Owning and operating costs

From the tracks up everything is straightforward, but the key to knowing your costs is to choose the undercarriage wisely.

The bulldozer’s job is simple, but its brute power requires some finely detailed accounting if you want to maximize the work and minimize the cost. At the heart of this complexity is the undercarriage. It starts to self destruct from the moment it first rolls forward. Armed with this knowledge and the ability to spec the right undercarriage for your conditions, you’ll be way ahead of the pack.

To dig into these details we interviewed Dan Drescher, product marketing manger for crawlers at John Deere Construction & Forestry. He recommended we use a new John Deere 650J dozer for our example. This is a 20,000-pound machine (approximate) with a 99-horsepower engine and hydrostatic drivetrain and represents a well-populated segment in the market. Deere’s original JD750 introduced the first hydrostatic drivetrain to the U.S. market, but since then hydrostats have been added by most major OEMs, making this a representative machine.

The annual hours and typical lifecycle on this size dozer have gone up in the past few years, Drescher says. “It used to be 1,200 hours a year, now it’s closer to 1,500.” For our example we pegged it at five years and 1,500 hours a year.

This size machine with a cab, ripper and standard track specs at around $115,000 to $125,000 depending on options. For our sample machine we used $124,000 as our purchase price. To outfit this machine with low ground pressure track (LGP) adds about $20,000. If you skip the cab in favor of a simpler roll-over protective structure (ROPS) you save $7,000 to $10,000.

The choice of LGP or non-LGP depends on your soil conditions. The market nationwide is split about 50/50, Drescher says. LGP track is essentially wider than regular track, which improves flotation and lowers ground pressure, but it puts more metal on the ground and it requires beefier components to stand up to the increased side-to-side forces. LGP undercarriages get you more traction in soft soils. In rockier soil narrower gauge track is a must. Determining the right track for your applications is something you need to work out with your dealer.

Track width aside, you also need to estimate the severity of your applications to get an accurate accounting of how long it will take your track components to wear out. On our Additional Cost Considerations charts on page 25 we’ve provided figures for the track costs per hour in low, medium and highly abrasive conditions for both types.

One final variable to consider in tabulating your undercarriage costs is the improvements many OEMs have made in creating long-life track components. Deere offers three undercarriage systems. We used the standard, no-frills undercarriage for our primary calculations, but if you routinely encounter harsh conditions you may want to consider something like Deere’s SC2 slurry-coated bushings which extend the life of the bushings before you have to turn them and more closely match the life of the other undercarriage components. “In severe applications we’re seeing a 25 to 30 percent operating cost benefit with the SC2 bushings,” Drescher says. The company is also implementing a new “maximum life” undercarriage system with larger wear surfaces on all the components, including rails, rollers and idlers. “We’re able to take the entire system out to a higher hour level,” he says.

The more robust components aren’t necessarily for everybody. “If you’re in average or low external wear conditions you wouldn’t get as much benefit,” Drescher says. That’s why it’s imperative you discuss these variables with your dealer and fine-tune your cost benefit calculations accordingly. But in high external wear conditions the more durable undercarriage components will save you money and cut downtime by allowing you to do most undercarriage repairs simultaneously, rather than in two separate operations.

Resale value
Everybody manages their fleet differently and the sweet spot for a trade-in time can be a moving target, Drescher says. In today’s market used equipment prices are down, but it’s a buyer’s market for new equipment as well. “Depending on your business outlook, you’ll age your fleet a bit more when the work picture isn’t as robust as it might be and you don’t know if you can justify a new machine,” he says.

That said, Drescher recommended five years as a good trade in time. “At that point you’ve got decent resale value in it but you’ve gotten good utilization out of it as well.” In average conditions a five-year-old dozer in this class should bring between $36,000 and $40,000.

Also keep in mind that interest rates may be a factor. Currently, they are low. To be on the safe side, we stayed conservative and used a 4 percent figure, but you can sometimes find better deals. There are even a few zero interest for 36 month deals available, subsidized by the dealer or OEM financing arm. “If you’ve got the work, it’s a good time to buy something,” Drescher says. Just a few years ago, 6 to 8 percent financing was more typical.

Fuel costs
Our Additional Cost Considerations chart on page 25 lists fuel costs for low, medium and high loads. This is a detail you should not overlook or guesstimate as fuel costs typically comprise the biggest part of your operating costs after wages. And keep an eye on the price of diesel. We put it at $3 a gallon now, but this time last year it was over $4.50 a gallon.

The costs of preventive maintenance were figured from statistics compiled by industry distributors. We included labor costs in these figures, which you may want to modify if you have your own mechanics or do the work yourself. For operator wages we pegged it at $40, which includes taxes, benefits and insurance, but this varies widely from state to state.