Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Plant must raise prices and profits

Sir, I was standing on the side of a haul road on a large construction project the other day. The ground shuddered with every passing dump truck.

What a magnificent sight, as truck after truck rolled by.Trucks, diggers and dozers all working like clockwork, or, that is to say, as clockwork as these things can be.

Plant hire is a demanding mistress at the best of times - it gets harder ever year to make a good return on investment.

Equipment gets more and more sophisticated and more expensive, operators require more money to operate, engineers require more money to engineer, hauliers require more money to haul.

The hire rates however never seem to increase accordingly.

The customer sets off out into the market place to hire plant and gets all the plant hire companies involved in a Dutch auction to see who will work for the least per hour.

I did a quick calculation as I watched the trucks.The average cost of the machinery on the dig was around £160,000 and the average rate per hour was £40.You don't need to be a genius to see that this is a thin margin.

If you take away the operator, servicing, all other maintenance, depreciation and the like, then the machines in question will have to work over 6,200 billable hours just to cover costs.

A plant hirer is a service provider.We in the plant hire industry should not forget that, it is hard to see, given the information above, just how this can continue.

The fault is not with the end-user but with plant hire companies - after all, it is plant hirers that set the rates not the enduser.

I find it hard to understand how the end-user can carry on expecting first class service at second class rates. Plant hirers take note: it can't continue.

Name and address supplied