MORE FOR LESS - A CAUTIONARY TALE

Plant hire used to be seen as a golden goose but it only lays golden eggs for the well-organised and ruthlessly efficient.

There's little room nowadays for the half-hearted dabblers that earned a living years ago with a few well knocked about pieces of kit.

Today's plant hire is about marketing, service back-up and a close monitoring of a machine's performance (and costs) in service.

But having said that there is still a regrettable tendency to 'go with the market' and keep pace with the locally obtainable hire rate.

In this, the multi-depot outfits have the edge because they are able to switch kit from a 'low rate' area into a 'high rate' one.

All of this comes as part of the strict monitoring of the machine or group of machine types. The old 'suck it and see' approach is simply out of kilter with today's thinking.

Just look at what has actually happened to hire rates. We surveyed hire rates over a 15- year period and the results are surprising to say the least. Perhaps the most surprising aspect is that after years of rampant inflation of everything from gas oil to hand wipers, hire rates are still too low!

Take the most obvious example, a backhoe loader, which in 1979 cost around œ18,000. The hire rate at that time was a little over œ7 per hour and invariably the machine was hired with an operator. Now a similar but more technically sophisticated machine costs around œ32,000 or 77% more. So where's the hire rate?

It's now around œ13 per hour or 80% more. That means, in effect, that the user gets much more efficiency for the same amount of money. It's a little like computer technology but not so marked.

With dumpers and compressors the story is very similar. But dumpers haven't had quite the increase in hire rate that compressors have.

Dumpers have gone up by some 16% while compressors have managed around 40%. In that time prices have risen and so has efficiency and, more importantly, reliability. The end-user wins again.

Rough terrain forklifts have managed a rate increase of some 50% (with a couple of wobbles downward in 1992 and 1993) and truck-mounted cranes have achieved a similar figure.

Yet crane hirers in general spend lots of time telling us that rates are too low. Why the difference?

Simply put it is that cranes need expensive operators whether they are working or standing. On the other hand RTFLs are simply used when necessary and parked when not. And it is in the area of operators where costs have risen the most.

Which probably contributes to the growing trend towards hiring backhoe loaders without operators. There can't be many sites nowadays without a CITB certificated backhoe loader driver.

Mini excavators haven't been around for 15 years, it's more like eight.

But their steeply rising popularity and numbers has meant that rates are static. A classic case of over-supply?

In the longer 15-year period crawler excavators have managed a 100% increase. And contractors are telling us that they are forming queues to get the right machine on a specific site!

Step forward the man with the crystal ball!