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O&O Costs: Excavators

August 31, 2008 |

The 20-metric-ton excavator has proven a reliable workhorse and popular machine size for a generation of earthmoving contractors. And as befits a mature machine design, the owning and operating cost parameters are well established. What you pay your excavator operator tops the chart in terms of operating costs, followed by fuel.

While there is not much you can do about the price of labor or fuel, manufacturers are building in a lot of improvements that make these machines less expensive and more productive to operate. The key is to know what costs you can control, keep those to a minimum and then accurately calculate all of your costs to sharpen your bids and improve profitability.

To dig into the details of excavator owning and operating costs we teamed up with two experts from Komatsu America: Chuck Murawski, product manager; and Peter Robson, senior manager tracked products.

Here are their suggestions and some ballpark calculations based on a new Komatsu PC200LC-8 excavator. Keep in mind that the dollar figures here are provided for discussion purposes only. The numbers you come up with in consultation with an equipment dealer should include more personalized information and variables specific to your jobsites and applications.

Komatsu, as well as many other manufacturers, offers a spreadsheet program into which you can plug your numbers and quickly figure out to the nearest dime how much your next machine will cost you to run.

Easy on the fuel
As the pie chart on page 45 demonstrates, operator wages in most cases will be your biggest O&O cost, followed closely by fuel. Just keep in mind that an experienced (i.e. well-paid) operator is an efficient operator. He’ll move more dirt, more productively and likely be easier on a machine as well – not over-revving the engine, stressing the frame or undercarriage or failing to grease the lube points.

Diesel prices are anybody’s guess these days and growing in importance. “People tell me they’re not even sure they’re making money any more,” Murawski says. “The price of fuel used to be a small part of the operating costs. Now it’s huge.”

The severity of the application has a big impact on the amount of fuel the excavator burns and the final operating cost. According to Robson, light applications include things like slope finishing, light material digging and lightweight lifting. Medium applications include excavating, loading and breaker operations. Excavation of hard bank material would fall under the heading of heavy applications.