Cost Comparison of Purchasing versus a Crane Rental Company like Maxim

Medical Center HVAC Crane Rental
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Lifting your Burden

One of the key items on any construction site is a crane. Whether you are building up, down, or both, you will likely need one. You are likely to have a question: do you use a crane rental or should I buy one?  

Crane Selection

There are many types of cranes for different types of uses. Common crane types include; tower cranes, mobile cranes, telescopic cranes, mobile tower cranes, vehicle-mounted cranes, self-erecting cranes, rough terrain cranes, crawler cranes, and the list goes on. 

If you purchase the wrong crane type, it may be useless for some of the projects that you work on. If you use a crane rental company, you don’t have to align contracts with retained resources. Along with selecting the type of crane required, the crane’s attributes will limit its usage on projects. 

Lifting Capacity 

How much is it rated to lift? If the rating is too low, the crane may be useless, yet if you go high, the size of the crane may cause issues onsite footprint and site mobility challenges.

Lifting Range

The reach of the crane will limit the location onsite and the payload pickup and drop-off location.

Lift Angle

The elevation or declination required will affect the lift capacity. 

Work Angle

What area does the crane need to be able to operate in? 

Mobility

If the site is small or the entrance is constricted, some larger cranes will not be able to enter. Mobile cranes may, for example, be switched for self-erecting cranes that have a smaller footprint but require more time onsite to be constructed and disassembled.

Size and Weight

Site access and mobility will be impacted by size and weight. Most cranes may be heavy enough to require site preparation to ensure that it does not sink into soft solid and is on a level base.

Setup Time

The longer anything takes onsite, the more it costs you in terms of project time and resources.

Night Operations

If your crane is working at night, it will need to be quiet enough to stop complaints causing project challenges. 

Downtime, Repairs, Storage, and Maintenance

Cranes are not used 100% of the time on sites and are the reason why people use crane rentals. While this is good for larger construction companies that buy them and move them around different project sites, according to program management, this is major resource waste in smaller companies. Not only is the crane sitting around, but it will also need regular maintenance to stop different systems from failing and needing costly repair. 

Repairs for specialist equipment usually require specially trained technicians that are costly and may in short supply. Due to high demand, parts may also be at a premium cost and take time to source and get onsite—a significant challenge for most businesses that purchase such pieces of equipment.

Maintenance may involve taking the equipment for specialist servicing and certification; another overhead for the buyer even when the equipment appears to be working fine. Furthermore, you will need to dedicate your time to do all this in addition to the projects in hand and future projects on the horizon.

An additional consideration is when not in use, where are you going to keep it? 

Depreciation and Usage

Are you buying a new or used crane? How long, in either case, will it last, and what if you need to sell it after finding out you just bought something you are not using efficiently?   

One major question is how are you going to get the crane to the site? Do you need a flatbed or can it be driven to the site efficiently? How much will it cost in fuel to get it to and from site let alone the cost to power it? 

Purchase vs Rental

Typically, it can cost between $100 to $300 per hour for smaller mobile cranes, and $500 to $1000 per hour to hire larger mobile cranes in general. For tower cranes, you are looking at around $15,000 a month to rent. The great thing is that you don’t need to worry about having a skilled operator in the company; that in itself can be a liability, but also you don’t need to worry about the cost of getting both to the site. As a construction company that runs with non-constant overheads, it makes sense to outsource both the crane and crane operator where possible.  

To get a rough idea about cost, a 75-ton crane costs $185,000 to buy outright. This does not include maintenance, repairs, fuel costs or anything else. Renting one will cost circa $300 per hour. This means it would take approximately 617 hours of onsite work to pay for itself. If 12hr long shifts are conducted it will take circa 51 days of continual use to break even or 102 days at 6 hours of continual use for these smaller cranes. While that does not sound a lot, the real question is how often are you actually using the crane on a project.   

Interestingly survey results in 2019 showed that of all hiring occurring, around 73% is just crane hire without an operator as part of contracted lifts which made up the remaining 27%. Furthermore, the average of the weekly rate as a % of the initial cost for rented equipment ranges between 0.9% to 1.1% for mobile cranes, 0.4% to 0.8% for crawler cranes, 0.6% to 0.8% for tower cranes with an average fleet age of 6.2 years and a range of 2 to 10 years. This means that when you are hiring cranes you are getting modern equipment that is well maintained and used daily, while the break-even on a purchased crane will be based on your usage and compounded maintenance costs on top of a well-run crane.

If we compare the 75-ton crane example with this 10-year renewal above, it becomes highly implausible that the 617 hours of usage will be reached within those ten years. This is coincidently when major overhauls are required on crane equipment due to most having a designed life in service of 10 years and it corresponds to the equipment’s bathtub curve of predicted failure.

Summary

When you start adding fuel, insurance, operators, consistent supply of work, the risk of breakdown and cost of replacement parts ownership becomes a challenge. Unless your construction company has similar projects requiring the same type of crane, the notion of owning one starts becoming more and more problematic to justify. 

For almost all construction businesses, it will be more convenient not to buy what could be a costly liability rusting in your own yard—all while having a huge initial outlay. It makes far more sense to utilize crane rentals.  

Dependable Cranes specialize in providing mobile cranes for contractors and homeowners ranging from 22 to 75-ton lift capacities. If you need a crane, they are large enough to give you the best rental price while supporting your requirements onsite to ensure you’re always working. 

Jared Maxwell

Jared Maxwell

Jared has been a NCCCO certified operator for over 15 years and is a certified lift plan professional. He enjoys spending time with his wife and dogs along with training BJJ.

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