The choice between hiring or buying plant machinery in construction can significantly impact the success and profitability of the project. Plant machinery plays a vital role in ensuring efficient and timely project completion, however, making the right decision requires careful consideration of various factors. In this blog we will explore the advantages of hiring plant equipment, from the cost of hiring vs investing in plant equipment to the capacity and flexibility of hired-in plant equipment, we will also dive into the potential disadvantages; including reliance on external suppliers and factors to consider including project duration; to provide a balanced argument so that you can make a more informed decision on your next project.
Advantages of Hired-In-Plant Equipment for Long-Term Construction Projects
In construction projects, opting to hire plant equipment brings a range of advantages when compared to investing in your own equipment, hired-in plant equipment provides a cost-effective solution, especially for shorter-term construction projects, allowing companies to allocate their financial resources more efficiently. Rather than making a substantial upfront investment to purchase the required machinery, companies can pay rental fees over the project’s duration, improving cash flow, and enabling better budget management.
Secondly, hiring plant equipment provides access to a wide range of equipment options. Construction projects often demand specialised machinery from bulldozers and excavators to machinery for smaller tasks. Furthermore hiring plant equipment offers the flexibility to upgrade or switch machinery as project needs evolve. By opting to hire, constructors gain the advantage of choosing from a diverse selection of equipment tailored to their specific project needs, and If the project needs shift or new equipment becomes necessary, contractors can easily upgrade or switch to different machinery without the financial burden of selling or disposing of owned equipment. Equipment rental companies typically offer an extensive inventory, encompassing excavators, bulldozers, cranes, concrete pumps, and more. This variety empowers contractors to select the right equipment for each project stage, ensuring optimal productivity and efficiency.
Additionally, hiring plant equipment reduces maintenance and repair responsibilities. Rental companies typically handle routine maintenance, servicing, and repairs of rented machinery, therefore relieving contractors of the lengthy and potentially costly tasks of upkeep and maintaining the machinery, hence saving valuable time, effort, and costs associated with maintenance and repairs. By outsourcing these tasks to the rental company, contractors can focus more on project execution while entrusting equipment maintenance to the experts.
Disadvantages of Hired-In-Plant Equipment
As touched on above there are notable advantages to hiring in plant equipment for construction projects around cost, accessibility, and maintenance. However, it is also essential to consider the potential disadvantages of hired-in-plant before making a decision.
One primary drawback work noting is the potential for higher costs in the future, as we touched on earlier, whilst hired-in-plant brings with the advantage of a short-term cash flow position a huge advantage for short-term projects, the rental fees over a longer period of time can potentially surpass the upfront cost of purchasing the machinery. Hence, it is vital to carefully consider the project duration and compare rental costs against the cost of purchasing outright.
Another disadvantage is the limited availability of rental equipment during peak construction periods. When multiple projects are in progress simultaneously, the demand for specific machinery can exceed supply. This situation can delay securing the desired equipment within the desired timeframe. Proper planning and early booking become crucial to ensure access to the required machinery and avoid project disruptions.
Dependency on external suppliers for equipment availability is also a consideration. Contractors relying on rental equipment must rely on the rental company’s ability to maintain a sufficient inventory and provide timely service. Delays or unavailability of rental equipment can disrupt project timelines and hinder progress. Establishing strong communication channels and maintaining a good relationship with the rental company can help mitigate these risks, but some level of dependency remains.
Factors to consider when deciding to Hire Plant Equipment
As we have touched on a few times throughout this blog the decision to hired-in-plant equipment vs investing in plant equipment comes down to a range of individual factors, with the biggest of these being the project duration, for instance, for long-term construction projects (one that may go on for years) it may be a wise decision to invest in your own equipment, this way direct access to the equipment without going through an external rental company may significantly speed things up, as well as potentially saving significant financial capital.
Another factor to consider relates to the type of equipment needed, as touched on at the beginning of this blog, each piece of equipment has its own unique tasks and responsibilities it can complete, from cranes for heavy lifting to excavators for digging. Plant machinery such as cranes and bulldozers may be wise to hire in from a specialised company focussing on this type of machinery, with likely a substantial initial cost, its likely more cost-effective to hire in. On the other hand excavators and smaller scale machinery that has a smaller upfront cost and may be used for longer over the project duration is likely something that can be invested in.
However, ultimatly the decision comes down to a businesses position and preferences, a smaller company is likely not going to have the financial capital to invest in a wide range of machinery, so hiring is likely the best option, whereas a much larger organisation will likely have more freedom and capital to make a decision based on the factors mentioned above. However, whichever choice is made it is vital to ensure your business’s plant machinery; whether owned or hired-in; is well protected with plant insurance, providing peace of mind over finances but also protecting project effectiveness and reducing downtime.