Operating Costs

Best Practices for Operating Costs

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It's really something, isn't it. I've done a lot of damage to wings over the years, although these newer ones seem to be a lot tougher. And this newer equipment with the newer emissions is enough to give an ulser as well. The 940B I run needed an engine at 1300hrs- machining problems and camshaft hardness issues with the first one. All covered under warranty but it took quite a while to diagnose why it kept shutting down cylinders. The downtime got expensive. The mechanics are always trying to sort out exhaust aftertreatment issues, which I guess is a hassle the transport and agricultural industries have battled too. This year my grader had transmission problems which lead to more downtime. Engine head as well. Fuel costs were way down, but just like you're seeing, everybody's competing (harder then ever) for the same work. I was told that tires now are about $2000 per, and I wonder if the exchange isn't going to send that price higher. It sure did damage to the price of new equipment.

I hear there are massive layoffs in the oil patch. I also saw the news that Quebec wants no pipe line. Pretty hard to sell if you can't get it out of the province. Perhaps Alberta should back out of BC's new dam. Sask potash just closed their new mine here in New Brunswick, another 430 jobs gone plus the spinoff work. This also leaves the province scrambling to find a new source of road salt. The tree huggers want no part of fracking in this province, and have driven the exploration companies out of here, and now Ottawa wants us to take more refugees because Ontario is being over whelmed. I saw a post on FB where an American suggested to bring the refugees here, draft the men into the army, train them, and send them home to fight, and if they win, send their families back to them. I hear you on the new emissions systems. I think starting this year, they all have to have it too. We had a lot of problems with one of our Western star trucks, but a lot of it was lack of operator training. Once a rep from Cummins explained to the driver about keeping the rpm up, and avoid idle time, this summer was trouble free. I have not had any problems with my 940 yet, but she is taking oil. I have been wanting to see if she would seek a level on the dipstick, and stop as some engines do, but the boss's son keeps topping her up. We lost a shore line protection job, just after Christmas, to a new company. We do a lot of that kind of work, and have the proper oversize rock set aside in our quarry. These guys were 30 grand cheaper on a 100 grand job, and they have to buy their rock. How can you compete with that. Word is that they are gonna start bidding water and sewer jobs as well. Might be a lean summer.

When times get tight a lot of company owners think, "Ok, I'm going to lose $100/hr on overhead with everything sitting, so, if I take this job away from the guys that have been doing it, and only lose $50/hr, I'm better off. The guy down the road thinks "I can do it and lose $55, I'm still better off". Then a new startup comes with no idea of his costs, and thinks "I'm small, I don't have a shop and etc. to support; I can do it for 1/3 of the big guys price and get rich!"This continues on and on until there's lots of work again

mitch504 said:When times get tight a lot of company owners think, "Ok, I'm going to lose $100/hr on overhead with everything sitting, so, if I take this job away from the guys that have been doing it, and only lose $50/hr, I'm better off. The guy down the road thinks "I can do it and lose $55, I'm still better off". Then a new startup comes with no idea of his costs, and thinks "I'm small, I don't have a shop and etc. to support; I can do it for 1/3 of the big guys price and get rich!"This continues on and on until there's lots of work againClick to expand...Most of the work here grinds to a stop come mid November. The loaders, and back hoes keep busy with snow removal. Not a whole lot of prep involved there besides winter tires. We have been busy at the government's new payroll office, but besides that the dozers, and the excavators, asphalt plant and crusher stay burried in the snow. Personally I would rather see the grader sit as well. I can't see the little bit of money it is making, out weigh what the salt is doing to it. My bosses hang on to their graders a long time. My last one was a 1990 730A, and the one before that was a 1975 Clark. I'd like to see my 2011 940 stay in good shape, as it will have to take me to retirement.

cuttin edge said:I hear there are massive layoffs in the oil patch. I also saw the news that Quebec wants no pipe line. Pretty hard to sell if you can't get it out of the province. Perhaps Alberta should back out of BC's new dam. Sask potash just closed their new mine here in New Brunswick, another 430 jobs gone plus the spinoff work. This also leaves the province scrambling to find a new source of road salt. The tree huggers want no part of fracking in this province, and have driven the exploration companies out of here, and now Ottawa wants us to take more refugees because Ontario is being over whelmed. I saw a post on FB where an American suggested to bring the refugees here, draft the men into the army, train them, and send them home to fight, and if they win, send their families back to them. I hear you on the new emissions systems. I think starting this year, they all have to have it too. We had a lot of problems with one of our Western star trucks, but a lot of it was lack of operator training. Once a rep from Cummins explained to the driver about keeping the rpm up, and avoid idle time, this summer was trouble free. I have not had any problems with my 940 yet, but she is taking oil. I have been wanting to see if she would seek a level on the dipstick, and stop as some engines do, but the boss's son keeps topping her up. We lost a shore line protection job, just after Christmas, to a new company. We do a lot of that kind of work, and have the proper oversize rock set aside in our quarry. These guys were 30 grand cheaper on a 100 grand job, and they have to buy their rock. How can you compete with that. Word is that they are gonna start bidding water and sewer jobs as well. Might be a lean summer.Click to expand...Yeah, the oil patch is taking it in the teeth right now. This one has a weird feeling to it. I didn't expect anything to happen this winter, after a bad year companies have to build up operating funds again. But I didn't expect the deposit on a barrel of oil to be worth more then the oil either. This is going to take a little while to sort out.I guess whenever there is a major infrastructure project, the rhetoric will get a little thick as part of the bargaining process. You probably know more about what NFL went through with the Churchill Falls power dam in Labrador then I do. Only thing that fustrates me is the lion's share of petroleum is shipped in from Saudi Arabia and Venezuala. It's not domestic.This emissions can be insane. We get codes pop up- usually to do with after treatment "performance". They take half of it off, send it for cleaning and then send us back to work. Then when it's plugged up after a day or two, they know there's something up with the engine causing it to plug. EGR plugging up. EGR failures plugging everything else up. Burner cracked. Constant sensor failures. Everybody in service knows my voice. And it's all mounted two inches above the valve cover. You have to strip everything to do small jobs like a valve set.The industrialization of China has sure had it's effect too. Anybody that DIDN'T pick up and go where there's favourable dollar exchange ended up at a disadvantage. They have to figure out how to compete by reducing costs somewhere. Less labour, less iron or something. Some stuff ended up really disposable and I think they have to simplify it. Is this moveable blade control system (centre pin setup- whatever they call it) that much of an improvement over the old Champion system where it just went out the wing side for back sloping/ side sloping? Can somebody figure out an engine without all this aftertreatment junk? Iveco is close. Less electric over hydraulic crud. And figure this stuff out with some interchangeability. Why can't all of one brand of equipment use the same belt tensioner? Instead Strongco's got several for loaders and hoes on the shelf, but none for mine in western Canada. Some interchangeability would make stocking simpler and more cost effective. Dad's tractors have the same headaches. I'd love to go "bobber" style with all of it.

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cuttin edge said:Personally I would rather see the grader sit as well. I can't see the little bit of money it is making, out weigh what the salt is doing to it.Click to expand...Salt, wear, and tear. There was a nice sized local township up for bid that I'd have liked to get ahold of for the summer road maintenance, but for the $80 an hour they were currently paying for a blade I couldn't see the point in wearing mine out doing snow removal, (is there anything harder on them?) and I certainly couldn't see the money in buying a used plow truck and running it for $80 an hour, even with the lower price of fuel. I keep thinking these guys have to starve eventually, but it hasn't happened yet and I'll be damned if I'll get into a bidding war over it, lol

No interchangeability is how they make their money. The markup on parts is crazy. I bought a strut last week for the wife's young lad's car. It was the ready strut, with the spring already installed. I paid 188 plus tax. I got it at the company price. I was looking at the invoice, and the suggested price was 383 before tax. Last winter, the L70 I run in winter needed a wiper motor. 1100 bucks. It's not much bigger than the one on my halfton. This summer they replaced the bushings for the mold board slide, and tilt. You've probably replaced a few of them...$600, and they're plastic..... I want them to tighten up my circle before the spring, and I want them to get Strongo to do it, but I might have to sell a few body parts to pay for it if we don't get any fine grading jobs.

Silveroddo said:Salt, wear, and tear. There was a nice sized local township up for bid that I'd have liked to get ahold of for the summer road maintenance, but for the $80 an hour they were currently paying for a blade I couldn't see the point in wearing mine out doing snow removal, (is there anything harder on them?) and I certainly couldn't see the money in buying a used plow truck and running it for $80 an hour, even with the lower price of fuel. I keep thinking these guys have to starve eventually, but it hasn't happened yet and I'll be damned if I'll get into a bidding war over it, lolClick to expand...People cutting rates is why we are doing things for yesterdays prices. One of the plowing contracts we have is the Northumberland Co-op. It's a dairy\ frozen food factory, plus it has a building supply on the property. 6 years ago the local TimHortins coffee owner ( he had nothing to do with his money, so he decided to start an excavation company) he went to the Co-op board, and demanded that he be given the plowing contract, or he would purchase his milk products from Baxters. Now this would be a sizable loss for the creamery, as there are 6 Tims on the river, and he does a huge business. The president of the board told him " Mr H..... you are in luck...the contract is up for renewal this year. Feel free to submit a bid, and if you are the lowest bidder, the contract is yours. Northumberland Co-op survived before Tim Hortins, and we will survive after." Problem with the lowest bidder is the quality of work. There is an older company here, and snow removal is their biggest gig. They have a lot of old stuff from the 60s and 70s. Other companies are slowly hacking away at their contracts. They plow our subdivision, and have been doing it for 30 years. The streets are kept bare, and wide, and are plowed several times during a storm. They are not tight with their sand either. They lost one of their regular contracts, and the new guy is doing a terrible job. Won't plow til the storm is over, narrow streets, and only sand at the stop signs. If he takes our neighborhood, and does the same, I will be the squeeky wheel.

cuttin edge said:No interchangeability is how they make their money. The markup on parts is crazy. I bought a strut last week for the wife's young lad's car. It was the ready strut, with the spring already installed. I paid 188 plus tax. I got it at the company price. I was looking at the invoice, and the suggested price was 383 before tax. Last winter, the L70 I run in winter needed a wiper motor. 1100 bucks. It's not much bigger than the one on my halfton. This summer they replaced the bushings for the mold board slide, and tilt. You've probably replaced a few of them...$600, and they're plastic..... I want them to tighten up my circle before the spring, and I want them to get Strongo to do it, but I might have to sell a few body parts to pay for it if we don't get any fine grading jobs.Click to expand...Yeah. We've replaced a ton of those slides. I remember thinking the price was pretty dear on them last time. At that price you wonder if you couldn't do something out of brass (or whatever the bearing material is that the larger one and JD and Cat are using). We have pulled shims out of the shoes on the circle ourselves (but hang on to them if you do- you'll need them when the time comes to put fresh ones in). What the mechanic showed us was leave enough clearance for a piece of banding like a feeler gauge. Only concern I have is things don't wear evenly, I wondered if a guy could end up with the circle in a tight spot on a narrow backslope. Whenever getting the circle set right so it doesn't cog, I always got their help though.cuttin edge said:People cutting rates is why we are doing things for yesterdays prices. One of the plowing contracts we have is the Northumberland Co-op. It's a dairy\ frozen food factory, plus it has a building supply on the property. 6 years ago the local TimHortins coffee owner ( he had nothing to do with his money, so he decided to start an excavation company) he went to the Co-op board, and demanded that he be given the plowing contract, or he would purchase his milk products from Baxters. Now this would be a sizable loss for the creamery, as there are 6 Tims on the river, and he does a huge business. The president of the board told him " Mr H..... you are in luck...the contract is up for renewal this year. Feel free to submit a bid, and if you are the lowest bidder, the contract is yours. Northumberland Co-op survived before Tim Hortins, and we will survive after." Problem with the lowest bidder is the quality of work. There is an older company here, and snow removal is their biggest gig. They have a lot of old stuff from the 60s and 70s. Other companies are slowly hacking away at their contracts. They plow our subdivision, and have been doing it for 30 years. The streets are kept bare, and wide, and are plowed several times during a storm. They are not tight with their sand either. They lost one of their regular contracts, and the new guy is doing a terrible job. Won't plow til the storm is over, narrow streets, and only sand at the stop signs. If he takes our neighborhood, and does the same, I will be the squeeky wheel.Click to expand...Yeah- everybody's competing hard here too. It's work where they know the paycheck won't bounce. Maybe it's the reality of things in general. A friend of mine who is a home builder commented recently that that has been an industry racing to the bottom. Front all cost, jump through all hoops, to be the most poorly compensated guy involved I guess. I read this morning at coffee, quite a few spec houses were in the last stages of completion and about to hit the market in Calgary. Things had been so heated, builders just went ahead and built without having buyers lined up for them. Now, since they were committed to, the barrel price has really tanked and the housing is receding in price. Not sure I'd want to be in those guys shoes. One oil sands company north is on shaky ground right now. There were just enough financials available to do the rough math. Before the tax hike, they were set to break even, with the tax hike they were going to lose 4.7%. They were a company that really was never built to produce more then about 6.5% profit (of gross) at $82 buck a barrel. I guess there's too many people out there that figure if they aren't able to find a way to do it for less, somebody else will and they'll be watching from the sidelines.

And the exchange rate is really helping too....

The circle on my old 730 wore out of round, and you could only shim it so tight, because if you went farther than it was worn, it would jam. Our company bills out shop hours to each machine that is worked on. The guys in the shop are older, and set in their ways....slow and steady.... take your breaks, don't come out of the lunch room until it's time ....quit at 5:30. Don't get me wrong, they are a great bunch, but one year they built an aluminum work box for the pipe crew's truck. This is an 8 footer for a 3/4 ton....parts and labor were around $35000.....most of that would be hours. The tire company charged about 500 to put the snow tires on my grader, and our shop charged about 3000 to put my wing on. Mind you that these are not the actual costs, they just bill it as if I were going to a retail shop. Anyway, Troy from strongo knows his stuff, and I figure that they would be farther ahead to get him to do my circle, and quadrants, as he probably has procedures for it, and would probably do it faster, and do it right.

cuttin edge said:The circle on my old 730 wore out of round, and you could only shim it so tight, because if you went farther than it was worn, it would jam. Our company bills out shop hours to each machine that is worked on. The guys in the shop are older, and set in their ways....slow and steady.... take your breaks, don't come out of the lunch room until it's time ....quit at 5:30. Don't get me wrong, they are a great bunch, but one year they built an aluminum work box for the pipe crew's truck. This is an 8 footer for a 3/4 ton....parts and labor were around $35000.....most of that would be hours. The tire company charged about 500 to put the snow tires on my grader, and our shop charged about 3000 to put my wing on. Mind you that these are not the actual costs, they just bill it as if I were going to a retail shop. Anyway, Troy from strongo knows his stuff, and I figure that they would be farther ahead to get him to do my circle, and quadrants, as he probably has procedures for it, and would probably do it faster, and do it right.Click to expand...What wing on that one? Craig? Weldco Beales? Shouldn't take him long to get the circle tightened up the way you like. Probably a good plan. Here it's just my boss and I and we kind of try to do as much of the maintenance as we can. This B series is a whole different animal though. I think the mechanics argue amongst themselves who isn't going to work on it.

It has a Craig wing, and plow harness. Craig is less than 200 miles from here. I tried to price some drop blocks for the front plow harness from them, but I guess you have to deal with Strongo. $1700....might be cheaper to have them made. I might be going back to my loader plowing job...It hasn't snowed since the 13th, and I guess the DOT has had time to repair most of their fleet, and probably won't need our grader. If we are gonna do a lot of plowing for them in the future, I am gonna push for some fenders, or a 50 gallon washer fluid tank. Once they get the roads salted, it's a real bitch. I think Strongo has dumped some cash into Todd, and Parker's operation. I noticed a brand new little Volvo grader on there the other night.

So that's where Craig is built. We have Craig plows. When had the same issue you did. When we wanted to replace the lift cylinder for it, everybody had a hard time matching it up. We should have still been able to get ears welded on to a stock cylinder, but all the hydraulic shops were flat out at the time and there was a misscomunication somewhere. It ended up rebuilt- took a couple try's. And parts were a little iffy. Craig store up the road but they wouldn't deal with us, and Strongco wasn't able to dig up part #'s. My boss tries to spec machines with Weldco Beales wings. A little more expensive, I think they're built in Vancouver. They seem to be a little tougher. With as much trouble as I've had, it's been the best route. Frozen stumps, inconsiderate people dumping surplus concrete in the ditch, even just a good size rock froze down are potential "landmines". The last wing (Volvo) never broke a shear pin, but I think the pin at the toe of the wing (big chrome shaft) broke three times. That get's messy.Yeah, the fenders are awesome. It'd be nicer if they covered a little more but I'd hate to go back to without. The Volvo still managed to put a rock through the driver's side lower front window. These Michelin Snow X tires are great for traction but they lob rocks up into the air like crazy and when high blading they pulled a nice bank shot. Threw the rock into the moldboard and then back into the window. If you go the big washer tank route, maybe see if you can mount a big triplex pressure washer pump on one of the bellhousing accessory drives and a row of car wash nozzles? I know your pain.I guess I haven't paid much attention to the miners. But that would be good product placement. I know last year Tony's daughter was driving a SDLG loader. First time I seen a SDLG anything. I asked a couple mechanics at the shop about the SDLG loaders, and they said other then to see them brand new, nobody had worked on one. Either they had been okay so far, or they hadn't gone to customers that heavily hour up equipment. I was hoping there would be some SDLG graders around here by now so that in a couple years time when it's time to switch out the machine I'm running now, they'd have a bit of a reputation one way or the other. All I've seen are pictures. Both my boss and I are uncertain about joysticks. The JD has been okay, but I find after work I have to decompress in quiet after running it. I think it's just the "tone" of it. But other the musical hydraulic hoses, it's been reliable. I'd like to try out a Komatsu, but it doesn't sound like they have the best reputation. The only ones working around here are almost old enough to collect pension. Nobody running anything recent and I wonder if that doesn't speak volumes.

I think Tony is still running the SDLG. I think he prefers the antiques though. I just like to watch it for the laugh value. It's pretty dangerous when you drive those rock trucks into those little ditches. I love how easy it is to drive the pivot pin back into the track frame of the tractor, but how dangerous it is to sink in a bit of mud. One of the negatives I've heard about the sticks, are the ones that you have to twist..hard on the wrist I hear. A person could get used to it I guess, but I am not a fan of electric over oil. No feel to it. There were probably a few negative words shared when excavators came out. There is a guy around town with an old White back hoe without the joy sticks, and it seems odd. I have seen a grader with a set of truck half fenders on the front lots of coverage, but mounted high on the frame, and didn't tilt with the wheels. Be hard to see if you are running down the road with your wheels leaned a bit, wearing tires, gettin in trouble.

My rate for a 772 bh grader is $125/hr for normal grading, sloping, maintenance work. If I plow snow it is $135(wing and v-plow). No chain up fee but the clock is ticking while I throw chains. I have found that with six wheel drive I don't need chains unless I am in the mountains and fear sliding off a road and down several hundred feet. In the past few years with pricey fuel it was tough to make a profit.....this year fairly cheap fuel.......but no snow to plow. An early spring here in northern Montana will get me busy earlier with normal dirt work though. These prices may seem high but it is hard to explain to folks the "cost" of doing business......lot more than people realize.

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