Edition 5 | Fall 2012
Quarterly
See Inside: • Loader-Backhoes vs. Mini Excavators - Pg 4-5 • Rental Focus - Pg 8-9 • Tax Depreciation on Equipment - Pg 18-19 • Tractor/Scraper Combos - Pg 22-23
Fargo, ND Permit No. 54
PAID
PRESORTED STANDARD US Postage
WINTER RENTAL EQUIPMENT HEADQUARTERS ve r e Res units r you W! NO
Blowers Generators Heaters Skid Steers Wheel Loaders
Great product selection is only part of the story. When the blizzard hits you need to have confidence your equipment is ready to run 24 hours a day. At Titan Rentals our rental fleet is full of late model machines that are maintained by our service professionals on a rigorous schedule to minimize downtime. While on rent, maintenance and repairs support is handled quickly and efficiently thru our network of over 85 Titan Machinery locations across our footprint. You can count on Titan Rentals to have the right machines backed by the best product support in the market.
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When prospective customers ask me what sets Titan Rentals apart in the rental equipment market, I always point to our network of full-service dealerships across our 9-state footprint providing factory trained service and parts support for our fleet. No other rental company in the area has the complete access to OEM parts and factory trained technicians that Titan Rentals offers. Our fleet is serviced and maintained by experts accustomed to providing exceptional service support to our retail customers, utilizing the same techniques, tools, training, facilities, and service vehicles we use every day for supporting customer-owned units. Not only is the average age of our rental fleet one of the newest in the region, it’s kept in good operating condition by people trained by the factory. Maintenance is by the book. Patrick Fisher Needed repairs are made before machines go out on rent. Dependable OEM replacement VP Construction Division parts are used in maintenance and repairs. We don’t believe in cutting corners in keeping our rental fleet equipment operational. If something does fail on the jobsite, we have over 40 full-service dealership locations stocked with parts and the technicians who are equipped with the training, service tools, and service trucks to get you up and running again fast. You put your reputation on the line every time you take a job. You need to have equipment and support you can count on. There is nothing more frustrating and costly than to have a machine show-up on the jobsite that immediately breaks down. Give Titan Rentals a try on your next construction equipment rental. I’m confident that you will find our rental staff to be friendly and knowledgeable and the equipment to be in world-class condition. Thanks again for your business and we look forward to serving your equipment rental needs in the future.
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Loader-Backhoes vs. Mini-Excavators Choosing the Right Tool for Your Job
Over the years, light digging jobs around the jobsite have traditionally been tackled by loader-backhoes. From digging trenches to loading trucks there is very little utility work that a loader-backhoe cannot take-on. But with the development of mini-excavators, today’s contractors and rental customers have another solution for utility digging needs.
Loader-Backhoes – Versatility Loader-backhoes are one of the most versatile machine at the rental yard. Taking the place of 2 machines – the wheel loader and the excavator, loader-backhoes are a valuable tool on the jobsite. When equipped with the extenda-hoe option, loader-backhoes can reach dig depths of over 18 feet, with acceptable break-out and craning abilities. The front loader is capable of light loading applications. When equipped with 4 wheel-drive, a loader-backhoe has enough traction and power to fill trucks.
Loader-Backhoes – Not a Wheel Loader, Not an Excavator The versatility of the loader-backhoe design comes with a compromise in productivity. A wheel loader is designed for maximum productivity in loading applications. An excavator is designed specifically for digging and trenching applications. A loader-backhoe is designed to do both, just not as efficiently. Not as productive in loading applications as a wheel loader, or in digging applications as an excavator, it performs both applications adequately in many cases.
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Mini-Excavators – Compact Digging Machines Unlike loader-backhoes, mini-excavators are designed exclusively for digging. In digging applications miniexcavators hold many advantages over loader-backhoes: • Cab swings with the boom. It is much more comfortable and efficient having the boom centered in front of the operator at all times. Mini-excavators’ 360-degree swing also allows operators to swing the spoil further from the hole or fill trucks without having to crowd the hole. • No outriggers to reposition. Unlike loader-backhoes which requires the machine to be stabilized using outriggers and the front bucket when digging with the boom, mini-excavators dig off the rubber tracks. Repositioning a loader-backhoe requires the operator to pull the outriggers up, swing the seat around and raise the front loader before repositioning the machine. On a mini-excavator at the most you have to pull up the knock-down blade. • Sizes to match the job. Mini excavators offer a wide range of sizes to match your specific application. Sizes range from 3,000lbs to 12,500lbs, allowing customers to size up or down to fit the needs of the project. Smaller units can fit thru doors and maneuver around tight spaces. Larger models are the match of most loader backhoes in digging, but in a more compact package. Loader-backhoes are generally similar sized between models. • Fuel efficient. Mini excavators are essentially mobile hydraulic pumps on tracks and do not require high horsepower. Consequently, miniexcavators have smaller engines and operate on very low hourly fuel requirements. Loaderbackhoes have larger engine requirements due to loader applications that require horsepower. In digging applications they will burn considerably more fuel than a mini-excavator moving the same amount of material.
Which One is Right for the Job? When evaluating which type of machine to rent for your next job, factor in the type of work being done and weigh that against the strengths and weaknesses of the machines. If versatility is the most important factor, take a strong look at a loader-backhoe. You may be able to avoid deploying an additional unit to the jobsite. Loader-backhoes are also a good choice when you are within driving distance between jobs – saving the time and expense of having to haul a unit between jobs. Again, this might save an additional rental if the unit can be efficiently shared between multiple jobsites in the same area. Mini-excavators on the other hand are ideal for many digging applications. They are lighter and easier to trailer, and can be pulled behind lighter-duty pick-ups. Most operators will be more efficient digging with a mini-excavator. Due to their light weight and rubber tracks, mini-excavators also maneuver on the jobsite with minimal damage to the ground even in soft, wet conditions. Fuel savings will add up on long jobs as well. In the end, each will do the job. Titan Rentals allows you the flexibility to add the correct machine for your jobsite conditions and gives you the option to switch between them as necessary. Consult your local rental specialist if you are unsure which way to go for your next job.
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Titan Rentals has your Tundra
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3 Models Available
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High-Output Flameless Heat
– The Next Generation of Mobile Heating Solutions Industrial mobile heating has never been so safe and efficient! Rotational Energy’s RT flame-free heater line offers a heating solution that is the safest, most efficient on the market today. Utilizing an engine load system, the RT heater provides high-output heating without the hassle of an open-flame. Only Rotational Energy offers heaters with a J1939 Can Bus electronics – which provides easy 3-touch start-up, fully automated operation, and complete safety system monitoring. With a full line of heaters ranging from 350k BTU to 1.4 million BTU, we have the right solution for your heating requirements. All RT heaters have a variety of options including ducting diameter and intake shut-down valves. In addition, all Rotational Energy RT units have 115% secondary fuel containment and are manufactured to both DOT and Transport Canada standards. No other heater on the market provides a safer, more fuel efficient portable industrial heating solution than the RT. Call or stop by your local Titan Rentals dealer today to reserve yours.
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• High Heat Output • Efficient • Flameless Heat All models are made to withstand the most extreme arctic weather environments.
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CONCRETE PROJECT
HEADQUARTERS • • • • • • • • •
Compact Track Loaders Concrete Buggies Ground Heaters Hammer Drills Lasers Plate Compactors Power Trowels Skid Steers Screeds
Co Eq ncre uip te for me n E Se very t aso n!
The concrete business is all about deadlines. You don’t have time for equipment that isn’t dependable. The rental professionals at Titan Rentals understand you are on a tight schedule. You’ll get prompt service and well-maintained equipment that you can count on to meet your deadlines. Whether you need a compact track loader or mini-wheel loader for site prep, or a concrete saw, screed or ground heater for finish work, Titan Rentals has the equipment you need to get the job done on-time.
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Secor Excavating does large scale custom site work for custom homes in the Bozeman and Big Sky region of Montana. “We started out in 1995 and I bought out the business from my partner in 1996,” explained Bob Secor. “We’ve been doing site work and excavation in the area for 15 years now.” Secor works year-around on projects. “We keep the equipment running pretty much all year,” said Bob. “The winters are not extremely cold on average and we can still dig as long as we have work to do.” Titan Rentals provides nearly all the rental equipment for Secor’s jobs. “We prefer to single-source our equipment when we can,” explains Bob. “It just makes it a lot easier if you can make one call and you get everything you need from someone that you can trust. We’d been doing business with the company that Titan Rentals acquired a couple of years ago and made the switch when Titan took over. I’m happy to say that the service and support has gotten even better since Titan Rentals took over,” he continued. Secor keeps 2 excavators rented all year. In addition they rent dozers, rollers, hydraulic hammers, water trucks and other equipment as needed throughout the
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season. “The excavators have been great to run. Our operators like the smoothness of the Case excavators – they aren’t jumpy and are really comfortable to run. We have one hooked-up with a Leica PowerDigger 2D system. It’s been real productive and we’re looking at doing more machine control on the equipment we run,” said Bob. “We used to run a different brand of equipment. We’ve since found that the Case equipment we run today is extremely dependable and user-friendly to operate. Our operating costs are lower now and our productivity is higher than it’s ever been. Fuel savings on the larger units are significant over what we’d been running. It’s been a good switch,” said Bob. The work has been picking up over the last 12-18 months. As always, job are demanding and having a dependable supplier is a requirement, not an option. “It’s a lot of high-end houses we work on. We’ve got short-lead times and pretty demanding customers. When we need equipment, we have to know that it will be there and be in good condition. When there is a mechanical issue, I expect one phone call to put it right. That’s what we get with Titan Rentals,” said Bob.
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“My account manager at Titan Rentals is great to work with. Justin is my contact for all my equipment needs. I have him on speed dial. Whether it’s additional rental needs or maintenance or repair issues I make one call and he’s got me covered,” said Bob. “I trust him to give me advice on my equipment. He’s the one that predicted we’d see a big savings when we updated to the new Case excavators and dozers. That’s saved us some real money at a time when money wasn’t easy to come-by.” “Overall I’ve been really impressed with the operation at Titan Rentals. It’s easy to see the advantage of working with a rental house that is part of a full-service dealership network. They have the service really dialed-in with preventative maintenance and full fleet of service trucks that are available around the clock to keep us moving. These guys really get it that the equipment we rent needs to be ready to go when it hits the jobsite and stay up and running once it’s on the job,” he continued. “Whether it’s parts, service or rentals they really know the equipment and you can trust them to steer you right.” “We went thru some pretty tough times during the recession and it’s good to see that business is starting to come back now,” said Bob. “Thru it all Titan Rentals has been a valuable partner with our business. I’ve learned over the years that you don’t build a successful business without partners you can trust. I’m looking forward to working with Titan Rentals in the future.”
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NEED A LIFT? CAN HELP!
PRODUCTIVE RUGGED RELIABLE RELATABLE World-Class Support from the Region’s Rental Service Leader Titan Rentals.
Service | Parts | Rental | Sales
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Better Rental Solutions from Wacker and Titan Rentals.
Wide Selection In-Stock • Concrete Vibrators
• Light Plants
• Generators
• Mini-Wheel Loaders
• Ground Heaters/ Thawers
• Power Trowels • Pumps
• Heaters
with Service & Parts support from the LARGEST Wacker dealer in North America.
Service | Parts | Rental | Sales
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BETTER RENTAL SOLUTIONS. From the Region’s Largest Construction Equipment Dealer Network. Williston
MONTANA
15
Minot
Missoula
Bozeman 90
MINNESOTA Duluth
Fargo Tractor Fargo
Bismarck
Dickinson Titan Rentals Helena
Big Sky
Grand Forks Crookston
NORTH DAKOTA
Great Falls
Mandan (Twin City Imp) Billings Titan Rentals Billings
Aberdeen (HC Clark Imp)
Aberdeen
Rogers
29
WISCONSIN Twin Cities 9
Rapid City
Gillette
WYOMING
Shakopee Rosemount Marshall
SOUTH DAKOTA
Sioux Falls
25
NEBRASKA
Des Moines Cheyenne
Kearney Fort Collins
Lexington Windsor
Grand Island
9
Lincoln
39
39
Center Point 80
Omaha
North Platte
LaCrosse
Clear Lake
Sioux City
80
COLORADO
Albert Lea
90
Tri-State Equipment
Casper
Davenport
IOWA
76
Denver 70
Colorado Springs
CASE CE
NEW HOLLAND CE
RENTAL ACCOUNT MANAGERS
NEBRASKA Lincoln
Omaha
Loren Laschanzky
Steve Gosch
Office: 402.464.3711 Cell: 402.202.0387 loren.laschanzky@titanrents.com
Office: 402.733.3700 Cell: 402.690.1191 steve.gosch@titanrents.com
MINNESOTA Duluth
Rosemount
Office: 218.727.3038 Cell: 218.409.4991 johnb.peterson@titanrents.com
Office: 651.423.2222 Cell: 651.829.1545 jason.nordmeyer@titanrents.com
Marshall
Shakopee
Office: 507.532.5783 Cell: 507.829.8815 brian.redding@titanrents.com
Cell: 612.741.5074 tom.deveny@titanrents.com
Rogers
Twin Cities
Office: 763.428.5099 Cell: 763.276.8335 kevin.prodoehl@titanrents.com
Office: 952.445.5400 Cell: 612.390.4138 greg.fecho@titanrents.com
John Peterson
Brian Redding
Kevin Prodoehl
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Jason Nordmeyer
Tom Deveny
Greg Fecho
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NORTH DAKOTA
IOWA
Bismarck
Center Point
Office: 701.250.7925 Cell: 701.595.2903 tim.isaacson@titanrents.com
Office: 319.849.3889 Cell: 319.213.3986 dan.wiley@titanrents.com
Dan Wiley
Tim Isaacson
Clear Lake
Dickinson
Tom Linahon
Tyler Reisenauer Office: 701.227.5309 Cell: 701.590.3236 tyler.reisenauer@titanrents.com
Davenport
Fargo
Chuck Hersey
Bob Brower Office: 701.237.3333 Cell: 701.866.4807 bob.brower@titanrents.com
Grand Forks / Crookston Curt Helgeson
Office: 218.281.4668 Cell: 218.280.3331 curt.helgeson@titanrents.com
Minot
Office: 563.386.0400 Cell: 563.449.6678 chuck.hersey@titanrents.com
Des Moines Adam Krichau
Office: 515.974.5100 Cell: 515.681.2114 adam.krichau@titanrents.com
MONTANA
Big Sky / Bozeman
Todd Rohloff Office: 701.250.7925 Cell: 701.818.0809 todd.rohloff@titanrents.com
Williston
Jeff Petroff
Office: 406.995.2229 Cell: 406.581.1172 jeffery.petroff@titanrents.com
Billings Rental
Bryan Ayers
Office: 701.577.0024 bryan.ayers@titanrents.com
COLORADO
Bob Blackford
Office: 406.656.7368 Cell: 406.671.0702 bob.blackford@titanrents.com
Billings Rental Mike Swan
Fort Collins Jerome Rachuy
Office: 970.484.0508 jerome.rachuy@titanrents.com
Office: 406.656.7368 Cell: 406.671.9885 mike.swan@titanrents.com
Bozeman Dave Dorn
Denver
Don Malone Office: 303.286.7000 Cell:720.402.6346 don.malone@titanrents.com
Office: 406.587.0728 Cell: 406.451.4374 david.dorn@titanrents.com
Great Falls
Ford Gouchenour
WYOMING
Office: 406.453.1405 Ford.Gouchenour@titanrents.com
Casper
Missoula
Dave Thomas Office: 307.682.9742 dave.thomas@titanrents.com
Cheyenne
Donald Hinricher Office: 406.327.6633 Cell: 406.370.9349 donald.hinricher@titanrents.com
SOUTH DAKOTA / IOWA
Joe Taylor
Office: 307.638.4400 joe.taylor@titanrents.com
Office: 641.357.2511 Cell: 641.425.4694 tom.linahon@titanrents.com
Cell: 307.275.0020
Sioux Falls / Sioux City Pat Hoffman
Office: 605.336.3434 Cell: 605.838.9295 pat.hoffman@titanrents.com
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JLG Lift E From the Midwest’s
877-JLG-LIFT | www.jlg.com Service | Parts | Rental | Sales 14
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Equipment Largest JLG Dealer
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ATTACHMENTS FOR ANY JOB
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Un Fit ivers -Up al • La te• M In Sto odel ck
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Do Reduced Tax Depreciations Favor Rentals Over Equipment Ownership? Since 2010, equipment owners have been able to deduct up to $500,000 in depreciation in the year the equipment was purchased. Known as “Section 179 Depreciation” in reference to the IRS code that outlines it, it encouraged business owners to invest in new equipment to reduce taxable income – effectively lowering the cost of new equipment once the tax benefit is factored in to the equation. In 2012 the limit was reduced to $125,000, with the new equipment bonus depreciation rate falling from 100% to 50%. Unless something changes before the end of the year, 2013’s limit will be $125,000 (plus inflation adjustments) with the new equipment bonus depreciation shrinking from 50% to 0%. This can significantly change the cost/benefit decision between purchasing versus rental. Providing contractors were profitable in the 2010-2012 seasons, there was considerable financial gain from purchasing new equipment versus renting or purchasing used. For the current year, the bonus is still 50% capped a total of $125,000. For some customers that still can play a role in deciding between renting and purchasing. Some factors that go into the decision are: • Expected taxable income in the current year. The IRS only allows you to claim deductions equal to or less than your taxable income for the year. Deductions of $80,000 in a year that the taxable income is $50,000 would be capped at $50,000. You are able to carry over the additional $30,000 deduction into the following year. However, deductions taken today are worth more due to the time value of money than deductions postponed to the future. And there is no guarantee that net taxable income in that year will offset the deduction. Therefore future years’ deductions must be discounted
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in value relative to deductions in the current tax year. • The marginal tax rate. For owners that fall in higher tax brackets, the value of taking bonus depreciation is far higher than those in lower brackets. A $40,000 deduction for a contractor in the 35% bracket is worth $14,000. The same $40k deduction for someone in the 18% bracket is worth $7,200. • Utilization of the asset. It may not make financial sense to tie up capital in new equipment that will not be utilized significantly in the near-to-medium term just to take advantage of bonus depreciation. Consider a new $100,000 excavator purchased in 2012. If your tax bracket is 28% and you are able to take full advantage of Section 179 bonus depreciation, the total tax deduction you have to offset the cost of the unit is $100k * 50% * 28% = $14,000. This reduces your effective purchase price of the excavator from $100k to $86k in year 1. You will be able to continue taking depreciation on the unit in the following years but that may only offset the erosion in the actual value of the unit leaving you no farther ahead financially for your considerable cash investment. • Balance sheet. The last recession showed us the truth in the old saying “He with the strongest balance sheet wins”, especially during difficult financial times. If making a purchase to capture bonus tax depreciation benefits significantly reduces your business’s liquidity or markedly lowers the quality of your balance sheet, it’s probably not worth the savings. Don’t risk your business’s longterm health pursuing relatively minor short-term tax benefits. One of the benefits of renting equipment from a financial standpoint is that the rental is 100% tax deductible. Rentals and leases are “off-balance sheet” transactions which do not effect bonding or critical liquidity ratios. Renting equipment also give your business the flexibility to reduce cash outflows if expected work doesn’t materialize or the job finishes early. It’s often the best choice for equipment that does not see a great deal of utilization for most of your work. There is nothing wrong with deciding to purchase or rent equipment. Be aware of the variables that favor one over the other and don’t be afraid of switching your preferred method of procuring equipment when the factors clearly favor purchase or rental. With the US federal budget mired in red ink most industry observers do not expect to see Section 179 deductions approaching the levels of previous years going forward. For contractors who have come to count on the bonus tax provisions to base procurement decisions this is an important factor to consider before committing capital to new equipment purchases. Expect to see an increase in equipment rentals and leases as we move forward into 2013.
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SERVICE ADVANTAGE The Titan Machinery network has the service and parts professionals to keep your fleet running in top shape. Our rental fleet is inspected and maintained on a strict schedule. When a problem does arise on the jobsite, our service department is trained and equipped to handle it quickly and get you running again. Trained, professional, local support backed by the largest network of construction locations in the Midwest – that’s the Titan Rentals service advantage.
34 Construction Locations Factory Trained Service Professionals
24-7 Support 20
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specialty equipment
• Aggregate Equipment • Cranes • Haul Trucks
• Long Reach Excavators • Machine Control - Lasers • Mulchers
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Tractor/Scraper Combos Lowering the Cost of Moving Material
When planning the rental equipment needs for your next dirt, clay or sand moving project, consider the benefits of using a tractor/scraper combo versus motor scrapers or haul trucks. In many conditions tractor/ scrapers not only greatly reduce operating costs, but move more material in a shorter time window. While there are limitations for pull-type scrapers – haul length and large rocks being the two most prominent – typical operating conditions favor tractor/scrapers and more contractors are employing them on their projects. The primary factors that favor tractor/scrapers over other alternatives are:
Cost: The most obvious benefit in pulling pans versus motor scrapers or haul trucks is reduced
operating costs. When measured on a per-yard basis, the cost of moving materials can be significantly lower than with self-propelled scrapers or haul trucks. Besides having a much higher acquisition cost (if owning) or rental cost, self-propelled scrapers have 2 engines and are often accompanied by a pushdozer to assist loading. Fuel costs are much higher with no extra material moved. Loading-out haul trucks typically requires at least two articulated trucks, an excavator, and a dozer at the stockpile area. Again, the investment in equipment is much greater whether renting or owning, as are fuel costs – without the benefit of more material being moved.
Manpower: A self-propelled scraper operating on its own has the same manpower requirements of a
tractor/scraper. Add in a push-dozer and the labor costs double. Operating haul trucks and an excavator requires even more manpower, especially if the material needs to be managed at the dump site requiring a dozer and another operator. Pull-scrapers are self-sufficient in most applications, although sometimes they are used in conjunction with a push-dozer.
Light, Maneuverable Package: In addition to being cost effective and labor efficient, tractor/ scraper are highly maneuverable, with a light footprint that allows them to operate in difficult conditions. Whether pulling 2 smaller pans or one large scraper, tractor/scraper combos are extremely
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maneuverable. They are also extremely effective in wet conditions, offering superior flotation and the ability to fill the bowl with soft or wet material. Pull-scrapers can operate effectively in conditions that heavier trucks and motor scrapers struggle in. With the lighter footprint of a tractor/scraper combo, less damage is done to the jobsite and haul roads in soft conditions – again saving time, manpower and money to maintain.
Efficiency: On short-hauls of 1500’-2000’ or shorter, tractor/scraper combos can move more material
than a motor-scraper or haul trucks. Easy to fill and dump, quick/maneuverable, with a light footprint and the ability to manage the spoil pile without requiring additional equipment, pull-type scrapers are an efficient solution to many material moving projects.
Picking the Right Tool For the Job Conditions at the jobsite will dictate which material moving solution is most economical. In general, long hauls and/or large rocks will favor a self-propelled scraper or haul truck solution. These units are heavier built and have higher top-end speeds for pulling long-distances. And if these units are already part of your fleet and are not being utilized at another jobsite you may decide it is beneficial to get the utilization even at the price of higher operating costs for short jobs. However, in most common material moving applications tractor/scrapers can reduce the cost of moving material by 30%-50% over other methods. Add in the benefit of reduced headcount, less wear-and-tear on the haul roads, and shorter cycle times, it’s an attractive option for moving material that should be given serious consideration for your next job.
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