The Answer Is Transaction Costs Parts is (Not) Parts: The Life Cycle Problem for Heavy Equipment
Dec 23, 2025
Alex Schuessler, Founder and President of SmartEquip, shares insights into the heavy-equipment rental industry. He reveals how Japan's unique rental market thrives on service speed rather than just parts discounts. The discussion highlights the significance of data integration to eliminate errors and enhance uptime. Alex also explores the impact of IoT and AI on maintenance and productivity. Additionally, he touches on the complexities of ownership versus renting in relation to transaction costs and the evolution of business models that prioritize service efficiency.
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Rental Markets Convexify Ownership
- Rental markets commodify excess capacity and convexify ownership, shifting value from ownership to utilization.
- Alex Schuessler shows rental transforms asset allocation by focusing on utilization and financial returns rather than purchase price.
From Academia To Rental Yards
- Alex recounts leaving NYU after a chance meeting and touring rental yards, which sparked his passion for equipment rental.
- That weeklong tour led him away from academia into the equipment distribution and rental world.
Japan's Long Lifecycles Make Rental Viable
- In Japan rental penetration is extremely high and equipment lifecycles are much longer to make low rental rates viable.
- Schuessler links long lifecycles and resale used markets to make rental economics work at thin margins.