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Don't hire construction equipment before reading these money saving tips

23/11/2016

58 Comments

 
PicturePicture courtesy of Joao Neto
Most construction projects hire equipment. Sometimes these costs can form a significant portion of the project costs.
Say a project’s equipment rental costs make up 40% of the project’s total costs then just saving 5% of these costs could translate to an additional 2% or more profit. That doesn’t sound like a lot of money, but many projects only make 10% profit so an extra 2% of profit means the project will make 12% profit which is an increase of 20%. Wouldn’t the bosses be pleased with that? But put some of these tips into practice and you could find the savings are even larger – resulting in even bigger profits.


In this article I discuss some ways that you could save money on equipment rentals on your project.
​Pass these tips to your project team.


Ordering the equipment
  1. Make sure your order the right equipment of the right size. Some contractors think that bigger is better. But, bigger usually means more expensive to hire. It almost certainly means more fuel, which means more money. So unless you can use that extra capacity don’t go for the bigger model. Of course the opposite happens and contractors get a machine that’s too small and it’s scratching at the dirt or taking hours to load the trucks meaning it is inefficient.
  2. Ensure you are getting reliable equipment. Often cheaper items are older which could mean they aren’t as efficient as newer models, consume more fuel and break down more often. Older machines may also not have the latest safety features and they could be noisier, leak oil or be smoky. What you saved on a cheaper machine could be far exceeded by lower production and an increased fuel bill.
  3. Check what the rental rate covers. Often the extra charges can be nearly as expensive as the basic rental cost. The cheaper rental could work out more expensive than the expensive rental once all the additional costs are factored in.
  4. Ensure the equipment is insured. You don’t want to be paying several hundred thousand dollars should something happen to the equipment. Also check what your company’s insurance covers. Frequently contractors pay extra for insurance for equipment, while the company already has insurance in place which covers hired equipment. Many rental companies make extra profits on selling insurance for their equipment so it may be advisable to investigate alternative insurances.
  5. Some items may be cheaper to buy than rent. Projects are sometimes quick to rent a piece of equipment because it is cheaper. However, do the math and you may find, particularly for small items, or items required for an extended period, that it’s cheaper to buy than rent them.
  6. Make sure the rental company understands how long the equipment is required for. Longer rentals may have a reduced rate.
  7. Rented equipment is usually charged at an hourly rate, a daily rate or a monthly rate. Often there is a minimum period that the rental company expects to be paid. Will your project work the machine for those hours? The rental agreement may state that you have to pay a minimum of 10 hours a day. Well if your project only works 8 hours a day you’ll be paying 2 hours for nothing.
  8. Enquire what happens when the project can’t work because of inclement weather. One can often negotiate that equipment rental is reduced to 50% should the project be unable to work because of rain. If you are a good customer or a good negotiator you may even be able to negotiate this to a nil rate which is even better.
Paperwork

PictureImage courtesy of fantasista at FreeDigitalPhotos.net
​Check the rental agreement and paperwork to ensure that:
  1. The agreement is in line with what you ordered, and the terms and rates are what were negotiated.
  2. There are no terms hidden in the small print that can’t be complied with.
  3. That you understand the terms and conditions in the agreement and ensure that these are complied with.

PictureImage courtesy of stockimages at FreeDigitalPhotos.net
​When the item arrives on the project
  1. Check that it is the item you ordered before it is off-loaded at the project. It can be expensive to reorganise transport to return the incorrect item of equipment.
  2. Check for any visible damage and report it immediately. Remember the owner will charge you for any damage when the item is returned. Prior damage that hasn’t been reported may be incorrectly charged to your company.
  3. Check the condition of wearing parts (such as; teeth on excavator buckets, cutting edges on graders, etc). Normally the project is charged for replacing these items and they can be very costly.
  4. Check the condition of tires. Again the hirer is usually responsible for the cost of worn or damaged tires. In addition badly worn tires may become punctured easily, causing lost time.
  5. Ensure that the equipment doesn’t have any oil leaks. Vehicles should have all the correct safety features and they must be functional. Equipment that travels on roads must be road worthy including having a current vehicle license.
  6. Check the fuel level and report the amount of fuel to the rental company if it’s not full. Most rental companies expect that the machine is returned with a full fuel tank, yet often the machine arrives with an empty tank.  Large machines could have a capacity of hundreds of litres which could cost several hundred dollars to fill.
Operating the equipment
  1. Obviously it goes without saying that the equipment should only be operated by skilled and licensed operators. Using operators who aren’t qualified to use the machine could; void warranties and insurances, result in accidents, damage the machine and result in poor productivities.
  2. Ensure that the equipment is properly maintained and that repairs and maintenance are only done by qualified people. Damaged equipment shouldn’t be operated until a competent person has assessed the damaged and warrants that it is safe to operate the machine.
  3. Check that the equipment is only used for appropriate work. Equipment is often damaged when it is used for purposes it wasn’t designed to do.
  4. The equipment must be used productively – this includes:
    1. Ensuring it is used for what it was hired or rented for – often, for example, loaders are used for transporting equipment around the project instead of loading dirt.
    2. Making sure that equipment that isn’t required anymore is returned to the hirer.
    3. Ensuring the work couldn’t be performed by a cheaper item of equipment.
    4. Checking that there isn’t too much equipment on the project.
    5. Ensuring, particularly with earthmoving equipment, that the equipment teams are balanced – that the size of the excavator is correct for the trucks being loaded and that there are the right number of trucks so that the excavator isn’t waiting for trucks to load or that trucks aren’t waiting to be loaded.
At the end of the rental or hire period
  1. Check that the equipment has completed all the tasks on the project that it is meant to complete. Too often machines have to be remobilised because they were returned to the hirer before they had completed all the tasks on the project.
  2. Ensure the hire, or rental, company is notified in writing that the equipment is no longer required and organise transport to send it back.
  3. Check that all the items rented with the machine are returned with the equipment. Non-returned items may result in additional costs such as continued hire costs and extra transport costs to get the item back to the owner.
  4. Make sure that the item is clean and that the condition of the machine is checked and recorded. Unfortunately there have been cases of construction companies being charged for equipment damages that didn’t occur on their project

Conclusion
It is important that the project team understands the cost of equipment and ensure that it is properly looked after and operated by competent operators, that it is used productively and is put off hire when it is no longer required.
Equipment costs contribute significantly to the overall cost of the project. Reducing these costs will improve your project’s profit.
If you found this article useful please like it and share it with your team and connections.

Please like and share this article.
This article is adapted from information in the author’s popular books: 
'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'.
'Construction Claims: A Short Guide for Contractors' has just been published. These books are available on Amazon and other online book stores.
Paul publishes articles regularly on LinkedIn and his website. 

Paul writes regular articles for other websites, gives lectures, mentors, and is available for podcasts and interviews.
© 2016 This article is not to be reproduced for commercial purposes without written permission from the author.
​
construction management construction project management
58 Comments
Bradford Snelson link
21/4/2017 10:52:05 pm

It makes sense to me that bigger is not always better when it comes to construction equipment. I feel like in many instances you might be working in a confined space or with limited mobility. It would also make sense to me to spend some time researching the company you are renting them from to make sure that they have a good reputation for maintaining their equipment.

Reply
Paul
24/4/2017 09:31:55 am

Thanks Bradford.

Reply
Violette Lebrac link
12/8/2017 06:56:57 am

Thanks for mentioning that less expensive models might the older ones and may not work as well as newer versions. My husband wants to rent contractor equipment for our home renovation and wants to get the best equipment for the best price. I think speaking to a professional rental company would help you decide the best and the cheapest models.

Reply
Ridley link
27/10/2017 04:04:22 am

Thanks for the great earthmoving equipment rental tips. I agree that only professionals, trained to operate the machinery should do it. So, if we want to rent a bulldozer, do we hire someone to use it, too?

Reply
Paul Netscher
27/10/2017 09:05:36 am

Hi Ridley, some hire companies can supply the machine with the operator - obviously they charge for this. The advantage to the hirer is that the operator is responsible for the machine. If they damage the machine the hire company is responsible. The disadvantages are the operator will only work that machine - they won't help out elsewhere when the machine isn't being used. They may also be reluctant to take orders from the hirer's supervisor. Of course I've also had some useless operators supplied by equipment hire companies and we've sent them back for replacements - so you can't assume you will be getting a good operator.

Reply
Taylor Bishop link
14/11/2017 11:12:34 pm

Thanks for going over some things to think about when getting construction equipment. I'm glad that you mentioned that you should know exactly what the rental rate covers. Not only that, but it seems like a good way to know more about what to expect when you get the equipment, and the kind of maintenance you may have to perform.

Reply
Paul
19/11/2017 09:52:45 am

Thanks Taylor, it's good to hear that this article was useful.

Reply
sutton turner link
20/2/2018 11:17:50 pm

I'm glad you mentioned to make sure the construction equipment is clean and in good condition. My dad is looking into buying used parts for a large home project. I appreciate the information on how you can save money on construction equipment.

Reply
Derek Dewitt link
12/3/2018 10:49:51 pm

My wife and I are thinking about renting some construction equipment for when we landscape our yard this summer. I like your point about how, if a machine breaks down, you shouldn't use it until a professional inspects it. We'll be sure to have it serviced by the rental company if something happens during the job.

Reply
Hazel Owens link
20/7/2018 10:57:36 am

That's a great tip about checking what the rental rate covers since it can often be nearly as expensive as the rental cost. Construction companies that rent their equipment would benefit from this since they wouldn't want to be charged too much for the rental rate since the rental cost can already get expensive. This would also help them see which rental companies offer better deals and will actually work with them rather than try to get too much money from them.

Reply
Paul
6/8/2018 05:33:20 pm

Thanks Hazel for your comments. It is important to read the fine print of every hire contract and understand what you're paying for. Insurance can be as high as 20% - which could be a waste if your insurance will cover the item, or if you can get cheaper insurance. Then you need to understand all the other charges - you don't want a shock when you get the invoice at the end of the month or when the item is returned.
Regards
Paul

Reply
Gerry link
1/11/2018 04:07:07 pm

One piece of advice I would like to add if its ok, is when hiring plant equipment do what you do when hiring a car, take a video around the machine or piece of equipment with your phone. This will ensure you are not liable for damage from a previous hire and lets the plant hire company know you are going to look after it.

Reply
Paul
25/11/2018 12:30:41 pm

Thanks Gerry for that helpful and essential advice. I'm sure many have been caught by car hire firms charging for damage caused by the previous drivers. The same happens with construction equipment.

Reply
Kit Hannigan link
16/11/2018 12:05:41 pm

I really like what you said about how construction firms should look into negotiating at least a 50% reduction on rental rates because of downtimes caused by inclement weather. One can really see how young and up and coming start-up construction companies will be able to benefit from this tip since they do not have a lot of resources at their disposal yet. Cutting costs will certainly come a long way for these types of businesses. This is a really interesting read about construction rental equipment.

Reply
Paul
25/11/2018 12:32:58 pm

Thanks Kit. it definitely pays to negotiate the best rates and consider all the possible additional costs before signing the hire contract. Equally understand who is responsible for what.
Regards
Paul

Reply
Dennis Hahn link
9/1/2019 05:40:13 pm

Yes absolutely right, we should read such useful articles before buying construction equipment. Because this equipment is of high rates and one should know properly about all the small things. Thank you for sharing and mentionioning the all important points in the blog keep sharing such informative articles!

Reply
Paul
10/1/2019 10:57:09 am

Thanks Denis for your feedback. Regards, Paul

Reply
Amy Winters link
15/1/2019 12:00:32 am

I like your tip to make sure it's the item we ordered before it's unloaded, since having to re-load it can add to the expense of the project. My husband and I want to rent a few pieces of construction equipment for a large-scale landscaping project we're doing. I'd hate to have to pay more for the incorrect piece of equipment, so thanks for sharing the tip to double check beforehand!

Reply
Paul
15/1/2019 05:53:07 pm

Thanks Amy, glad I can help.
Regards
Paul

Reply
Dave Anderson link
1/2/2019 05:44:44 am

That is true that license operators should operate the equipment. Maybe it would be good to have an earthmoving contractor. Then they could use the equipment efficiently.

Reply
Paul
1/2/2019 09:48:52 am

Thanks Dave, good point and it may be relevant to large projects. But often contractors require machines so they can do their work, whether that's concrete or earthmoving. Paying the extra overheads for another contractor to manage and do the work isn't always practical or feasible. But even earthmoving contractors hire equipment since they don't always have the right equipment available - their machines could be busy elsewhere or they simply don't own the item because it won't be kept fully utilised.

Reply
Ellie Davis link
8/2/2019 07:30:19 am

Thank you for suggesting that you should make sure the equipment you order is the right size. My husband and I are needing to get some earth moving done and need to get the right equipment. I'll have to look into finding the best place to get this equipment.

Reply
Paul
8/2/2019 12:45:45 pm

Good luck with your project Ellie. Not sure the type of project and equipment you require, but do check you can operate the item and that where necessary you have the required licenses. Operating equipment incorrectly could result in accidents, injury and damage to the machine and other property.
Regards
Paul

Reply
Connor link
19/2/2019 05:53:19 pm

A lot of great points Paul, funnily enough your point when it comes to plant hire saying "Some items may be cheaper to buy than rent. " strikes a note with me as we kept hiring mini diggers for jobs think easy to get found out we could have bought one for the amount of times we rented one. Of course we have now, but hind-sight a great thing.

Reply
Paul
21/2/2019 12:56:56 am

Thanks Connor, I'm sure we've all had similar experiences - as you say hindsight is a wonderful thing. Of course sometimes we think we only need an item for a few weeks, then before we know it the machine has been on the project for several months. Good planning and organisation will make decisions easier.
Regards, Paul

Reply
Ellie Davis link
20/2/2019 10:59:35 am

Thank you for pointing out that you should make sure the contractor you hire uses reliable equipment. I'm needing some earth moving done so I can build my house. I'll have to look into finding the best contractor in the area.

Reply
Paul
21/2/2019 01:00:00 am

Hi Ellie, good luck with your project. Please see my book- 'Build and renovate your home with your eyes wide open', for tips on building and renovating your home and questions to ask when searching for a home building contractor.
Regards
Paul

Reply
Daphne Gilpin link
6/3/2019 02:51:02 am

Thanks for pointing out that it's important to make sure the equipment that's ordered is the right size for the job so we don't end up paying more than we need to on something bigger. My husband and I want to hire a construction manager to help us plan the construction of a retail building. I hadn't considered that the size of the equipment should fit the scale of the job, so I appreciate you sharing that tip!

Reply
Adrian Jones link
13/3/2019 07:54:01 am

One thing to always check when renting out heavy-duty construction equipment is that you're getting the right-sized equipment since size doesn't usually matter in this case! When it comes to selecting what kind of equipment to rent out it's always a good idea to shop around and look for the best value for your money so that you can get equipment that's reliable and still easy on the construction budget. If I had the chance to rent out heavy equipment, this is one of the things that I would really consider doing since construction firms want to get the most vale out of their money.

Reply
Hazel Owens link
16/3/2019 07:26:23 am

You make a good point to check what the rental rate covers since there could be extra charges for different features. This would be good if you need to find a earthmoving company that will also hire an operator so you don't have to learn the machine. It would be good to find a company that includes all of that in the rent rate so you won't be charged more.

Reply
Kate Welling link
23/3/2019 02:19:50 am

I need to get an earthmoving contractor for my property. When I'm looking, I'll be sure to check what the rental rate covers. It makes sense that this would make a difference in the long run.

Reply
Yoshiko Flora link
11/4/2019 11:03:56 am

Even if you said that a cheaper equipment rental can turn out to be more expensive than buying it, I would like to add that renting heavy equipment, such as cranes, can help companies save money on having it maintained after the project is over. If I were to spearhead a downtown residential apartment job, I would look for a local service to rent one from. With their help, one can get enough help to lift heavy steel bars or concrete containers up stories high to get it done.

Reply
Camille Devaux link
30/5/2019 03:42:55 am

My uncle had mentioned his look for an earthmoving equipment rental service. Making sure that you are able to keep all the items together when you return them is a great idea. He would love knowing that you should be check costs.

Reply
Shivika
9/7/2019 02:29:33 pm

Thanks for sharing the money saving tips for construction equipment rental have a look at
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<a href="http://www.radhacranes.com/">Crane Service in Chennai </a>

Reply
Angela Waterford link
14/8/2019 11:25:55 pm

It's true that most construction projects hire equipment. I think I'll confirm from my staff what the right size of the concrete tools that we'll use so that we can rent the proper ones that we need. I'll also make sure that we are getting reliable equipment so that we can finish the project as soon as possible.

Reply
Randy Chorvack link
6/9/2019 02:09:43 am

I love how you said that only licensed operators should be working the heavy equipment. It can be really dangerous if you're trying to work the machinery without knowing how. My cousin works in construction and he says that he had to go through a lot of training just to be able to operate a forklift. It's important that you stay safe when doing a large project.

Reply
kate hansen link
17/10/2019 01:01:21 am

It was helpful when you said that you should make sure the company knows how long you're renting the equipment. My husband is needing to rent a crane for a project. I'll make sure to pass this information along to him for when he rents a crane.

Reply
Ellie Davis link
20/11/2019 01:08:04 am

I loved that you mentioned you need to rent reliable equipment for your project to prevent safety hazards. My husband is working on a remodeling project at my mother's house, and we are looking for advice to rent the proper equipment. I will let him know about the benefits of renting quality equipment to prevent accidents during this project.

Reply
Luke Smith link
17/12/2019 09:37:14 am

I like that you highlighted the importance of purchasing the right size for the equipment that I need. My dad will be doing his very first construction project with the help of his former workmates from their previous company for my mom's new residential townhouses that will be up for rent. I'll make sure to offer assistance to my dad as his secretary, so that I could counter-check all of their tools and machinery equipment, including cranes and tractors, to avoid any unnecessary charges and to minimize errors.

Reply
Heavy Construction Machines link
15/2/2020 07:43:50 pm

Renting Equipment can be a great thing when it comes to short term work but in the long run owning the right construction equipment can be helpful and beneficial for one

Reply
heavy equipment transport companies link
12/3/2020 08:14:39 pm

Paper work is also important while choosing heavy equipment companies although you need to read all the terms and conditions of the company which are followed by them moreover to know more about their services you can ask few questions regarding to their services.

Reply
Alan link
23/3/2020 03:28:39 pm

Great article.

Reply
Alicia Byrne link
16/5/2020 01:07:36 pm

I think you made a good point on checking whether the equipment you order is correct before it is being off-loaded at the project. My husband's friend was looking to start a construction project that requires a crane. I will definitely let him know about the dos and don'ts on renting a equipment for his project.

Reply
post and beam construction link
22/8/2020 05:06:38 pm

Thanks a lot to you for sharing construction management blog don’t hire construction equipment before reading these money saving tips here, these kind of ideas are were much needed. I really appreciate that you have provided the data too, really appreciative and useful blog for us. Looking for more!!

Reply
Taylor Hicken link
9/11/2020 05:01:58 pm

I totally agree when you mentioned it is important to ensure that the equipment has the proper insurance in case of any unwanted circumstances. We can never tell if any mishaps that could occur and you don't want to be responsible for something that is beyond your control. Therefore, I would like to think if a company needs to rent a crane, it should make sure that the equipment has been insured by the supplier.

Reply
Eli Richardson link
4/1/2021 10:15:25 pm

I'm glad you mentioned that it is important to order the right size of heavy construction equipment for the job at hand. We often think that if it's bigger, it's better, but it really depends on the nature of the job to do. Personally, I agree with you about consulting an expert before hiring the wrong size of equipment. You did a great job of enlisting ways to hire the right construction equipment.

Reply
Rent Equip link
24/2/2021 03:11:52 pm

Great!!! Thanks for sharing this article about the benefits of renting construction equipment.

Reply
Chris Pederson link
2/3/2021 08:43:36 am

Thank you for the advice to always check any vehicle for damage before using it. The last thing I want is to be blamed for something I didn't do. However, I bet if I find a reputable service then they won't try to pull anything like that on me.

Reply
Braden Bills link
4/3/2021 01:04:53 am

I need to get some earthmoving equipment so that I can build a retaining wall. It makes sense that getting the right equipment for this would be important! I'll be sure to get some that's the right size for this project so that it works out nicely.

Reply
Adam Golightly link
19/3/2021 07:19:20 am

I can see how a business could really benefit from getting the right cranes in order to be more effective. Making sure that they can get some help from a professional could allow them to be more productive. It was interesting to learn about how they should know what they are using the equipment for, and make sure that there isn't too much equipment on the project.

Reply
Chris Pederson link
22/6/2021 10:37:37 pm

I think ensuring all the equipment is the right size for the trucks and such would really hard. I'd need an expert to help me plan that far ahead. Specifically with large earthmoving machines.

Reply
Charlotte Fleet link
17/8/2021 05:59:39 am

Paul, I appreciate all of your tips and suggestions for saving money when renting construction equipment. I like how you said that it is essential to make sure the company you rent from has the proper insurance to protect you in case something happens to the equipment. I think it would also be important to make sure that they have a reliable reputation for quality equipment.

Reply
Crane Companies Alberta link
21/3/2022 09:47:18 pm

Sometimes these costs can form a significant portion of the project costs. Say a project’s equipment rental costs make up 40% of the project’s total costs then just saving 5% of these costs could translate to an additional 2% or more profit. That doesn’t sound like a lot of money, but many projects only make 10% profit so an extra 2% of profit means the project will make 12% profit which is an increase of 20%.

Reply
John Carston link
5/4/2022 11:21:39 am

It's great that this article talked about the importance of . Last night, my cousin who is looking for a construction equipment rental that will properly suit their upcoming commercial project, asked if I had any idea what is the best option to do. You did
a good job explaining that consulting a trusted construction equipment rental company can help them with all their construction work. Thanks for this helpful article.

Reply
Tex Hooper link
1/6/2022 09:33:55 am

I like your construction tips. I need to rent a bulldozer. I'll have to rent one through a contractor.

Reply
Victoria Addington link
18/7/2022 02:15:01 pm

I agreed when you stated that older machines that are inefficient may lead to lower production and an increased fuel bill. My friend told me that their project needs the use of a tower crane. I think it's best for them to opt for a tower crane rental that provides newer models.

Reply
Iris Smith link
29/8/2022 04:10:32 am

I appreciate you mentioning it in order to make sure the terms and prices are as agreed upon and the agreement is in accordance with what you purchased. My brother is working on new building construction. He is seeking a crane service because his company does not provide a crane.

Reply
Jessie Holloway link
28/9/2022 07:35:08 am

Thanks so much for the list of things to keep in mind while looking into renting construction equipment. My uncle is working on a large project in his yard and he needs to move some shipping containers to continue the project. He's been looking into crane rentals and how they work to see if that's the right move.

Reply



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    Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
    The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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