In a recent post, we covered Ernst & Young's latest Australian Yellow Goods report which valued excavators, haul trucks, dozers and loaders in today's mining and construction current climate. So while there are recovery signs in construction, the mining sector tells a much bleaker story. Here are 11 reasons why. According to EY's report, the major influences on the market for and values of second-hand yellow goods have been:
Sustained low commodity prices, especially in iron ore and coal, have seen a number of mines being placed on care and maintenance. While overall product levels of iron ore have increased, EY confirms that these increases are mainly caused by the major high volume low cost producers.
This situation has placed significant pressure on smaller higher cost producers and has resulted in a significant reduction in the need for load and haul fleets. In turn, this has led to rental and contract fleet service contracts being terminated as well as owner miner fleets being either partially or wholly parked up.
It's estimated that anywhere between $600m and $1bn of equipment is currently unitilised and possibly significantly more. Alarmingly, one market participant reported an estimated 1,500 haul trucks idle in QLD alone.
If you're considering capacity utilisation strategies for your fleet, it's worthwhile to know what other equipment suppliers are saying. After all, you don't buy a car without knowing the specs and you don't see movies that friends have panned. Check out these case studies from a handful of our suppliers and discover more about solutions for your business.
Your fleet forms the basis of your construction company’s operations and productivity. The entire company rely on this equipment and tools in order to finish projects efficiently. What a lot of contractors don’t realise is that their machines are slowly deteriorating without them noticing.
People sometimes assume that when it comes to access equipment, their best option is to buy the machines outright even though it might be easier to hire them. The choice of whether to hire, hire-to-buy or buy depends on the individual project needs and circumstances, but it’s worth examining the benefits of equipment rental or long-term leasing before finalising any decision.
Running an equipment hire business is not as simple as buying several equipment and hiring them out. A good and reliable supplier should have a well-maintained fleet to ensure that hirers will not face a breakdown or possible accidents while using the hired machinery.
Formerly known as the PlantMiner blog, Felix Project News is Australia's top 10 Construction blog.
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