Down Market Expected to Rise for Mid-sized Excavators

Feb. 22, 2017

The market has been down, or soft, for the 40,000-60,000-pound-excavator size class but there’s optimism among manufacturers who are betting on the integration of more cost-saving features, such as a variety of work modes and idle-limiting technology, to help lure customers to more expensive Tier 4-Final models.

“This crawler excavator size class has traditionally been one of the most popular in the construction market segment,” says Aaron Kleingartner, sales and marketing development manager, Doosan Construction Equipment. “Demand for excavators in this size class softened slightly in 2016, but we expect demand to increase in 2017, especially in infrastructure projects and commercial building developments,” Kleingartner says.

“With more home starts, there is more work being done in this size class,” says Matt McLean, product manager, Volvo Construction Equipment. “And, while all are obviously waiting to see how things shake out on the infrastructure funding, there is anticipation that all size classes may experience some growth.”

Tyler Peterson, JCB excavator specialist, asserts that the 40,000-60,000-pound excavator market is down similar to the overall market for larger excavators. “Many factors contribute to the market decline, most notably the large supply of used machines and a reluctance to buy machines that are required to meet Tier 4-Final emissions regulations,” Peterson says. “These new emissions regulations have contributed to large increases in machine prices. It also introduced new technology and new maintenance procedures to which fleet managers and owner/operators aren’t accustomed.”

In industry analysis released in 2016, EquipmentWatch found that although Tier 4 adoption is growing slowly, the incidence of Tier 4 equipment remains quite low, with 40 percent of contractors reporting that Tier 4 iron comprises less than 20 percent of their fleet. Construction Equipment’s own Annual Report & Forecast survey (January issue) backs this up— one in four equipment purchasers who responded to the survey said they are not yet buying Tier 4-F machines, and only 8.6 percent said they are generally prepared for the equipment. Initial cost, and maintenance concerns, are cited most.

Manufacturers are pushing more fuel efficiency and lower ownership costs as benefits of the technology they are putting in excavators (and other equipment). Whether it will be enough in the minds of managers to mitigate acquisition costs and boost the Tier 4 presence in their fleets in the short term remains to be seen.

Once owners decide they are in the market for the size class and are comfortable with Tier 4-Final, there are a number of important buying considerations.

Cost of Ownership

Size class (MTons) Avg. price Hourly rate*
16.1-19 $197,476 $77.49
19.1-21 $220,291 $80.32
21.1-24 $242,579 $87.72
24.1-28 $277,057 $99.42

*Hourly rate represents the monthly ownership costs divided by 176, plus operating cost. Unit prices used in this calculation: diesel fuel at $2.30 per gallon; mechanic’s wage at $56.67 per hour; and money costs at 1.875 percent.

“Consider the compatibility with existing fleet and support equipment, and know your application and production requirements,” says Kurt Moncini, senior product manager, Komatsu. “Also, realize the transportation considerations, such as maximum load limits.”

Peterson also keys on transportation requirements. “Federal law states transportation permits are required for load widths above 8 feet 6 inches and/or weighing over 80,000 pounds—once you take the tractor trailer into account,” Peterson says. “Our narrow long carriage models have a narrower undercarriage allowing the machine to be transported without a permit.”

Kleingartner stresses that machines in this excavator size class may require a review of local transportation regulations.

“A machine with a smaller operating weight can generally be hauled by operators with a different CDL level, as well as different weight rating requirements, permitting, and more,” Kleingartner says. “Note that transportation requirements may vary by state. It is always best for excavator owners to check with local authorities to confirm the transportation requirements in a particular area.

“And managers should consider how the machine will be moved from project to project,” Kleingartner says. “The 40,000-60,000-pound weight range is still in a sweet spot where the excavator can be transported on one truck and trailer as a complete unit, rather than separating the excavator, counterweight, and attachments, for example.”

Mark Wall, excavator product marketing manager for John Deere and Hitachi stresses the basics, including a nod to transportation. “The most important question to ask yourself is what application you’re going to put the machine in. That includes determining what you need to lift, how deep you need to dig, if you need multiple buckets, and whether you’ll need a coupler or auxiliary hydraulics,” he says. “Another thing to keep in mind is how big the truck is that you will use to transport the excavator. Are you using a three-axle trailer or do you have a semi? Finally, will you be working in a confined area? If so, reduced tail swing will be important.”

Once in the fleet, the focus becomes keeping costs down. Managers should pay attention to maintenance, of course, and what goes into the excavator, as well.

“Grease the machine, and use clean, high-quality fuel,” Moncini says. “Also, monitor the water in the primary fuel filter water separator and take corrective action if water is found in the fuel. Use dedicated DEF containers, use high-quality DEF, and prevent DEF system contamination.”

Wall also addresses maintenance—and water. “It pays to conduct routine maintenance on your equipment, especially with the large variety of attachments and applications that are available in the marketplace these days,” he says. “One example is draining the water off the fuel tank. Today’s emissions-compliant engines use fuel to cool components. Warm fuel in the tank on cool days could result in condensation in the tank. It’s important to drain the water from the tank per the manufacturer’s recommendation and fill the tank at night to help prevent condensation. This will help the machine run better and leads to longer fuel life.”

Volvo’s McLean hits upon training as a cost-saver. “One of the best ways managers can help keep operating costs down is to ensure operators are properly trained on work modes available within the machine. For the vast majority of jobs, operators won’t need to use the highest power available in the excavator. This can conserve an incredible amount of fuel, and, with diesel costs on the rise again recently, that’s an input cost that can make a real difference to the bottom line,” McLean says.

“It is important to remember to set up the excavator in the proper work mode to optimize the machine to its best capabilities,” Kleingartner says. “For example, when the operator is digging or trenching, make sure the machine is set in the proper work mode. In addition, the operator should set the excavator in the proper power modes to maintain the most efficient use of the machine at that time and minimize idling of the equipment.”

Indeed, multiple work modes have become very prominent on most newer pieces of production equipment. But not everyone’s embracing them, and that can cost managers money.

“There’s a strong tendency for operators to want to go full throttle on jobs in an effort to get the highest power,” McLean explains. “The assumption is the higher the rpm the higher the productivity, but that’s not always the case. For instance, Volvo work mode’s strongest mode is the Heavy mode. But the General mode—one setting down from Heavy, will meet the power required on 90 percent of job sites.

“And just that one step down in power will conserve up to 10 percent fuel. Within General mode, there are four choices to fine-tune the machine to the type of work being done—giving the operator even more control. The best way to rectify this common mistake is to ensure proper operator training and understanding about the differences between the work modes, not only giving them a feel for the power that can be produced at a lower setting, but also helping them understand what that change in power equates to in terms of fuel efficiency, and reduced wear and tear on the machine,” McLean says.

John Bauer, brand marketing manager, Case Construction Equipment, agrees.

“There is still a mentality among some operators to run the machine wide open at all times when, in reality, the operator can run at a less intensive operating mode while still performing the same task with the same level of productivity. This saves fuel, reduces wear and tear on the excavator, and relies on the engineered momentum and movement of the machine instead of an overzealous operator pushing a machine to its limits for no reason,” Bauer says.

Wear and tear is another issue Bauer talks about. “Take care of that undercarriage. Bulldozers get an unfair amount of the attention as it relates to undercarriage care because of the perceived load put on the tracks as it’s pushing earth, but excavator tracks are prone to similar stresses, especially if the operator is incorrectly digging over the side of the tracks or over the idlers,” Bauer says. “Keep on top of track maintenance, upkeep, and cleanliness.”

In addition, managers should be aware of how the undercarriage is used and oriented once on the job. “It’s important to always operate with the sprockets towards the rear of the machine,” Wall says. “It can be convenient to position sprockets towards the front because then you pull the hands towards you to move forward, which can be easier. However, this practice can shorten the life of the undercarriage.”

Proper bucket selection also warrants attention, and don’t forget craning and lifting capabilities.

“Operators should realize the importance of bucket selection to each job they are working on,” says George Lumpkins, national service manager for Kobelco. “It’s important to ensure that the bucket being used is the one that is best-suited for the work at hand. A bigger bucket may move more material, but it will also slow the machine down in the process.

“Similarly, quick couplers may allow for operators to more easily change buckets, however digging force will ultimately be sacrificed,” Lumpkins says. “Users should also know and understand the lift chart. Lift charts vary for different arm lengths and sometimes boom lengths. Make sure a machine’s chart matches the equipment on the machine.”

Another item manufacturers point to as a potential costly mistake is not using telematics data or other available technology beyond that of work modes.

“We see contractors ignoring telematics data,” says JCB’s Peterson. “This data can be used to monitor and reduce fuel consumption, preplan maintenance in-between jobs, and warn fleet managers of potential problems.”

“Many of the OEMs, including Case, are essentially offering it free now,” says Case’s Bauer. “If it’s free, it makes sense to use it. Once fleet managers and equipment owners see the data a telematics system provides, and the simple inferences they can make from that data to improve their operation, they’ll begin to see benefits immediately. This can include identifying excessive idling, or unproductive workers, or machines running at parameters that might indicate a problem either with the machine or the operation itself.”

Though in most instances it’s not free, contractors can see big benefits from another underused resource—machine control.

“Don’t be afraid of machine control,” Bauer counsels. “We often tell equipment owners that they don’t have to dive in immediately with advanced 3D and 4D systems. A simple 2D machine-control system can significantly increase an operator’s productivity and the safety of field staff by not requiring an employee to be checking grades down in the hole. This makes the machine more profitable, and allows you to deploy that other employee to other profitable work on the job site.

“We’ve seen owner/operators who dig foundations hours faster than they could before simply by using a 2D system, which allows them to get onto the next task that much faster,” Bauer says.