October 7, 2024 • 37 mins
PREVIEW EPISODE 01
On this preview episode of the High Fire Podcast, delve into the significance of well-structured rental contracts. Discover how these contracts serve as guardrails to protect both companies and customers, ensuring clear responsibilities and avoiding potential pitfalls.
Join us as we welcome industry experts from three leading rental companies: Ware, Wabash Power, and Nationwide Boiler. Michael Feiler, Steve Taylor, and Jim Leskoven share their insights and experiences, highlighting the importance of rental contracts in the boiler industry.
Learn about the essential elements of rental contracts, from transportation and insurance to maintenance and startup procedures. Understand the common challenges faced during contract negotiations and how to overcome them for successful project execution.
Whether you're a purchasing agent or a facility manager, this episode provides valuable knowledge on navigating rental contracts, ensuring both parties are protected and aligned for a smooth rental experience.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
And I have conversations with purchasing agents all the time that,
look, this contract, if we go through it, it protects both of us and keeps both of us out of trouble.
Regardless of what happens with the contract, both of us stay out of trouble
by understanding and agreeing to these terms.
Everybody knows where we're at. To your point, guardrails.
And you know where you're at. Then there's not any question if there's an issue
(00:22):
comes up, we go back to the contract.
Everybody understands who's responsible for what.
On this episode of the High Fire Podcast, find out how well-structured rental
contracts act as guardrails, ensuring that both companies and customers are
protected and know their responsibilities.
(00:44):
Well, welcome to Denver, Colorado and Boiler 2024.
And we are on the High Fire Podcast that we do here at Ware and got a really cool segment today.
Probably never done in the industry before, but we have got three rental companies.
I'm Ware and then Wabash and the Nationwide Boiler.
(01:04):
And why don't we start, Michael, why don't you introduce yourself?
Sure. I'm Michael Feiler. I'm the president of Wabash Power.
I've been at Wabash for 18 years. And Richie, I've been in the boiler world
for 36 years. So my whole professional career.
Steve Taylor, director of sales with Ware. I've been at Ware for 42 years.
(01:26):
So that's about all I've done since I graduated from high school.
42. 42. Jim? Jim Leskoven. I'm the vice president of sales for Nationwide Boiler.
I've been with Nationwide for 10 years now, and I've been in the industry for 42 years.
So Wabash Power is headquartered in Chicago, Illinois. Of course,
we're in Louisville, Kentucky, and Nationwide's in Fremont, California.
(01:49):
And so a little bit different, obviously. You've got competitors sitting around
a table, and I have learned the business from these three guys.
You know, and of course, Larry Day and Jeff Shellcross and Jim Rafferty.
I mean, you know, Stephen obviously has taught me just a ton about the rental
business. It's incredible.
(02:10):
So special for me, obviously, to just have everybody in here.
But for our audience, I think something that's really...
A big topic that needs to be discussed and it's so important is just a rental contract.
You know, when our customers get that rental contract, it's just like,
oh my gosh, you know, and then they get it back to us and they're marking it
(02:34):
up saying, this is what we're going to accept, what we don't want to accept.
But it's in there for a reason.
Michael, why don't you start with why it's so important to have the rental contract?
Well, I think that rental contract actually is a good thing to talk about that
it's good for both parties.
Because many of our customers that are doing rentals think their purchase order covers everything.
(02:55):
And I think all three of our contracts are very similar that we reference ASME code.
We reference some of the things that are very important that give benefits not
only to us as a contract, but to the lessee.
It's specific for a boiler that's burning 100 million BTUs. that could be 750 PSI.
(03:17):
So what the lessee doesn't realize that there's a bunch of things in that contract
that's actually good for them.
So it's a much better situation of getting that boiler with that rental contract.
Than using their purchase order that may be used for a air compressor or a forklift.
It's just a good thing. So it's a good starting basis.
(03:40):
And I think that having these, it's kind of funny to call them boilerplates,
but boilerplate contract gives us a start where our rental companies understand what's in it.
And we can kind of guide that lessee through the process to make sure that something
they're paying a little bit of money for because they might have a problem or a turnaround.
(04:02):
And I think that contract really kind of gives us a basis to make that happen
pretty quickly rather than looking at a hundred different purchase orders that
aren't similar, we can start with a basis that I think makes it good for both parties.
I mean, there's just so much stuff that's in it, but there's nothing you can
really rent without a contract.
(04:23):
I mean, you know, you go to go to the rental car place and there's going to
be a contract. You know, you can't say, hey, I'm not going to sign that.
You know, you're not going to get a rental car.
So, Stephen, how about you? Just what you thought. One of the big misconceptions
of purchasing agents is that when you accept or they send their TNCs out with
their purchase order, that that is going to override the rental agreement.
(04:46):
And that's not the case. And so we have that conversation on just about every
project we do is that, hey, guys, you can send your TNCs in,
but the terms of my rental contract have to take precedent over your TNCs.
It just has to be that way.
And a lot of times that's a stickler. You have to go through and mark out and
(05:06):
they want to do a master service agreement.
Agreement and the master service agreement has to do with installation
and warranty on equipment and and and not
doing damage to the job site we're not even on
the job site till our technician gets there to start the boiler up so there's
just a lot of that stuff you have to take out of it and you got to really be
careful of the other big thing we run into is we we do a lot of re-rent so we're
(05:29):
re-rent to a contractor and he's renting it to his customer and we got to really
be hard on those guys and say, look,
protect yourself and take whatever we agree to,
make sure your customer agrees to the exact same thing to the letter,
because any phrase or word you let them take out can mean a great deal of liability
(05:52):
on your part that you're not covered on.
So you just got to be careful. Can you say that same thing?
We do. You're right, because if they don't copy over some of that language,
they create a liability for themselves, a real vulnerability.
And certainly the T's and C's are an important part of these contracts,
but the contract itself is important as well, because they often understand
(06:13):
that they're renting a boiler or a feed system or whatever it might be,
but they don't always understand what's not included with these contracts.
And by clarifying these terms up front, you give them a much smoother process
because, frankly, they call us because they've already got a problem. Right.
They don't need us creating another problem by not divulging the details of
(06:35):
the rental contract. Sure. Yeah.
One of the things that always comes up, I know, is consequential damages.
I mean, we talk about that all the time. And maybe Steve can start with that.
Yeah. Yeah, there's a lot of companies that want us to accept consequential
damages, and you just flat can't do it.
If you take a company that, let's say they're doing $10 million a day in production,
(06:55):
and your boiler goes down for whatever reason, blower motor goes out or gas
valve goes out, and that's going to happen. It's a mechanical piece of equipment.
Something at some point is going to fail. That's just the nature of it.
The rental company can't take on the responsibility for their lost production,
and they want you to take that on.
(07:16):
You just you flat can't do it if they're doing 10 million dollars a
day and he's down for 30 days there's your company you just
afford it jim can afford it michael can afford it we can't we're little boys
little little little guys we can't do that so you you've got to really be careful
and that's what i i push on the contractors all the time because they want to
just sign the contract that their customer sends them and it's got consequential
(07:36):
damages in it so guys you know one hiccup and they take your company you can't.
That risk, you've really got to be careful. And if that's open-ended in terms
of its liability, you're betting the company on a particular project and we can't do that.
Well, and the thing I think, Richie, a good point is the three of us,
we know how each one of these companies, because we're the largest players in
(07:59):
the industry, how we're going to react.
And some of the things that aren't really expressed with a purchasing agent
is if we do this correctly, it's going to make it easier on them.
So I know many times when you work with the purchasing agent,
they think we're taking it all our direction.
It comes from the experience that we have, that this is our main industry.
(08:21):
We know rental boilers better than anybody.
We know where the problems are. And if we can lead them through that contract,
it's beyond the damages portion.
It's beyond just the liability portion. And I agree with you,
Jim, that many times by discussing this contract and understanding what we're
trying to do, it sets boundaries immediately that makes the project successful.
(08:44):
And I think it goes even beyond, and I've said this about the contract.
The contract is more about succeeding with the project than anything.
Most of the time, they're coming from a point where they're needy and they're
in trouble or they've got a turnaround that they have to get completed on a timeframe. frame.
And by using something that we're familiar with, that we know works,
(09:08):
helps them succeed in their project because that contract is tested.
It's been used most of the time for years, and it gives them a boundary that
we can help them make that project succeed.
And that's what we're all about, right? We're all competitors,
but at the end of the day, the boilers we deliver or the deaerators or the water
(09:29):
softeners or the pumps have to work.
They're in a situation where we're
there delivering a piece of equipment that's got to work from day one.
They're not renting equipment because they didn't have a problem and they need
our equipment to be reliable.
And the way to do that is work within the boundaries of what that contract is.
So it's almost more than a contract.
(09:50):
It's kind of a promise of what we're going to do.
And that's how we look at it. And I have conversations with purchasing agents
all the time that, look, this contract, if we go through it,
it protects both of us. and keeps both of us out of trouble.
Regardless of what happens with the contract, both of us stay out of trouble
by understanding and agreeing to these terms.
(10:11):
Everybody knows where we're at, to your point, guardrails.
And you know where you're at. Then there's not any question if there's an issue
comes up, we go back to the contract, everybody understands who's responsible
for what. So you just have to go through all the details.
You're right, because I think we've all seen contracts and T's and C's that
are heavily weighted towards one party. And I think the terms and conditions
(10:31):
that we all use are really pretty, pretty balanced in terms of protecting both parties. Sure.
Because it is our objective to provide the customer with a good experience. Yeah, absolutely.
So the contract obviously covers on site, but this boiler has got to leave the
(10:51):
company and it's got to get to the site and it's got to get from the end user back to you.
So maybe talk a little bit about that.
Michael, start with the transportation side on that. Well, the transportation
scenario is, you know, we some have trucks, some don't. We all have trailers,
right? It's all underneath.
We all make sure that those trailers are inspected.
(11:12):
The real key to that whole transportation is risk of loss.
And I know on our side, we're willing to take risk of loss because we make sure
that it's a good carrier that takes the boiler from point A to point B.
So the important piece is if you want us to take risk of loss we can do that
piece the real key is what happens when it gets there understanding the responsibility of what.
(11:39):
The trucker will do and not do. They're not there to install the boiler and
they may not even be able to put that boiler in the spot you want it.
They may need other things with it. So it is very important.
And I've told them, we can beat your freight price. Sure.
You want to put a chicken hauler behind it that's got $25,000 worth of liability insurance.
(12:00):
And when they crash it over the guardrail, they throw you the keys of the truck,
then we're both in trouble.
So again, Again, I agree with you that that freight piece of it,
how it gets from our facility to yours is important.
And I think that we all, and I know we do, we all help them with that part of it.
And it's something back I would bring back to the contract again.
(12:22):
One of the things is the responsibility of the company.
We all know that there are a lot of people getting in the rental border business
that don't necessarily follow the things we do.
And I think freight and contracts, maintenance, all of those things are really,
really important important, uh, that I think you're talking about.
Yeah. There, there are certain things in the contract that, you know,
(12:42):
probably eight out of 10, you'll have something we'll negotiate.
Insurance to your point is one of them. Insurance, that's easy to take care of.
Even if the customer says, Hey, I don't want to handle the insurance of the
unit at all. I don't want to be insuring the unit.
We can take that on. We can charge them a fee for, to cover the unit,
regardless of what What happens to it? The unit's covered. We can take that on.
(13:04):
We don't like to, but if the customer's adamant about it, then we'll negotiate that.
It's part of the negotiation process of just different things that you can negotiate on.
Consequential damages, you know, if they're demanding that, you walk.
You just walk away from the job.
You know, I think over the years, when I look back on it, how many jobs we've
(13:25):
lost because of an inability to come to agreement on T's and C's. Um.
I think I'm pressed to find one job where we were not able to negotiate a reasonable
settlement with the end user.
Yeah. I can remember one where they absolutely demanded consequential damages
and one of our competitors would accept it. And so we walked. Yeah.
(13:49):
You're right. You just cannot. You cannot bet the company on a job. I have a few more.
I don't know if maybe if you're lying, but I would say that I have a few more
than a couple that we've said no to.
And I think one of the big things about our groups is none of these three companies
are willing not to say no.
(14:10):
And I really believe the ultimate goal is to make steam at that facility.
And the transparency of what we do as a process is really a big thing.
And I think, Richie, that's something that you're talking about here and why
this podcast is doing what we're doing, is that if we continue to have that
transparency all the way from contract to what the equipment is to what we can deliver,
(14:36):
when we can deliver it, and what they need to do at the site,
that transparency with all three companies,
Nationwide, Ware, and Wabak, is really important.
And I think that's kind of what you're getting with all of this,
right? It isn't just words on paper.
I always say it's really simple to work out the contract.
It's about delivering and actually telling the customer what to expect when it gets there.
(15:03):
And I think that's kind of what you were implying, Jim, all along. Yeah, absolutely.
You know, there's ways of getting around. We were talking about consequential
damages and just how big of an issue that is for us. But there are ways of getting around that.
If a customer really insists upon some level of protection,
then we can limit the consequential damages to or limit the damages to the value
(15:27):
of the contract or something like that that caps the potential damages and liability.
And in most cases, that seems to resonate with end users. Yeah.
Jim, I'm assuming, assuming I know that you have different people start your
own boilers. I know we have different people start our boilers that are not
necessarily part of our company.
(15:49):
How does the contract handle that? You're bringing in a contractor to do the startup for the unit.
Well, typically our subcontractors are covered within the language,
certainly within the indemnification language.
We talk about our subcontractors and that that is a distinct possibility.
(16:11):
I don't think it's ever been a problem. I think our customers realize that if
we make a decision collectively to send a startup person to the job site,
that they're qualified.
And we get very little questioning about that. Steven, what about when it's
not our decision and the customer picks the startup?
(16:31):
Yeah, those are tough ones. And probably 80% of our technical issues on a startup
on site is where the customer has chosen someone else to start the boiler up,
and they're not familiar with the equipment.
They're not familiar with you know the the the feed system setting up the the
(16:52):
temperature control valve the vfds on the pumps just all different things we
put in there they're not familiar with it and and five days into it they still
don't have steam and the customer is raising cane and they're they keep calling
us and and we've got a rule of thumb we don't start a boiler on the phone,
if if the technician is that to the point where we're having to tell him hey
you need to toggle this and do this.
(17:14):
We time out. Let's do something. We're not going to do that.
We can't start it over the phone.
And it is an issue. Most of the time, our technical issues are when we have
someone else or the customer has someone else.
And sometimes we can demand.
We just hard line. If it's a superheated unit, we're going to start it.
We're not going to let you start it up. We're just not.
(17:35):
And that's part of the negotiating process in the contract and let them understand
their Their expectation is where it's going to provide, Wabash can provide, Nationwide.
They're going to provide a startup tech on this piece of equipment because we
don't trust anybody else to do it, to be frank.
That's just the way it is. Yeah, we take a harder line.
We don't allow other people to pick startup.
So we're very, if we, and we don't do as many fire tube mobile steam plants as.
(18:02):
Where for sure, and I think nationwide also, most of ours are IWTs and distro
water tube boilers, and we have a big fleet of superheat.
We may agree, let's say, with somebody you brought to us from where we share
a lead and we can supply something.
We may agree to have your people do it, but Wabash gets to choose.
And it's because we're trying to do three things, and it's really important
(18:27):
to make sure that the safeties are checked.
And that's the most critical piece of this, right?
Combustion is usually all set up already, but what we're going to do at a startup
is we're going to make sure all the safeties work.
And that's critical to make sure a piece of equipment that's burning a hundred
million BTUs is not going to cause a, and we don't use the big E word,
we call it an incident, right?
(18:49):
And then we also want to duplicate combustion.
And we want to make sure that that boiler is efficient up and down.
And then the third piece is we want to make sure that the operators that are
taking ownership of that piece of equipment for the next 90 days,
a year, six months, whatever it is, feels comfortable operating that boiler.
And we know that the person is qualified to make sure that happens.
(19:12):
Because there's two pieces, right? I think Steve, you talked about it,
that it's really hard to get a good startup guy that can handle controls and
understands the process of making steam.
You may have a really good guy that can and handle an Allen Bradley system or a 353 Siemens system.
And they know how to set up the loop controller, but they have no idea why that
(19:33):
water level is jumping around because the feed water valve is not working properly
and they don't understand all of those processes.
So I think that the startup guy defined by what we call a startup guy is different
than what most end users are used to.
They're used to tuning the BMS or the combustion controls, but can't get the rest of that stuff.
(19:55):
And they may not know how to work on a pump, or they may not know how to work
on a water softener. And we really need the startup people.
So again, back on Wabash requires that we approve who's doing startup.
We're not going to let them know, pick the person.
Well, that makes good sense because we all take a great deal of effort and care
in preparing our equipment for these typically emergency situations,
(20:19):
the wrong startup guy can turn the best piece of equipment in the world into
something that doesn't resolve the customer's problems.
So we're not only protecting the customer, we're protecting our own individual brands.
And again, we don't do things because we just randomly choose to do things.
We do things because we've learned lessons over the years on how to provide
(20:41):
our customers with the best solution.
The other thing we run into, and when you go through the contract process and
go through the site process, explain to them what's going to happen.
You know, when my tech gets there, he's not going to get there and flip a switch and walk away.
The first thing he's going to do, he's going to tell you if you've got power
turned on, turn the power off, because I'm going to go through and check every
(21:02):
connection to make Make sure they're all tight.
This thing just traveled down the road 100 miles, 1,000 miles, whatever it did.
Things happen in vibration. We're going to check every connection to make sure it's tight.
Just things we walk through with the customer to let them know the first four
hours, you're not going to see a thing because all he's doing is checking things
to make sure everything is right. So you're not going to see anything happen. That's right.
(21:23):
And just setting those expectations is absolutely critical.
Go ahead. Which I think really speaks to another important part of our job,
which is often educating the customer because they may not know what all is
involved in preparing a rental boiler.
And we need to let them know. Which is a good segue in what I was going to next.
(21:44):
And that is when the boiler gets on site, what is the responsibility of the customer?
What should he or she be doing to immediately start protecting themselves with
the equipment getting to the site? what should they do? What should the customer do?
Definitely have the right installer, have all the drawing packets,
(22:06):
all the information that they need, typically good guidance from our,
companies to help them establish a winning strategy to connect this boiler.
Because again, a boiler that's connected wrong performs poorly.
Yeah, yeah. What about like just the The cleanliness. I mean,
you know, when it gets there, what should a customer do?
(22:29):
You say, hey, look at the boiler, you know, open it up, take pictures of it.
We recommend that as soon as it gets there, open it up, take pictures of everything,
water side and fire side.
When the job's over, do it again. And then, you know, before it ever comes back
to us, hey, we did a good job or, uh-oh, we added scale to this unit.
(22:50):
We're going to have a charge coming back to clean this thing back up because
it has to be returned in the same condition we received it, part of the contract negotiation.
Do you all have scale at all in your boilers come by?
That's another whole podcast for you. But I think, Rich, one of the things you
talked about is building this expectation from the lessee, from the lessor.
(23:14):
And many times there's the people are operating the boiler, the purchasing side and the manager side.
And I use an analogy very much.
The management believes it's a toaster oven and it comes in and you plug it
in the wall and automatically this thing just works.
It's important when that boiler gets there, what the expectations are.
(23:37):
And Steve, you brought up scale.
I think the contract and what you do, let's talk about the steps of what protects
us and protects the end user ultimately, right?
So we offer in all our contracts, come visit the boiler and inspect it before it leaves.
And we encourage, come look at it, right? And in most places,
(24:01):
it requires a third-party inspection by the state or by your insurance.
So there's a fire side and a water side, an additional inspection again.
And most places, water tube boilers and fire, they need to be hydro'd.
So there's a gasket change on the manway. So many times, I don't know about
you guys, but we ship it with a rubber gasket.
(24:22):
And you can hydro that boiler with that gasket, but you're forced to open that
up and change it again before it's run.
It's another step in the process to making
sure that that water side is clean that gives
them that whole feeling and it's something that nobody thinks about
and those are built in and they're going oh do i have to do this what we're
really building that piece in there is to really help both parties because we
(24:45):
want a boiler to come back in identical condition right we all none of us send
boilers with scale boilers don't make scale it's all about water and they say
what do do I need to do when it gets on site?
I tell them there's only three things you got to worry about when you rent a boiler.
You operate it, you maintain it, and you insure it. Those are the three.
And if you set that expectation up, it all is pretty simple.
(25:08):
The boiler comes to you clean, bring it back clean.
So all the process in between there, do what you do with a regular boiler and do what you with yours.
But as long as that expectation of management, the engineering people,
and purchasing comes together, and they all understand, it works.
And one of the things that we have difficulty with
(25:30):
and we we struggle on on a lot
of jobs especially with bigger companies because we've been
negotiating with the purchasing guy that's the only people we've been dealing with
is the purchasing guy they're in they may be in new york the jobs in texas or
jobs in maine wherever it's at they have so everything we've sent to him he's
kept on his on his desktop hasn't sent anything to job site so then we have
(25:52):
to find a job site contact and make sure this guy has all the drawings, all the information.
And you go through all that process again, because if you don't,
you're setting yourself and the customer up to fail.
I mean, it's just a process you have to go through to make sure everybody understands.
Exactly what they're getting, what the expectations are.
Yeah, very true. Because how often have you supplied a rental boiler to somebody
(26:15):
and you've asked them, why do you need the rental boiler? And they say,
because I've scaled up my boiler.
So obviously whatever they were doing, to protect their boiler is going to need
some modification to protect our boiler.
And so again, we're back to education, expectations, helping the customer to
understand what might have gone wrong with their permanent equipment so that
(26:38):
we can help the rental to be more successful.
Yeah. Michael, you said something about taking care of the boiler,
which is something that's so very important, obviously, but there's the boiler,
but then you you might have an auxiliary piece of equipment that you've provided.
And, you know, we've heard things like, well, but your water softener had problems.
Question, is that on the company that's rented the boiler or is that on the end user?
(27:07):
And again, I take it back to the three things.
You have to inspect the equipment and know that we as a group are giving you
equipment that works. And that's why we want to do startup.
So there's a proof in what we're doing because our startup people won't leave
until everything works perfectly.
So that's, we've now set an expectation and we're not leaving,
(27:30):
you know, I don't know how many customers you asked that they want a fixed number for startup.
And I said, it doesn't exist because
there's no way for us to imagine what your site's going to be like.
So I tell them to keep the startup guy as long as you want them.
It's training, it's all of those things.
And until you feel comfortable with that, I don't want you to have that guy
go. So it, again, I kind of take it where we're now building an expectation.
(27:55):
Here's where we are. And until we get that agreement, it becomes very, very difficult.
And then it comes down to the three things. Again, I said, you only need to
do three things when you rent a boiler, operate, maintain, and insure.
And if they ask the question, which is what I'm asking them to do,
when I say that it's, you're responsible for everything.
And once they get that, that it's just a piece of metal.
(28:18):
Water softener really doesn't soften any water.
It's the brine that you put in the water softener that works with it.
The boiler doesn't produce any scale. It's the water you put in it.
And if you, big question is, and we could talk a little bit about it, is logs, right?
How do we encourage these lessees to keep daily logs checking their water softeners,
(28:43):
making sure their deaerators work? I think that's kind of what you're asking about.
And that maintenance portion of that, operating it, you almost want to ask them,
what are you doing with your own boilers?
Exactly. And if they're not keeping logs there, I don't know about you guys,
I would much rather not rent a boiler if I knew it was going to come back scale.
There is no money in the world. I don't care if you're paying double.
(29:06):
We don't want a boiler to come back dirty.
So there's no reason to do any of that.
Agreed, Steve? I don't know. I agree. And, and, you know, yeah.
We have customers all the time ask us, so how can I tell if I'm scaling the
boiler? Well, you're doing your daily test. You're doing your TDS.
The quickest, easiest thing to track every day, all day long is stock temperature.
(29:30):
Absolutely. Check your stock temperature.
It's in the daily boiler log and look at it every week and say,
okay, my stock temperature was 453, 460, 471, 481.
Boys, y'all better be paying attention. You're doing something here that's not right.
It shouldn't climb like that. So be paying attention to it.
Because we all have a vested interest
to help our customers identify these things because to your points,
(29:53):
if a customer scales up a boiler, we have before and after pictures,
it's pretty easy to document the damage that occurred on site,
but nobody wins when you negotiate repair bills.
It's much better to make sure that the customer has a good plan,
understand their responsibilities or expectations, and avoid these unnecessary damages.
(30:15):
Yeah. And the whole reason they had the boiler there is because something happened
with theirs. They needed steam.
So if we didn't set the expectations and give them guidelines of what to check,
we haven't done our job either because now they've got a boiler that's failed
because they didn't take care of the water treatment because we didn't educate
them properly or we didn't talk to the right people on the front end.
So we both messed the job up and that's not what we're after.
(30:38):
We've got to get them steam and keep them steam. There's a lot more to renting
boilers than delivering equipment.
Absolutely. That's the easy part. Yeah. That is the easy part. Yep. Yeah.
Any other things that the customers come back on the contract and said,
I don't wanna do that. Was there any other things we haven't.
(30:59):
What I hear a lot, because sometimes we'll send out our rental contract and our terms.
They come back with a PO with another set of terms. And of course,
the last set of terms in prevails.
So you're negotiating and they'll say things like, that's never going to happen.
Don't worry about that language.
(31:19):
This language is designed for situations that we don't expect.
And if it's in the contract, if it's in the T's and C's, we're bound by it.
So we do have to be very careful with making sure that there's nothing in there
that exposes either party to excessive liability.
Anything else that you see the customer do?
(31:40):
Well, one of the things we laugh in our contract, and I won't say what percentage
it is, but past due bills, we have an interest rate.
And I can tell you, right, in my 25 years of doing it, I think the last 24 months,
I've had more lessees argue about the interest rate.
(32:00):
And I say, if you're willing to pay your bills, you should never even worry
about the clause in this contract.
Well, they say they pay their bills every time. And I said, well,
then just gloss right over this because you'll never have to pay that bill with
interest because you're going to do it.
And I explained to them that the reason that's there is just for instance,
(32:20):
that you're our ERP system and we're all talking about payment stuff.
They're sending that to India and other places and they don't pay their bill.
Well, you're going to get charged interest. And they said, well, that's excessive.
What I'm sharing many times is some of these penalties we have in there are
excessive on purpose because we want people, when they don't do something, to notice it.
(32:46):
And if it's not a big hammer and you say it will never happen and it sounds
hard and harsh, it's really to help both parties.
Because the end users, the people who are renting our equipment,
they want to pay their bills. Yeah.
That is more for, as you said, Jim, you know, the stuff they send will never happen.
Okay. Well, if it'll never happen, then don't worry about it,
(33:08):
what it is. Yeah. And there's two reasons to have that interest payment in there.
One, it's a deterrent. Correct. They don't want to pay that.
The other thing is they ask, well, it doesn't cost you to carry that money. No.
What it costs me is for my credit manager to call me and take time out of his
day and my day, and then we're calling you.
So we're spending a bunch of time that we should be doing and other things,
(33:30):
but now we'll have to call you, take time out of our day.
That has to be compensated. We have to be compensated for that time somehow.
So that's what that's in there for. That's right.
And Michael, to your point, if you pay your bills on time, it never happens.
It's meaningless. It is exactly meaningless.
And it kind of does first circle.
Back to the contract stuff and all of this stuff. And it's something we really
(33:53):
push hard, really push hard every day, is what are your expectations for us?
And so one of the things I'm really big on, you know, the purchasing agent gets
it and they think it's a commodity. I'm going to go get a boiler.
And they don't have a clue that they need, they'd like an economizer,
an SCR, or they need a water softener.
(34:15):
So it becomes a commodity item to them. And we all ask solution-driven questions.
We're asking questions to pull out as much information from that person as we
can, which allows us to give them a good solution.
And what it all comes down to, forget all the paperwork, and we can work the contracts out.
(34:36):
I know the three companies that are here, we're all solution driven.
It isn't renting boilers at that point. And we forget all about the metal.
It's all about renting a solution that's going
to deliver the right amount of steam for their
given project because what happens if it's
a batch load where they only need it for an hour and
(34:58):
then they shut it off if we don't ask those questions we give them the wrong
boiler and they fail that boiler right um so it's kind of funny i always tell
people you're really not selling the steak you're selling the sizzle you're
really selling that solution or renting that solution to the lessee,
and it's all that process and the pain that we're asking those questions.
(35:22):
That purchasing agent wants to get a number. How many times have we all heard,
just send me a darn quote?
Just send me a quote. Just send me a quote. I don't want to send you a quote.
I need to ask these questions or we're going to fail.
Do you want us to fail? And that's a question. And then I shut up.
That's hard for me. Yeah, yeah, yeah.
It's a difficult thing. But what
(35:43):
you need to do is say, do you want a solution or do you want a boiler?
Because until we understand their needs, we really cannot tailor a solution to them. You cannot.
No. And you will get them to your point. You'll get purchasing agents that say,
hey, you're not talking to the facilities manager. You're not talking to the maintenance engineer.
All you're going to do is talk to me. I want a proposal. This is what I said I needed.
(36:04):
I want a proposal based on that. And sometimes you're forced to say,
I'm going to either give them a quote or I'm going to back away from the job.
We don't give them a quote. Yeah. I can tell you, we don't quote them.
Because the person agent said, this is all I'm going to give you.
You're not talking to anybody else in the plant. So send me a quota or I'm going to go to somebody else.
(36:26):
Well, we understand that's setting the project up for failure.
That's right. It is. We understand.
None of us want failures. That's right. None of us want failures. No, not at all.
Well, this has been pretty good. It has been. Really good. I enjoyed hanging
out and talking with you guys. And we didn't violate the antitrust thing, which is great.
We made it through. Perfect. And we're really not bad guys.
Maybe had some contract stuff, but it's truly there for protection of you as
(36:51):
the customer, but also protection of ourselves and the businesses that we have
and the equipment that we have, the investments that we make.
It's very, very important to make sure that the contracts are always going through
signed contract before it leaves.
So very important as well. So really appreciate you guys hanging out with us.
Thank you. And thanks for coming by.
(37:13):
We'll see you next time on the Hot Fire Podcast.
Music.
And I have conversations with purchasing agents all the time that,
look, this contract, if we go through it, it protects both of us and keeps both of us out of trouble.
Regardless of what happens with the contract, both of us stay out of trouble
by understanding and agreeing to these terms.
Everybody knows where we're at. To your point, guardrails.
And you know where you're at. Then there's not any question if there's an issue
(00:22):
comes up, we go back to the contract.
Everybody understands who's responsible for what.
On this episode of the High Fire Podcast, find out how well-structured rental
contracts act as guardrails, ensuring that both companies and customers are
protected and know their responsibilities.
(00:44):
Well, welcome to Denver, Colorado and Boiler 2024.
And we are on the High Fire Podcast that we do here at Ware and got a really cool segment today.
Probably never done in the industry before, but we have got three rental companies.
I'm Ware and then Wabash and the Nationwide Boiler.
(01:04):
And why don't we start, Michael, why don't you introduce yourself?
Sure. I'm Michael Feiler. I'm the president of Wabash Power.
I've been at Wabash for 18 years. And Richie, I've been in the boiler world
for 36 years. So my whole professional career.
Steve Taylor, director of sales with Ware. I've been at Ware for 42 years.
(01:26):
So that's about all I've done since I graduated from high school.
42. 42. Jim? Jim Leskoven. I'm the vice president of sales for Nationwide Boiler.
I've been with Nationwide for 10 years now, and I've been in the industry for 42 years.
So Wabash Power is headquartered in Chicago, Illinois. Of course,
we're in Louisville, Kentucky, and Nationwide's in Fremont, California.
(01:49):
And so a little bit different, obviously. You've got competitors sitting around
a table, and I have learned the business from these three guys.
You know, and of course, Larry Day and Jeff Shellcross and Jim Rafferty.
I mean, you know, Stephen obviously has taught me just a ton about the rental
business. It's incredible.
(02:10):
So special for me, obviously, to just have everybody in here.
But for our audience, I think something that's really...
A big topic that needs to be discussed and it's so important is just a rental contract.
You know, when our customers get that rental contract, it's just like,
oh my gosh, you know, and then they get it back to us and they're marking it
(02:34):
up saying, this is what we're going to accept, what we don't want to accept.
But it's in there for a reason.
Michael, why don't you start with why it's so important to have the rental contract?
Well, I think that rental contract actually is a good thing to talk about that
it's good for both parties.
Because many of our customers that are doing rentals think their purchase order covers everything.
(02:55):
And I think all three of our contracts are very similar that we reference ASME code.
We reference some of the things that are very important that give benefits not
only to us as a contract, but to the lessee.
It's specific for a boiler that's burning 100 million BTUs. that could be 750 PSI.
(03:17):
So what the lessee doesn't realize that there's a bunch of things in that contract
that's actually good for them.
So it's a much better situation of getting that boiler with that rental contract.
Than using their purchase order that may be used for a air compressor or a forklift.
It's just a good thing. So it's a good starting basis.
(03:40):
And I think that having these, it's kind of funny to call them boilerplates,
but boilerplate contract gives us a start where our rental companies understand what's in it.
And we can kind of guide that lessee through the process to make sure that something
they're paying a little bit of money for because they might have a problem or a turnaround.
(04:02):
And I think that contract really kind of gives us a basis to make that happen
pretty quickly rather than looking at a hundred different purchase orders that
aren't similar, we can start with a basis that I think makes it good for both parties.
I mean, there's just so much stuff that's in it, but there's nothing you can
really rent without a contract.
(04:23):
I mean, you know, you go to go to the rental car place and there's going to
be a contract. You know, you can't say, hey, I'm not going to sign that.
You know, you're not going to get a rental car.
So, Stephen, how about you? Just what you thought. One of the big misconceptions
of purchasing agents is that when you accept or they send their TNCs out with
their purchase order, that that is going to override the rental agreement.
(04:46):
And that's not the case. And so we have that conversation on just about every
project we do is that, hey, guys, you can send your TNCs in,
but the terms of my rental contract have to take precedent over your TNCs.
It just has to be that way.
And a lot of times that's a stickler. You have to go through and mark out and
(05:06):
they want to do a master service agreement.
Agreement and the master service agreement has to do with installation
and warranty on equipment and and and not
doing damage to the job site we're not even on
the job site till our technician gets there to start the boiler up so there's
just a lot of that stuff you have to take out of it and you got to really be
careful of the other big thing we run into is we we do a lot of re-rent so we're
(05:29):
re-rent to a contractor and he's renting it to his customer and we got to really
be hard on those guys and say, look,
protect yourself and take whatever we agree to,
make sure your customer agrees to the exact same thing to the letter,
because any phrase or word you let them take out can mean a great deal of liability
(05:52):
on your part that you're not covered on.
So you just got to be careful. Can you say that same thing?
We do. You're right, because if they don't copy over some of that language,
they create a liability for themselves, a real vulnerability.
And certainly the T's and C's are an important part of these contracts,
but the contract itself is important as well, because they often understand
(06:13):
that they're renting a boiler or a feed system or whatever it might be,
but they don't always understand what's not included with these contracts.
And by clarifying these terms up front, you give them a much smoother process
because, frankly, they call us because they've already got a problem. Right.
They don't need us creating another problem by not divulging the details of
(06:35):
the rental contract. Sure. Yeah.
One of the things that always comes up, I know, is consequential damages.
I mean, we talk about that all the time. And maybe Steve can start with that.
Yeah. Yeah, there's a lot of companies that want us to accept consequential
damages, and you just flat can't do it.
If you take a company that, let's say they're doing $10 million a day in production,
(06:55):
and your boiler goes down for whatever reason, blower motor goes out or gas
valve goes out, and that's going to happen. It's a mechanical piece of equipment.
Something at some point is going to fail. That's just the nature of it.
The rental company can't take on the responsibility for their lost production,
and they want you to take that on.
(07:16):
You just you flat can't do it if they're doing 10 million dollars a
day and he's down for 30 days there's your company you just
afford it jim can afford it michael can afford it we can't we're little boys
little little little guys we can't do that so you you've got to really be careful
and that's what i i push on the contractors all the time because they want to
just sign the contract that their customer sends them and it's got consequential
(07:36):
damages in it so guys you know one hiccup and they take your company you can't.
That risk, you've really got to be careful. And if that's open-ended in terms
of its liability, you're betting the company on a particular project and we can't do that.
Well, and the thing I think, Richie, a good point is the three of us,
we know how each one of these companies, because we're the largest players in
(07:59):
the industry, how we're going to react.
And some of the things that aren't really expressed with a purchasing agent
is if we do this correctly, it's going to make it easier on them.
So I know many times when you work with the purchasing agent,
they think we're taking it all our direction.
It comes from the experience that we have, that this is our main industry.
(08:21):
We know rental boilers better than anybody.
We know where the problems are. And if we can lead them through that contract,
it's beyond the damages portion.
It's beyond just the liability portion. And I agree with you,
Jim, that many times by discussing this contract and understanding what we're
trying to do, it sets boundaries immediately that makes the project successful.
(08:44):
And I think it goes even beyond, and I've said this about the contract.
The contract is more about succeeding with the project than anything.
Most of the time, they're coming from a point where they're needy and they're
in trouble or they've got a turnaround that they have to get completed on a timeframe. frame.
And by using something that we're familiar with, that we know works,
(09:08):
helps them succeed in their project because that contract is tested.
It's been used most of the time for years, and it gives them a boundary that
we can help them make that project succeed.
And that's what we're all about, right? We're all competitors,
but at the end of the day, the boilers we deliver or the deaerators or the water
(09:29):
softeners or the pumps have to work.
They're in a situation where we're
there delivering a piece of equipment that's got to work from day one.
They're not renting equipment because they didn't have a problem and they need
our equipment to be reliable.
And the way to do that is work within the boundaries of what that contract is.
So it's almost more than a contract.
(09:50):
It's kind of a promise of what we're going to do.
And that's how we look at it. And I have conversations with purchasing agents
all the time that, look, this contract, if we go through it,
it protects both of us. and keeps both of us out of trouble.
Regardless of what happens with the contract, both of us stay out of trouble
by understanding and agreeing to these terms.
(10:11):
Everybody knows where we're at, to your point, guardrails.
And you know where you're at. Then there's not any question if there's an issue
comes up, we go back to the contract, everybody understands who's responsible
for what. So you just have to go through all the details.
You're right, because I think we've all seen contracts and T's and C's that
are heavily weighted towards one party. And I think the terms and conditions
(10:31):
that we all use are really pretty, pretty balanced in terms of protecting both parties. Sure.
Because it is our objective to provide the customer with a good experience. Yeah, absolutely.
So the contract obviously covers on site, but this boiler has got to leave the
(10:51):
company and it's got to get to the site and it's got to get from the end user back to you.
So maybe talk a little bit about that.
Michael, start with the transportation side on that. Well, the transportation
scenario is, you know, we some have trucks, some don't. We all have trailers,
right? It's all underneath.
We all make sure that those trailers are inspected.
(11:12):
The real key to that whole transportation is risk of loss.
And I know on our side, we're willing to take risk of loss because we make sure
that it's a good carrier that takes the boiler from point A to point B.
So the important piece is if you want us to take risk of loss we can do that
piece the real key is what happens when it gets there understanding the responsibility of what.
(11:39):
The trucker will do and not do. They're not there to install the boiler and
they may not even be able to put that boiler in the spot you want it.
They may need other things with it. So it is very important.
And I've told them, we can beat your freight price. Sure.
You want to put a chicken hauler behind it that's got $25,000 worth of liability insurance.
(12:00):
And when they crash it over the guardrail, they throw you the keys of the truck,
then we're both in trouble.
So again, Again, I agree with you that that freight piece of it,
how it gets from our facility to yours is important.
And I think that we all, and I know we do, we all help them with that part of it.
And it's something back I would bring back to the contract again.
(12:22):
One of the things is the responsibility of the company.
We all know that there are a lot of people getting in the rental border business
that don't necessarily follow the things we do.
And I think freight and contracts, maintenance, all of those things are really,
really important important, uh, that I think you're talking about.
Yeah. There, there are certain things in the contract that, you know,
(12:42):
probably eight out of 10, you'll have something we'll negotiate.
Insurance to your point is one of them. Insurance, that's easy to take care of.
Even if the customer says, Hey, I don't want to handle the insurance of the
unit at all. I don't want to be insuring the unit.
We can take that on. We can charge them a fee for, to cover the unit,
regardless of what What happens to it? The unit's covered. We can take that on.
(13:04):
We don't like to, but if the customer's adamant about it, then we'll negotiate that.
It's part of the negotiation process of just different things that you can negotiate on.
Consequential damages, you know, if they're demanding that, you walk.
You just walk away from the job.
You know, I think over the years, when I look back on it, how many jobs we've
(13:25):
lost because of an inability to come to agreement on T's and C's. Um.
I think I'm pressed to find one job where we were not able to negotiate a reasonable
settlement with the end user.
Yeah. I can remember one where they absolutely demanded consequential damages
and one of our competitors would accept it. And so we walked. Yeah.
(13:49):
You're right. You just cannot. You cannot bet the company on a job. I have a few more.
I don't know if maybe if you're lying, but I would say that I have a few more
than a couple that we've said no to.
And I think one of the big things about our groups is none of these three companies
are willing not to say no.
(14:10):
And I really believe the ultimate goal is to make steam at that facility.
And the transparency of what we do as a process is really a big thing.
And I think, Richie, that's something that you're talking about here and why
this podcast is doing what we're doing, is that if we continue to have that
transparency all the way from contract to what the equipment is to what we can deliver,
(14:36):
when we can deliver it, and what they need to do at the site,
that transparency with all three companies,
Nationwide, Ware, and Wabak, is really important.
And I think that's kind of what you're getting with all of this,
right? It isn't just words on paper.
I always say it's really simple to work out the contract.
It's about delivering and actually telling the customer what to expect when it gets there.
(15:03):
And I think that's kind of what you were implying, Jim, all along. Yeah, absolutely.
You know, there's ways of getting around. We were talking about consequential
damages and just how big of an issue that is for us. But there are ways of getting around that.
If a customer really insists upon some level of protection,
then we can limit the consequential damages to or limit the damages to the value
(15:27):
of the contract or something like that that caps the potential damages and liability.
And in most cases, that seems to resonate with end users. Yeah.
Jim, I'm assuming, assuming I know that you have different people start your
own boilers. I know we have different people start our boilers that are not
necessarily part of our company.
(15:49):
How does the contract handle that? You're bringing in a contractor to do the startup for the unit.
Well, typically our subcontractors are covered within the language,
certainly within the indemnification language.
We talk about our subcontractors and that that is a distinct possibility.
(16:11):
I don't think it's ever been a problem. I think our customers realize that if
we make a decision collectively to send a startup person to the job site,
that they're qualified.
And we get very little questioning about that. Steven, what about when it's
not our decision and the customer picks the startup?
(16:31):
Yeah, those are tough ones. And probably 80% of our technical issues on a startup
on site is where the customer has chosen someone else to start the boiler up,
and they're not familiar with the equipment.
They're not familiar with you know the the the feed system setting up the the
(16:52):
temperature control valve the vfds on the pumps just all different things we
put in there they're not familiar with it and and five days into it they still
don't have steam and the customer is raising cane and they're they keep calling
us and and we've got a rule of thumb we don't start a boiler on the phone,
if if the technician is that to the point where we're having to tell him hey
you need to toggle this and do this.
(17:14):
We time out. Let's do something. We're not going to do that.
We can't start it over the phone.
And it is an issue. Most of the time, our technical issues are when we have
someone else or the customer has someone else.
And sometimes we can demand.
We just hard line. If it's a superheated unit, we're going to start it.
We're not going to let you start it up. We're just not.
(17:35):
And that's part of the negotiating process in the contract and let them understand
their Their expectation is where it's going to provide, Wabash can provide, Nationwide.
They're going to provide a startup tech on this piece of equipment because we
don't trust anybody else to do it, to be frank.
That's just the way it is. Yeah, we take a harder line.
We don't allow other people to pick startup.
So we're very, if we, and we don't do as many fire tube mobile steam plants as.
(18:02):
Where for sure, and I think nationwide also, most of ours are IWTs and distro
water tube boilers, and we have a big fleet of superheat.
We may agree, let's say, with somebody you brought to us from where we share
a lead and we can supply something.
We may agree to have your people do it, but Wabash gets to choose.
And it's because we're trying to do three things, and it's really important
(18:27):
to make sure that the safeties are checked.
And that's the most critical piece of this, right?
Combustion is usually all set up already, but what we're going to do at a startup
is we're going to make sure all the safeties work.
And that's critical to make sure a piece of equipment that's burning a hundred
million BTUs is not going to cause a, and we don't use the big E word,
we call it an incident, right?
(18:49):
And then we also want to duplicate combustion.
And we want to make sure that that boiler is efficient up and down.
And then the third piece is we want to make sure that the operators that are
taking ownership of that piece of equipment for the next 90 days,
a year, six months, whatever it is, feels comfortable operating that boiler.
And we know that the person is qualified to make sure that happens.
(19:12):
Because there's two pieces, right? I think Steve, you talked about it,
that it's really hard to get a good startup guy that can handle controls and
understands the process of making steam.
You may have a really good guy that can and handle an Allen Bradley system or a 353 Siemens system.
And they know how to set up the loop controller, but they have no idea why that
(19:33):
water level is jumping around because the feed water valve is not working properly
and they don't understand all of those processes.
So I think that the startup guy defined by what we call a startup guy is different
than what most end users are used to.
They're used to tuning the BMS or the combustion controls, but can't get the rest of that stuff.
(19:55):
And they may not know how to work on a pump, or they may not know how to work
on a water softener. And we really need the startup people.
So again, back on Wabash requires that we approve who's doing startup.
We're not going to let them know, pick the person.
Well, that makes good sense because we all take a great deal of effort and care
in preparing our equipment for these typically emergency situations,
(20:19):
the wrong startup guy can turn the best piece of equipment in the world into
something that doesn't resolve the customer's problems.
So we're not only protecting the customer, we're protecting our own individual brands.
And again, we don't do things because we just randomly choose to do things.
We do things because we've learned lessons over the years on how to provide
(20:41):
our customers with the best solution.
The other thing we run into, and when you go through the contract process and
go through the site process, explain to them what's going to happen.
You know, when my tech gets there, he's not going to get there and flip a switch and walk away.
The first thing he's going to do, he's going to tell you if you've got power
turned on, turn the power off, because I'm going to go through and check every
(21:02):
connection to make Make sure they're all tight.
This thing just traveled down the road 100 miles, 1,000 miles, whatever it did.
Things happen in vibration. We're going to check every connection to make sure it's tight.
Just things we walk through with the customer to let them know the first four
hours, you're not going to see a thing because all he's doing is checking things
to make sure everything is right. So you're not going to see anything happen. That's right.
(21:23):
And just setting those expectations is absolutely critical.
Go ahead. Which I think really speaks to another important part of our job,
which is often educating the customer because they may not know what all is
involved in preparing a rental boiler.
And we need to let them know. Which is a good segue in what I was going to next.
(21:44):
And that is when the boiler gets on site, what is the responsibility of the customer?
What should he or she be doing to immediately start protecting themselves with
the equipment getting to the site? what should they do? What should the customer do?
Definitely have the right installer, have all the drawing packets,
(22:06):
all the information that they need, typically good guidance from our,
companies to help them establish a winning strategy to connect this boiler.
Because again, a boiler that's connected wrong performs poorly.
Yeah, yeah. What about like just the The cleanliness. I mean,
you know, when it gets there, what should a customer do?
(22:29):
You say, hey, look at the boiler, you know, open it up, take pictures of it.
We recommend that as soon as it gets there, open it up, take pictures of everything,
water side and fire side.
When the job's over, do it again. And then, you know, before it ever comes back
to us, hey, we did a good job or, uh-oh, we added scale to this unit.
(22:50):
We're going to have a charge coming back to clean this thing back up because
it has to be returned in the same condition we received it, part of the contract negotiation.
Do you all have scale at all in your boilers come by?
That's another whole podcast for you. But I think, Rich, one of the things you
talked about is building this expectation from the lessee, from the lessor.
(23:14):
And many times there's the people are operating the boiler, the purchasing side and the manager side.
And I use an analogy very much.
The management believes it's a toaster oven and it comes in and you plug it
in the wall and automatically this thing just works.
It's important when that boiler gets there, what the expectations are.
(23:37):
And Steve, you brought up scale.
I think the contract and what you do, let's talk about the steps of what protects
us and protects the end user ultimately, right?
So we offer in all our contracts, come visit the boiler and inspect it before it leaves.
And we encourage, come look at it, right? And in most places,
(24:01):
it requires a third-party inspection by the state or by your insurance.
So there's a fire side and a water side, an additional inspection again.
And most places, water tube boilers and fire, they need to be hydro'd.
So there's a gasket change on the manway. So many times, I don't know about
you guys, but we ship it with a rubber gasket.
(24:22):
And you can hydro that boiler with that gasket, but you're forced to open that
up and change it again before it's run.
It's another step in the process to making
sure that that water side is clean that gives
them that whole feeling and it's something that nobody thinks about
and those are built in and they're going oh do i have to do this what we're
really building that piece in there is to really help both parties because we
(24:45):
want a boiler to come back in identical condition right we all none of us send
boilers with scale boilers don't make scale it's all about water and they say
what do do I need to do when it gets on site?
I tell them there's only three things you got to worry about when you rent a boiler.
You operate it, you maintain it, and you insure it. Those are the three.
And if you set that expectation up, it all is pretty simple.
(25:08):
The boiler comes to you clean, bring it back clean.
So all the process in between there, do what you do with a regular boiler and do what you with yours.
But as long as that expectation of management, the engineering people,
and purchasing comes together, and they all understand, it works.
And one of the things that we have difficulty with
(25:30):
and we we struggle on on a lot
of jobs especially with bigger companies because we've been
negotiating with the purchasing guy that's the only people we've been dealing with
is the purchasing guy they're in they may be in new york the jobs in texas or
jobs in maine wherever it's at they have so everything we've sent to him he's
kept on his on his desktop hasn't sent anything to job site so then we have
(25:52):
to find a job site contact and make sure this guy has all the drawings, all the information.
And you go through all that process again, because if you don't,
you're setting yourself and the customer up to fail.
I mean, it's just a process you have to go through to make sure everybody understands.
Exactly what they're getting, what the expectations are.
Yeah, very true. Because how often have you supplied a rental boiler to somebody
(26:15):
and you've asked them, why do you need the rental boiler? And they say,
because I've scaled up my boiler.
So obviously whatever they were doing, to protect their boiler is going to need
some modification to protect our boiler.
And so again, we're back to education, expectations, helping the customer to
understand what might have gone wrong with their permanent equipment so that
(26:38):
we can help the rental to be more successful.
Yeah. Michael, you said something about taking care of the boiler,
which is something that's so very important, obviously, but there's the boiler,
but then you you might have an auxiliary piece of equipment that you've provided.
And, you know, we've heard things like, well, but your water softener had problems.
Question, is that on the company that's rented the boiler or is that on the end user?
(27:07):
And again, I take it back to the three things.
You have to inspect the equipment and know that we as a group are giving you
equipment that works. And that's why we want to do startup.
So there's a proof in what we're doing because our startup people won't leave
until everything works perfectly.
So that's, we've now set an expectation and we're not leaving,
(27:30):
you know, I don't know how many customers you asked that they want a fixed number for startup.
And I said, it doesn't exist because
there's no way for us to imagine what your site's going to be like.
So I tell them to keep the startup guy as long as you want them.
It's training, it's all of those things.
And until you feel comfortable with that, I don't want you to have that guy
go. So it, again, I kind of take it where we're now building an expectation.
(27:55):
Here's where we are. And until we get that agreement, it becomes very, very difficult.
And then it comes down to the three things. Again, I said, you only need to
do three things when you rent a boiler, operate, maintain, and insure.
And if they ask the question, which is what I'm asking them to do,
when I say that it's, you're responsible for everything.
And once they get that, that it's just a piece of metal.
(28:18):
Water softener really doesn't soften any water.
It's the brine that you put in the water softener that works with it.
The boiler doesn't produce any scale. It's the water you put in it.
And if you, big question is, and we could talk a little bit about it, is logs, right?
How do we encourage these lessees to keep daily logs checking their water softeners,
(28:43):
making sure their deaerators work? I think that's kind of what you're asking about.
And that maintenance portion of that, operating it, you almost want to ask them,
what are you doing with your own boilers?
Exactly. And if they're not keeping logs there, I don't know about you guys,
I would much rather not rent a boiler if I knew it was going to come back scale.
There is no money in the world. I don't care if you're paying double.
(29:06):
We don't want a boiler to come back dirty.
So there's no reason to do any of that.
Agreed, Steve? I don't know. I agree. And, and, you know, yeah.
We have customers all the time ask us, so how can I tell if I'm scaling the
boiler? Well, you're doing your daily test. You're doing your TDS.
The quickest, easiest thing to track every day, all day long is stock temperature.
(29:30):
Absolutely. Check your stock temperature.
It's in the daily boiler log and look at it every week and say,
okay, my stock temperature was 453, 460, 471, 481.
Boys, y'all better be paying attention. You're doing something here that's not right.
It shouldn't climb like that. So be paying attention to it.
Because we all have a vested interest
to help our customers identify these things because to your points,
(29:53):
if a customer scales up a boiler, we have before and after pictures,
it's pretty easy to document the damage that occurred on site,
but nobody wins when you negotiate repair bills.
It's much better to make sure that the customer has a good plan,
understand their responsibilities or expectations, and avoid these unnecessary damages.
(30:15):
Yeah. And the whole reason they had the boiler there is because something happened
with theirs. They needed steam.
So if we didn't set the expectations and give them guidelines of what to check,
we haven't done our job either because now they've got a boiler that's failed
because they didn't take care of the water treatment because we didn't educate
them properly or we didn't talk to the right people on the front end.
So we both messed the job up and that's not what we're after.
(30:38):
We've got to get them steam and keep them steam. There's a lot more to renting
boilers than delivering equipment.
Absolutely. That's the easy part. Yeah. That is the easy part. Yep. Yeah.
Any other things that the customers come back on the contract and said,
I don't wanna do that. Was there any other things we haven't.
(30:59):
What I hear a lot, because sometimes we'll send out our rental contract and our terms.
They come back with a PO with another set of terms. And of course,
the last set of terms in prevails.
So you're negotiating and they'll say things like, that's never going to happen.
Don't worry about that language.
(31:19):
This language is designed for situations that we don't expect.
And if it's in the contract, if it's in the T's and C's, we're bound by it.
So we do have to be very careful with making sure that there's nothing in there
that exposes either party to excessive liability.
Anything else that you see the customer do?
(31:40):
Well, one of the things we laugh in our contract, and I won't say what percentage
it is, but past due bills, we have an interest rate.
And I can tell you, right, in my 25 years of doing it, I think the last 24 months,
I've had more lessees argue about the interest rate.
(32:00):
And I say, if you're willing to pay your bills, you should never even worry
about the clause in this contract.
Well, they say they pay their bills every time. And I said, well,
then just gloss right over this because you'll never have to pay that bill with
interest because you're going to do it.
And I explained to them that the reason that's there is just for instance,
(32:20):
that you're our ERP system and we're all talking about payment stuff.
They're sending that to India and other places and they don't pay their bill.
Well, you're going to get charged interest. And they said, well, that's excessive.
What I'm sharing many times is some of these penalties we have in there are
excessive on purpose because we want people, when they don't do something, to notice it.
(32:46):
And if it's not a big hammer and you say it will never happen and it sounds
hard and harsh, it's really to help both parties.
Because the end users, the people who are renting our equipment,
they want to pay their bills. Yeah.
That is more for, as you said, Jim, you know, the stuff they send will never happen.
Okay. Well, if it'll never happen, then don't worry about it,
(33:08):
what it is. Yeah. And there's two reasons to have that interest payment in there.
One, it's a deterrent. Correct. They don't want to pay that.
The other thing is they ask, well, it doesn't cost you to carry that money. No.
What it costs me is for my credit manager to call me and take time out of his
day and my day, and then we're calling you.
So we're spending a bunch of time that we should be doing and other things,
(33:30):
but now we'll have to call you, take time out of our day.
That has to be compensated. We have to be compensated for that time somehow.
So that's what that's in there for. That's right.
And Michael, to your point, if you pay your bills on time, it never happens.
It's meaningless. It is exactly meaningless.
And it kind of does first circle.
Back to the contract stuff and all of this stuff. And it's something we really
(33:53):
push hard, really push hard every day, is what are your expectations for us?
And so one of the things I'm really big on, you know, the purchasing agent gets
it and they think it's a commodity. I'm going to go get a boiler.
And they don't have a clue that they need, they'd like an economizer,
an SCR, or they need a water softener.
(34:15):
So it becomes a commodity item to them. And we all ask solution-driven questions.
We're asking questions to pull out as much information from that person as we
can, which allows us to give them a good solution.
And what it all comes down to, forget all the paperwork, and we can work the contracts out.
(34:36):
I know the three companies that are here, we're all solution driven.
It isn't renting boilers at that point. And we forget all about the metal.
It's all about renting a solution that's going
to deliver the right amount of steam for their
given project because what happens if it's
a batch load where they only need it for an hour and
(34:58):
then they shut it off if we don't ask those questions we give them the wrong
boiler and they fail that boiler right um so it's kind of funny i always tell
people you're really not selling the steak you're selling the sizzle you're
really selling that solution or renting that solution to the lessee,
and it's all that process and the pain that we're asking those questions.
(35:22):
That purchasing agent wants to get a number. How many times have we all heard,
just send me a darn quote?
Just send me a quote. Just send me a quote. I don't want to send you a quote.
I need to ask these questions or we're going to fail.
Do you want us to fail? And that's a question. And then I shut up.
That's hard for me. Yeah, yeah, yeah.
It's a difficult thing. But what
(35:43):
you need to do is say, do you want a solution or do you want a boiler?
Because until we understand their needs, we really cannot tailor a solution to them. You cannot.
No. And you will get them to your point. You'll get purchasing agents that say,
hey, you're not talking to the facilities manager. You're not talking to the maintenance engineer.
All you're going to do is talk to me. I want a proposal. This is what I said I needed.
(36:04):
I want a proposal based on that. And sometimes you're forced to say,
I'm going to either give them a quote or I'm going to back away from the job.
We don't give them a quote. Yeah. I can tell you, we don't quote them.
Because the person agent said, this is all I'm going to give you.
You're not talking to anybody else in the plant. So send me a quota or I'm going to go to somebody else.
(36:26):
Well, we understand that's setting the project up for failure.
That's right. It is. We understand.
None of us want failures. That's right. None of us want failures. No, not at all.
Well, this has been pretty good. It has been. Really good. I enjoyed hanging
out and talking with you guys. And we didn't violate the antitrust thing, which is great.
We made it through. Perfect. And we're really not bad guys.
Maybe had some contract stuff, but it's truly there for protection of you as
(36:51):
the customer, but also protection of ourselves and the businesses that we have
and the equipment that we have, the investments that we make.
It's very, very important to make sure that the contracts are always going through
signed contract before it leaves.
So very important as well. So really appreciate you guys hanging out with us.
Thank you. And thanks for coming by.
(37:13):
We'll see you next time on the Hot Fire Podcast.
Music.
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