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7 Factors affecting plant hire rates

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Posted by PlantMiner
In the plant hire industry, rates can be volatile....Really volatile. People sometimes forget when hiring equipment that rates are never generally just 'rates', quoted on a one-size-fits-all basis. Rather, rates tend to be project specific.

There is definitely some consistency in the sense that equipment rates are essentially provisional estimates.

These are based on the projected lifespan of the item, in conjunction with the full cost the supplier expects to experience, assuming there's no unexpected expenditure.

It is once this estimate is evaluated alongside your entire project that major price variations may occur.

As the rates are project specific, the cost of equipment hire can differ between projects.

So what are the factors affecting your plant hire price? Well, they can include:

1. Availability

As with any product or service, the law of supply and demand affects how it is priced. If the demand for an item in your area exceeds the supply, the rate will naturally increase. If plant must be sourced from a considerable distance, the equipment will accrue added mobilisation and demobilisation costs for transportation.

Availability may serve to push down prices, due to increased competition, when there is an oversupply of available substitutes.

2. Location

Generally rural areas or areas that are further out of reach from where the plant is based will incur higher mobilisation and demobilisation costs.

Again, this comes down to availability - the supply and demand.

 

location Map - Photo credit: conversation.co.uk

 

3. Wet/Dry hire

Wet hire is always going to attract a larger higher rate than a comparable dry-hired machine, as it includes an operator.

Wet hire costs will vary based on operators' level of experience and qualifications held.

4. Size of machine

Yes, size does really matter! While how you use your equipment may play a role too, mobilisation and demobilisation costs change significantly depending on the size of the machine.

 

200_Ton_Truck Mining truck - Photo credit: Wikimedia

 

5. Individual machine specifications

Just like purchasing a vehicle, the machine specifications play a role in the hire price. The machine's value is calculated by its make, model, year and features such as GPS or a Universal Total Station (UTS).

As mentioned earlier, supply companies determine their initial rates based on their projected business revenue and the expected cost of the machine over its entire lifespan.

Based on these calculations, along with numerous other factors, a hire price is determined.

6. Individual machine hours

Similar to the number of kilometres a car has driven, the hours the machine has operated will affect its value. The more hours it has operated, the more its value generally depreciates; consequently lowering the hire price.

7. Fuel/Maintenance

Depending on the job site, fuel and maintenance may be included in the hire rate. Their influence on the price may also depend on site location and access. Another affecting feature is whether or not the hired machinery needs scheduled maintenance or major service maintenance.

How to get the best value rate for your project

The good news is that PlantMiner's quote request form covers each of these factors, to ensure you get rates as specific as you require.

There are also a few tips you should consider when hiring equipment, including:

  • Utilise local suppliers: They may incur higher up-front costs, but using suppliers local to the project may be more beneficial than hiring from a supplier located far away. The latter may suffer greater mobilisation and demobilisation costs.
  • Go for value: Hiring based on the lowest price may not be the best option. Plenty of our suppliers win work even if they don’t have the lowest price. This comes down to machine reliability. It’s important to weigh up the pros and cons of a cheaper/older machine VS slightly more expensive/reliable machine. Break downs cost time and money.
  • Safety reputation: Safety is top priority on project sites. Understandably, some companies with a great safety reputation may be more expensive than those with a lower one. Depending on your project, this may be another factor to consider when hiring equipment.

PlantMiner

PlantMiner

PlantMiner is Australia's leading plant, equipment and subcontractor hire marketplace, connecting you with all your construction project hire needs in one place.