In the machinery hire industry, the rates tend to be extremely volatile. Sometimes, people tend to forget that when renting equipment, the rates are never quoted on a one-size-fits-all basis. Instead, the cost tends to be specific to the project.
Of course, there is some consistency in the sense that the machinery hire rates are basically provisional estimates. These are usually based on the item’s lifespan in addition to the full cost the supplier will experience, given there are no unexpected costs. It’s once the estimate is assessed alongside the whole project that major price variations happen.
Since the rates are usually project-specific, machinery hire cost can vary between projects. That being said, we are going to look at the factors that affect this alongside the benefits of machinery hire.
The Advantages of Machinery Hire
There are numerous benefits to taking this route. For starters, buying your own equipment involves spending a lot of money, which might not make sense for a relatively small project. On the contrary, when you rent equipment, you do not have to arrange for capital. The cost of machinery hire is way lower than buying new, and you will ideally be saved from the repair and maintenance that will be required from time to time.
Renting is an ideal option as it saves you time and money. If you require certain machinery on a regular basis for a temporary project, it is way better to rent. You do not have to part with a lot of money. It is far easier to pay rent than bear the huge maintenance cost. Even some machinery hire services can offer on-site maintenance services if you find issues with their machinery, thus saving you valuable time.
Factors That Determine Machinery Hire Cost
Rural regions or places that are harder to reach from the supplier of the machinery will accrue higher mobilization and demobilization rates. Also, this is affected by availability, which plays a major role in the supply and demand of an item.
As with everything in this world, the law of demand and supply affects how machinery hire is priced. If the demand for a machine in your region exceeds the supply, the rate will ultimately increase. If the machine needs to be hauled for a substantially long distance, it will accrue the additional costs for transportation.
Availability can also serve to reduce the prices, particularly when there is an oversupply of substitutes or as a result of increased competition.
As you can expect, size matters when it comes to machinery hire. How you utilize the machine may play a major role, but the transportation costs vary significantly depending on the size of the machinery.
Dry or Wet Hire
Wet hire will always attract a bigger rate compared to dry-hire, as it comes with an operator. Also, the wet hire rates will vary depending on the qualification or operator’s experience level.
Just like the number of kilometres a vehicle has travelled, the number of hours a machine has been in operation affects the rate substantially. The more hours spent, the more the depreciation, essentially lowering the price. A new machine will certainly cost more to rent than a used one.
Individual Specs of the Machine
Similar to buying a car, the machine specs play a vital role in the hire rate. The value of the machine is calculated by its model, make, year and things like Universal Total Station or GPS. As we mentioned earlier, the suppliers determine the initial rates based on their expected revenue and the cost of the machinery during its lifespan. So, the hire price is usually based on these aspects and the factors in this post.
Fuel and Maintenance
Depending on the project site, fuel & maintenance can be included in the machinery hire rate. These factors’ influence on the cost can ideally depend on the site’s accessibility and location. Whether or not the equipment requires scheduled maintenance or servicing is another factor that affects the rate.
Tips To Keep in Mind When Hiring Machinery
Use Local Suppliers
Even though you may incur higher up-front costs, using local suppliers can be more advantageous than using a supplier from another region. You are only going to incur higher transportation costs with the latter.
Safety is vital when it comes to any project. Some suppliers with excellent safety reputation can be a bit costlier, but it is always important to have safety as a top priority. This is a major factor to consider depending on the scope of your project.
Go for Value
Renting based on the cheapest rate when it comes to machinery hire. You want machine reliability when it comes to time-sensitive projects, something you might not be able to enjoy with a cheap supplier. As such, always weigh the pros and cons of each option.