talks about the need to build up trust in the association and re-communicate the value it delivers to the rental industry. He’d like to see the CRA co-ordinate training in some underserved regions without actually becoming a trainer itself. Experience with larger associations, leadership and organizational abilities will be other qualities the board seeks.

“Everybody has great ideas,” Mandin says, “but you have to have the resources and you have to have the time. Anybody in the rental industry knows that time is gold.” Mandin is hoping that he can bring to bear his demonstrated abilities to turn time into gold at 4-Way on the CRA and make some positive changes in the association he loves.