Understanding the Rental Dispatching Process: Reservations vs. Contracts

Tony Tye

Renting equipment is a complex and logistical dance. When you’re managing hundreds of assets, timing is everything. Reservations and contracts are essential for operational planning, but can be used in different ways. Let's look at how different strategies can impact your rental flow.

Reservations vs. Contracts

A reservation is a "save the date" for your rental equipment. A customer says they need an excavator next week, but they are not committed; there are no legal strings attached. It’s just a placeholder.

A contract, on the other hand, is the real deal. It locks in a formal rental agreement and terms, including the specific equipment type, rental period, and pricing. Once it's signed, both sides are committed.

Using Reservations and Contracts to Plan Your Upcoming Rentals

You now need to plan, schedule, dispatch, and finalize your upcoming rentals. How does the process differ at each phase when you work off reservations as opposed to contracts?

The Planning Stage

The planning stage is about looking ahead. You may start thinking about which machines should go with each reservation, but nothing is formally assigned. This offers flexibility if a project changes. For example, you can easily accommodate a request for a bigger crane or a smaller front-end loader. It's customer-friendly, keeping options open. The downside, however, is uncertainty. You don't know if equipment will still be available when the customer is ready to commit. Popular items might get snagged by someone else, leading to overbooking risks.

Alternatively, some customers may sign a contract early, locking in equipment immediately. This guarantees availability and gives both sides peace of mind. However, it’s rigid. If plans change, the customer is stuck with equipment that sits idle. This early commitment might make customers hesitate.

The Scheduling Stage

If you schedule items for delivery without a firm commitment (i.e., on a reservation), you take on additional risk (and costs!) if the customer backs out. It can be difficult to plan your deliveries in this logistical limbo. However, if you wait until you have a signed contract, you may find yourself scrambling to get deliveries on the calendar at the last minute. Long delivery delays can negatively impact the customer experience – and create more chaos for your dispatchers.

The Dispatching Stage

If you dispatch on reservations, you can even accommodate last-minute tweaks when a driver is on the way. However, uncertainty lingers without locked-in terms, and moving equipment without a guarantee is risky. Your drivers will have to haul equipment back to your yard on your own dime if the customer flakes.

If you wait to dispatch off contracts, you get clarity, terms are set, and disputes are reduced. But if signing drags on, your drivers may end up waiting and wasting time. Changes after dispatching are tough to make.

The Finalizing Stage

If you dispatch on reservations, you’re likely getting contracts signed at delivery. You may let customers test the gear and make sure it’s right for the job, or you may require a signature as soon as the equipment arrives on site. However, it means more uncertainty for you – and on-site signing can slow down your routes.

Streamlining the Process with AI-Driven Dispatching Software

Automated dispatching software can smooth out these kinks, whether you work off reservations, contracts, or both. Track availability, assign equipment, and update in real-time to better balance flexibility and certainty. Adjust assignments on the fly or lock them in early; optimize driver routes at any stage; and reduce headaches like overbookings or miscommunications.

As an example: InTempo CTX can flag three upcoming reservations that all call for the same tractor. You can shuffle assignments early to prevent last-minute chaos or ask each prospective customer to lock in a contract to secure the equipment for their job.

InTempo CTX can accommodate any way you work—whether that’s off reservations, contracts, or a combination of both. Find the sweet spot between optimizing your business and staying flexible for your customers; nail delivery timing and keep the wheels turning in your yard.

Want to see how InTempo CTX can help you optimize your planning and dispatching processes? Request a demo here or contact us for more information.