Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/829086
SPECIAL REPORT • 9 this year; an increase of more than 16 percent over last year's budget expectations. Anecdotally, operator reaction to this category remains quite mixed. For example, one respondent noted that new technology and Tier 4 engines could be both a blessing and a curse, while another reported that Tier 4 (interim and fi nal) equipment has caused his engine maintenance costs to increase by 30 percent. Part of the challenge seems to be personnel, both in terms of equipment operators and maintenance personnel. For example, maintenance of onboard technology struck a chord with an operator who said repairs of equipment automation — particu- larly monitors — is beyond his operation's capabilities. Another reports that equipment operators are skittish about new equip- ment. His solution was to put "younger workers with more fl exi- ble attitudes" on new machines that featured more technology. Others tout innovations such as autonomous drills, and equipment with automated repetitive functions as equipment trends worth watching. "Automation lessens the 'skill' compo- nent required in operating equipment," one explained. Hybrid equipment technology proved to be a game changer for another respondent. "The technology enhancements have drastically reduced our tire costs and increased fuel economy. It was a paradigm shift for our company," he said. "So far, we are extremely pleased with (the new wheel loader's) performance." Of the 20 equipment categories surveyed, respondents indi- cate that 18 equipment categories are likely to see higher levels of investment than during 2016. In addition to automation/tech- nology, other categories of anticipated higher spending levels include equipment maintenance (+13.9 percent), conveyors (+12.7 percent), trailers (+12.0 percent), and off-highway haul trucks (+7.0 percent). Only two categories, ticketing equipment (-1.7 percent) and dredges (-1.0 percent), expect to experience lower levels of increased spending in 2017 than in 2016. Looking forward, more than one in four (25.6 percent) re- spondents say that the percentage of their capital expenditures directed toward long-term investment will grow, while 55.8 percent say it will remain the same and 18.6 percent say it will decline. When asked about investment in long-term equipment purchases rather than consumable ones, more than half (50.4 percent) of respondents report they will spend 1 to 20 percent of their capital expenditures budget on items such as crushers, screens, classifying tanks, and mobile equipment (see Figure 3). New vs. used acquisitions When purchasing equipment this year, most respondents expect to buy new iron. Once again this year, screen media is the equipment category most likely to be purchased new, with 92.5 percent of respondents with procurement plans saying they will buy new rather than used. Other categories of equip- ment in which operators are likely to buy new include automa- tion/technology (89.5 percent), screens (82.2 percent), ticketing equipment (81.5 percent), and crushers (75.7 percent). In terms of used equipment acquisitions, respondents who plan to buy say they are most likely to purchase used equip- ment among the following categories: dredges (54.6 percent), drills (44.4 percent), trailers (40.5 percent), Class 8 trucks (38.8 percent), and portable plants (35.6 percent). Both the dredge and drill categories yielded a higher percentage of prospective buyers who plan to buy used over new. Equipment rental and leasing continues to make headway among operators. "Our biggest challenge is allocating capitol for growth and expansion when there is so much need for sustain- ing capital to replace aging equipment," notes one respondent. To respond to that challenge, the company is using operating leases for most of its mobile equipment to reduce capital re- quirements. Among survey respondents who plan to rent or lease equip- ment, dozers (30.1 percent) are likely candidates for short-term acquisitions. Others include breakers (17.8 percent), off-highway trucks (17.6 percent), and a tie between Class 8 trucks and drills (16.6 percent each). Brand loyalty? Equipment acquisitions are all about uptime for respondents to