Fleet Managers Shift Spending to Maintenance to Keep Equipment Operational.
In the current situation, the equipment manager has been confused or worried about their fleet budget. The inflation has hit hard to the construction equipment business owner. The rate of inflation and high prices have constantly increased somehow put in a difficult situation for the managers and owners. Since the construction equipment manufacturer produces new models and advanced designs each passing day. It is also the requirement of the owner to use upgraded models in the construction projects. However, the current budget is not sufficient to acquire such advanced models which is why most contractors increased the budget of equipment.
A survey has been conducted on the recent inflation and the market fluctuation. A number of respondents had a similar point of view, either they are increasing heavy budget by 2025 to acquire new machines or upgrading or maintaining the present equipment range. The second number option is more in flux, most of the contractors out the inflation and raising price ought to maintain the current line up. They upgraded the machines and utilized them on the field with some major changes.
Let’s see the report thoroughly on how inflation has affected the equipment market as a whole and how business owners and contracts tackle the issue.
Current market survey
A large number of respondents in the survey said that they are either saving the budget or increasing it by 2025. In the coming time they see more potential in the construction project and to fulfill such demands they need state-of-the-art equipment. So, it is the long-term investment and plan of acquiring the machines and properly utilizing them when they need them the most.
According to the report and recent survey, inflation and rising prices have been continuously increasing and it is the outcome of the last five to six years. The construction equipment and component prices in the market have jumped 30% since February 2020.
Differentiation in the construction companies
The inflation and current market fluctuation including the rising price badly hit everyone in the market. However, it is more concerning for small businesses, because they are new and they could not meet the pace of current circumstances. Major leading manufacturers or giant production managers may survive or maintain the whole fleet budget but the situation getting worse for the new companies and contractors.
According to a similar survey, only 21% of the small fleet can able to increase their budget or maintenance spending. The construction industry is a large market, a slight economic changes can create a difficult situation for many stakeholders. Fleets that are primarily engaged in heavy construction or material production—47% of heavy fleets and 50% of material production fleets—are additionally investing more in maintenance.
The problematic situation for construction companies
Mega construction equipment manufacturers like Case Construction Equipment, Volvo CE, Lirbher, and John Deere such companies can easily pace the ongoing situation. Nonetheless, a few fleets find themselves in a problematic situation and cannot manage the current condition or turn themselves from purchases in order to adjust.
These companies have mostly low budgers and with current inflation it is they to adjust their fleet and operations. Five percent expect leasing, and little less than 18 percent say they would prefer rent to purchase.
Increased spending on maintenance
It is obvious since, most of the managers, stakeholders, and companies can afford to acquire the new machines. So, they increase their spending, particularly on the maintenance and repair side. This could be very helpful for them for the time being, to tackle the inflation period. There are other many advantages to adopting this strategy of increasing the budget for maintenance.
The first main benefit is the extended life of the machine, the routine maintenance can be long-term beneficial for the machine. Secondly, they do not require a new workforce they can utilize their experienced operator who knows how to run the machine on the field.
Additionally, the used equipment for sale is easily available, they can get the required equipment according to the budget and the project. Apart from that the used equipment increases productivity. Regularly maintaining them and checking them can reduce the running cost and save the owner from any additional charges.
Importance of data in machine’s maintenance and health
If one way is close, surprisingly the many others open. One can wise to utilize them and learn even from the difficult conditions and turn the situation in one favor. That’s what most managers and companies are doing, using data to check the maintenance timeline and transform it accordingly. Since the companies could not afford to add new machines they can use the data of the machines for their maintenance purpose.
According to the survey, only one-third of the respondents show a positive sign and say that they are using machine data and performing maintenance processes. Surprisingly, the percentage increased as the inflation high. This particular thing could be a game changer furthermore it will change the course of the current situation, especially for small businesses in construction equipment.
Role of dealers in fleer management
Not only the owner and contractor are involved in the fleet management, acquisition, and maintenance process but also the dealers can play an important role. They are the mediators sometimes they can manage the whole process of management operational side. They can create partnerships, collaboration, and other channels for the fleet management process.
Similar to previous years, over half (47%) of respondents thought the service and assistance provided by their primary equipment supplier was great, while fewer gave it a “good” grade. The percentage of those who rated their dealer as fair or poor remained at 9%.
Conclusion
Many construction businesses are reviewing their budgets and putting more emphasis on maintenance. This is because to extend the life of their current machinery in light of inflation and rising equipment expenses. Smaller organizations frequently find it difficult to keep up with growing expenses, whereas larger corporations are better equipped to handle these difficulties.
Many are relying on dealer partnerships for assistance and investing in data-driven maintenance plans in order to adapt. Despite economic difficulties, these modifications enable businesses to continue operating, optimize the use of their equipment, and sustain production.
