Cost of operation?

JoshA · Sep 6, 2015

Recently purchased a 74hp CTL; 10,800lbs with an operating capacity of 2,600lbs.

I've used many skid steers over the years but this is the first purchased, trying to figure out the cost of ownership. I recognize of course this depends on the application and rate of depreciation, but I'm sure most of you have a number in mind of what it costs per hour, something to base a rate off of. What are factors you include in this calculation?

My first guesstimate before getting into it is roughly $50/hr, considering fuel, fluids, undercarriage, upkeep, depreciation, but no labor.

Would love to hear your thoughts and wisdom!
Thanks,
-Josh

movindirt · Sep 6, 2015

74hp at 10,800 lbs??? That Hp to weight ratio seems way off. What make and Model of machine is it? That will help quite a bit lol

JBGASH · Sep 6, 2015

I would agree with 50 per hour on a CTL, they are very costly to keep running especially in the under carriage area. I think they could be the most expensive piece of equipment I own to keep running .

Shimmy1 · Sep 7, 2015

Sounds like a Deere 323, Cat 279, Bobcat T650, Kubota SVL-75, etc, etc. The HP is correct with a rated load of 2600 lbs, but the gross weight is off.

mountainlake · Sep 7, 2015

Sound like a Volvo MCT125c, hp and capacity are both way under ratred. I've picked up a 5500# log and it pushes like a bull dozer. How you run them will make a big difference in operating cost as with any machine. If you are hard on them they will be hard on your checkbook. Back in the trucking business the ones that drove hard had their trucks parked in font of the garage a lot.

grandpa · Sep 7, 2015

I can tell you one thing, if your going to operate it in aggregate, you better double your initial cost.

JoshA · Sep 7, 2015

Mountainlake got it right; it's a MCT125C, though I'm not positive how that matters, something I'd like to see compared for all brands, from what your own experiences are.

My plans for it first off will be snow removal given the upcoming season. Otherwise mostly just grading, backfilling, and whatever attachment I rent for the odd job like a trencher or mower.

"how you run them will make a big difference ", okay, sounds about right, so tell me - how should I run it to make it last the longest?

Thanks again,
-Josh

JNB · Sep 7, 2015

Keep your undercarriage cleaned out (especially around the drive motors behind the sprockets). Make three-point turns, don't spin your tracks and keep them adjusted. A tad loose is better than too tight, especially in sand or any other abrasive material. Push material with the full length of the tracks on the ground to avoid wearing out the rear idlers.

Flip up your cab and make sure no hoses are rubbing anywhere, and that includes any lying in the belly of the machine. You're better off sleeving anything you can get to before a problem surfaces. Use zipties on anything that needs it too. I also change my final drive oil every 200 hrs. and suggest going to a good synthetic at the first change. Those suckers are flippin' expensive!

TriHonu · Sep 7, 2015

The US Army Corps of Engineers published EP 1110-1-8 Construction Equipment Ownership and Operating Expense Schedule.

It is a document that describes how to calculate owning and operating costs for all types of construction equipment. The document is tailored to regions of the US, but should give you a good starting point.

While it won't just provide you an answer, it will provide the framework explaining what things must be evaluated to arrive at your costs. As others have stated, the operators actions have a huge impact on your actual costs...

A lot of the document is an extensive list of reference tables for different pieces of equipment. The beginning of the document explains the basic principles and calculations. This will give you a baseline however you will need to adjust it based on your actual costs.

KSSS · Sep 7, 2015

I think what is interesting on CTL's is the first 1000 hours are really in my experience pretty low cost, considering no flat repair perhaps even cheaper to run than are tires. However the next 1000 hours are when the "Piper is paid" so to speak. At just over a grand I have had to replace an idler and as JNB did, I need to start looking at tracks in the next couple hundred hours. I am religious about changing out that final drive oil. So if your buying new the costs are back loaded, if your buying used you may get to start paying for your privilege of running tracks immediately depending on hours and condition. I imagine that I will start going through more idlers and if I keep it long enough, the finals.

Shimmy1 · Sep 7, 2015

**deleted**

mountainlake · Sep 8, 2015

JNB said:
Keep your undercarriage cleaned out (especially around the drive motors behind the sprockets). Make three-point turns, don't spin your tracks and keep them adjusted. A tad loose is better than too tight, especially in sand or any other abrasive material. Push material with the full length of the tracks on the ground to avoid wearing out the rear idlers.

Flip up your cab and make sure no hoses are rubbing anywhere, and that includes any lying in the belly of the machine. You're better off sleeving anything you can get to before a problem surfaces. Use zipties on anything that needs it too. I also change my final drive oil every 200 hrs. and suggest going to a good synthetic at the first change. Those suckers are flippin' expensive!

Good post, really watch those turns, spinning them around in their own length will wear everything fast.

JoshA · Sep 9, 2015

TriHonu said:
The US Army Corps of Engineers published EP 1110-1-8 Construction Equipment Ownership and Operating Expense Schedule.

It is a document that describes how to calculate owning and operating costs for all types of construction equipment. The document is tailored to regions of the US, but should give you a good starting point.

While it won't just provide you an answer, it will provide the framework explaining what things must be evaluated to arrive at your costs. As others have stated, the operators actions have a huge impact on your actual costs...

A lot of the document is an extensive list of reference tables for different pieces of equipment. The beginning of the document explains the basic principles and calculations. This will give you a baseline however you will need to adjust it based on your actual costs.

Though I haven't found the section yet for tracked skid steers (it will take me days to get through it), that resource is quite a wealth of information - thank you! As you said however, I will have to adjust it based on my costs, which as of yet I don't really know.

KSSS said:
I think what is interesting on CTL's is the first 1000 hours are really in my experience pretty low cost, considering no flat repair perhaps even cheaper to run than are tires. However the next 1000 hours are when the "Piper is paid" so to speak. At just over a grand I have had to replace an idler and as JNB did, I need to start looking at tracks in the next couple hundred hours. I am religious about changing out that final drive oil. So if your buying new the costs are back loaded, if your buying used you may get to start paying for your privilege of running tracks immediately depending on hours and condition. I imagine that I will start going through more idlers and if I keep it long enough, the finals.

Interesting perspective, kinda what I thought too when I was looking. Parts for these undercarriages are attrocious, as is the short life span. I bought machine with 350 hours and everything so far appears to be in good shape, I'm hoping that with a little bit of care I can extend the piper-paying period into perhaps 1,500hrs instead.

JNB said:
Keep your undercarriage cleaned out (especially around the drive motors behind the sprockets). Make three-point turns, don't spin your tracks and keep them adjusted. A tad loose is better than too tight, especially in sand or any other abrasive material. Push material with the full length of the tracks on the ground to avoid wearing out the rear idlers.

Flip up your cab and make sure no hoses are rubbing anywhere, and that includes any lying in the belly of the machine. You're better off sleeving anything you can get to before a problem surfaces. Use zipties on anything that needs it too. I also change my final drive oil every 200 hrs. and suggest going to a good synthetic at the first change. Those suckers are flippin' expensive!

I wondered about that, making 3-point turns vs making long sweeping curves? I figure if the ground is getting torn up, so is the undercarriage; no matter whether its scuffing or digging or rutting.

That is a great idea about flipping the cab up to check any rubbing wires or hoses, not something I'd have considering doing until after something went wrong, so thank you.

I see everyone is a bit shy on this one, I don't share much because I don't feel I have much to contribute, but I enjoy and learn a lot out of reading your posts.

I havent seen anywhere yet where it has been discussed about track tread types, mine has the wavy bars, rather than the opposing "][" style, I felt this would offer less traction in mud, but a better versatility over all, especially in the winter and on turf.

Thanks again,
-Josh

movindirt · Sep 9, 2015

So its going to cost you $50,000 to run that CTL for a 1,000 hrs. Fuel is going to account for roughly 20% of that $50k. so oil changes and other service work + any undercarriage work adds up to $40k a year? If you're not accounting for labor I don't see how it could be so high.

JoshA · Sep 10, 2015

movindirt said:
So its going to cost you $50,000 to run that CTL for a 1,000 hrs. Fuel is going to account for roughly 20% of that $50k. so oil changes and other service work + any undercarriage work adds up to $40k a year? If you're not accounting for labor I don't see how it could be so high.

When you put it that way it sounds high, so help steer me right direction.

I'd expect $15/hr fuel cost, undercarriage at $10/hr, oil&filters? Depreciation at..? misc parts for repairs(Break down or damage)? I'd say that closes in on $40-50/hr all said and done, depending on each machine and application.

lumberjack · Sep 10, 2015

I have a Kubota SVL90-2.

Fuel, 4 gallons/hour, currently $2.1/gallon= $8.4/hr
Depreciation, 3k hour life, $10k residual, $20/hr
Fluids/Filters/Greasing, $1.5/hr
Undercarriage, $8/hr
Incidental damages, $5/hr.

Total of $42.90/hr.
My average fuel burn is less than 4gph.
I'll sell before I get to 3k hours and it should be worth $20k then, hopefully more.
$24k to get 3k hours. 3 sets of tracks is $9k, $3700 replaces all the rollers, $1400 buys 4 sprockets, and that still leaves nearly $10k for the 4 idlers and final drives.
Incidentals happen. In nearly 250 hours I've broken the front glass and replaced it with lexan. The lexan has been replaced once and will be replaced again soon. The 3 pieces of lexan cost $200 leaving ~$1k in the oops category.

But, I'll likely sell it before it gets 1k hours on it. At my current rate of usage 1k hours would be paid off plus 9 months. As work ebs and flows I change my equipment. I also have an equipment dealership (not Kubota though) which I run into good deals with (buying or selling). If the machine stays suitably busy until it gets paid for and there isn't a machine I want more, I would likely keep it. If someone makes a 140hp, 14klb+ CTL... I'd be hard pressed not to get a case of the wants.

Another note, some work is harder on machines than others. Dirt work is easy on the machine by comparison to demolition and mowing/mulching for example are harder. Pushing up fires is tough on air filters. My hourly rate varies somewhat depending on what I'm doing. Demolition and mowing (Ground Shark) are both $50/hr higher than my base rate. Demolition is hard on the tracks and the paint, mowing is harder on the tracks plus the $11k attachment and its maintenance.

JNB · Sep 10, 2015

You've got to love a numbers guy. Thanks for the rundown. :thumbsup

JBGASH · Sep 10, 2015

Looks like it is pretty close to that $50/hr rate any which way you stack it.

lumberjack said:
I have a Kubota SVL90-2.

Fuel, 4 gallons/hour, currently $2.1/gallon= $8.4/hr
Depreciation, 3k hour life, $10k residual, $20/hr
Fluids/Filters/Greasing, $1.5/hr
Undercarriage, $8/hr
Incidental damages, $5/hr.

Total of $42.90/hr.
My average fuel burn is less than 4gph.
I'll sell before I get to 3k hours and it should be worth $20k then, hopefully more.
$24k to get 3k hours. 3 sets of tracks is $9k, $3700 replaces all the rollers, $1400 buys 4 sprockets, and that still leaves nearly $10k for the 4 idlers and final drives.
Incidentals happen. In nearly 250 hours I've broken the front glass and replaced it with lexan. The lexan has been replaced once and will be replaced again soon. The 3 pieces of lexan cost $200 leaving ~$1k in the oops category.

But, I'll likely sell it before it gets 1k hours on it. At my current rate of usage 1k hours would be paid off plus 9 months. As work ebs and flows I change my equipment. I also have an equipment dealership (not Kubota though) which I run into good deals with (buying or selling). If the machine stays suitably busy until it gets paid for and there isn't a machine I want more, I would likely keep it. If someone makes a 140hp, 14klb+ CTL... I'd be hard pressed not to get a case of the wants.

Another note, some work is harder on machines than others. Dirt work is easy on the machine by comparison to demolition and mowing/mulching for example are harder. Pushing up fires is tough on air filters. My hourly rate varies somewhat depending on what I'm doing. Demolition and mowing (Ground Shark) are both $50/hr higher than my base rate. Demolition is hard on the tracks and the paint, mowing is harder on the tracks plus the $11k attachment and its maintenance.

rkf63k10 · Sep 10, 2015

I'm just starting my business. I've been doing a lot of research on operating cost. I'm going with a cat 236d closed cab. My figures came to $75/hr. I'm counting insurance and financing and all, unless I'm figuring wrong?

lumberjack · Sep 11, 2015

You don't count payment and depreciation together. Insurance is a good thing to figure in, but it's a fixed cost not hourly (same as the payment) and thus isn't part of the "operation" budget so to speak (it's in the overhead with the payment).

I use the deprecation figure to see if I need to make an extra payment. For sake of easy math, say $20/hr in depreciation $1400/month payment. Again for easy math, say $100 of that is interest, $100 is insurance, leaving $1200 for principle. With $20/hr in depreciation and $1200/month in principle, you can put 60 hours per month on it. If you get busy and are putting 90 hours a month on it, you need to make an extra payment every couple months.

On my machine, my average usage is way below what the principle covers on deprecation. In 17 months I've paid ~$17k of principle off and put ~239 hours on the loader. That's $71.13/hr... it may be cheaper to rent rather than own at these usage levels, depending on your business model. In 17 months I've paid enough principle to be at 850 hours, assuming the 3k hour life and $10k residual from above.

I'm not an accountant by any means.... it just makes sense to me like this.

Cost of operation?

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