If you run a construction company or you have projects that requires the use of an excavator, it may seem logical to have an excavator in your company’s fleet of vehicles. However, purchasing equipment like an excavator is a significant investment.
Hiring might be a more suitable option, especially if jobs are infrequent and you are looking at ways to keep the costs of running your company as low as possible. At the end of the day, you want to make a decision that will keep more money in your pocket and allow you to deliver your project on time and within a low budget.
The most important reason for purchasing an excavator versus hiring is ownership. When you are an owner, you have more flexibility of when, where and how you can use the excavator. You have the freedom to do whatever you want to do with the machinery. You can move the excavator from one job site to another and avoid spending more money on drivers and other fees if you operate the excavator yourself.
However, there is a downside.
Ownership is more than just about freedom to use your excavator whenever and however you want, there are certain responsibilities that are actually very costly. Because of the heavy investment you have to make when buying your excavator, you also have to deal with costs involved in keeping your machinery safe and in good working condition.
You also need to make sure that your machinery is well maintained. There are a variety of technical analyses as well as routine tests that need to happen to keep your machinery in good condition. That’s more money you a e to spend whether you have a project or not.
Apart from maintenance, your machinery also needs proper storage that ensures that it isn’t ravaged by the elements but is secure as well. If you neglect this, you might end up with a bigger bill for repairing things that could have been avoided. Even big companies with big budgets will recognise what outsourcing excavators can do to their bottom line. Small construction companies may find it particularly hard to acquire and keep an excavator without any financial aid.
You shouldn’t be spending more money when you take on a project; you should be making money from it. A prudent project manager understands the importance of finding as many ways as possible to reduce the cost of executing a project. This is why a lot of Australian construction companies turn to equipment hire.
There are two ways to go about hiring equipment such as excavators: dry hire and wet hire.
What is dry hire?
If you need to only hire an excavator that you or someone in your company can operate, this called set hire but if you want to hire an excavator and an operator that is called wet hire.
Dry hires are more common in Australia. If you are in construction, you may already have someone who knows how to operate an excavator. This is someone who is in your payroll already. Wet hire is costlier because of the additional manpower that you also have to pay for.
Dry hire is easy to understand. There are no complex legalities and restrictions.
What is wet hire?
Besides having to pay for an outside drive to operate a hired excavator for your project, you also might not like the result. Consistency is not guaranteed with wet hire whereas with dry hire you can trust the person to deliver the results you expect because you know them and have worked with them before.
The benefits of dry hiring an Excavators
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Risk
If you are a contractor, you will not be responsible for ensuring the compliance of the equipment you’ve hired. You only pay for the provision of the equipment; the rental company has to deal with compliancy and has to deal with the issues that come with the equipment. Therefore, you carry less risk. You can be sure or its quality and performance. The company that rents out the equipment will keep its fleet in good condition with regular maintenance and service and keep things safe.
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Cost-Efficiency
Buying may seem like a good idea at first because you don’t ha to pay rental fees every time you use it but what about the times when jobs are scarce?
Consider also that you will probably use a variety of machinery not just an excavator but a bulldozer, bobcat, etc. Are you going to buy all of these when you only use them sometime? It isn’t coat-efficient to buy something you rarely ever need. You'll end up spending a lot more on storage and upkeep.
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Maintenance
The upkeep of equipment that you’ve hired is not up to you, the cost of maintenance rests on the shoulders of the equipment hiring company. You will be thankful for this considering how expensive maintaining equipment like excavators can be expensive. If unforeseen breakdowns happen, you will have to call a mechanic to get the equipment running again and this is also very costly. On a lot of occasions, a repaint may be necessary to get the machine looking less old and worn out.
Storage is also part of maintenance. You may even need lifting equipment for certain machines. All this requires money. You’ll end up wasting time focussing on allocating resources to maintaining equipment you hardly use.
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Disposal
At some point, your heavy equipment will need to be disposed of because it is old or redundant. When something is no longer useful and it is just taking up precious space or blocking people’s way, where do you take it?
When you hire heavy equipment, disposing of it is not something that will worry you because it is someone else’s property and not your problem.
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Modernisation
Technology is always evolving and companies need to keep up. The excavator that was the ultimate best in 2000 is not the best anymore. There have been better ones that do the job easier, quicker, better whilst conforming to reduced emission technology. If you have no limit on the money you can spend on equipment then you will be fine with having to upgrade your equipment every couple of years. However, if you rent your excavators, you can be sure you’ll be getting the latest models with updated technology.
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Transportation
What happens if you get jobs far from where your company is based? You have to factor in transporting equipment to that site. Moving machines like excavators can cost a lot of money. It becomes even more ridiculously expensive when you end up needing that excavator on site for a day or so instead of having throughout the entire project. It will cost you to transport it to site and back. The price you pay for moving an excavator from one place to another can have a significant effect on your profits.
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Specialisation
Different projects require different types of equipment. Some equipment like excavators are flexible, you simply need to change attachments and you can do more than dig or carry heavy material. It’s nT economically viable to try and buy all the different equipment types when you might use them once in a while. This is why it is better to hire than buy.
Hiring equipment is better than buying because of the money you can save. You don’t have to tie capital up on assets you’ll not need all the time instead of spending it on equipment or materials that you really need to have.
The advantages of hiring excavators and other construction equipment are clear. It frees you from having to deal with maintenance, security and storage amongst other factors.
Over the years, technology has been evolving. There have been great changes as far as efficiency, comfort, safety, speed and sustainability. These have become important as a growing number of clients put more emphasis and are even willing to pay more for projects that can be delivered on time or before the project deadline.
In the past contractors would choose cheap equipment to hire as a means to save money, however “cheap” doesn’t always mean equipment is in good condition or that can do the work fast and efficiently. Time in the construction industry is money. You want efficient equipment that is not likely to break down in the middle of the project and by doing so, hold up the other processes that need to happen.
Attitudes in the construction industry have changed. Companies within the supply chain have turned to forging relationships with various people on the value chain. This means you can find a company that supplies exactly what you want when you want it, exactly when you need it.
An increasing number of Australian companies have been switching to heavy equipment hire. The number of companies opting for rental instead of buying has been on the rise. However, like with most products and services, companies are not the same.
For excavator hire services and advice, we recommend speaking with Scoop Hire. The company has a mission to be the first choice to make when looking for excavator hire, and can provide all the information and advice you need to make that crucial decision that will help you execute your projects more efficiently.