Some utility contractors like to purchase a shiny new piece of iron every three years. Other contractors treat their drills like a member of the crew and maintains them faithfully. Regardless of your stance, here are five of the most common reasons contractors should consider upgrading their horizontal directional drills (HDDs).
1. Expanding into a new market
The fiber market is booming thanks to heavy investments from communications powerhouses like Google and AT&T. The influx in work has caused many underground utility contractors, and even some pipeline contractors, to expand their service offerings to include fiber installations.
“The fiber work is very consistent and it’s likely going to be around for several years, so people are making equipment purchases to expand into the market,” said Chad Van Soelen, general manager of Vermeer Midwest, located in Chesterfield, Missouri. “Smaller, mid-line horizontal directional drills are ideal for fiber work because of their flexibility and maneuverability. We’re seeing a lot of contractors trade in larger machines or upgrade smaller machines for the D23x30 S3 Navigator® horizontal directional drill.”
2. Workload
The fiber boom has also prompted some utility contractors to add more horizontal directional drills to their fleets in order to take on additional projects. According to Van Soelen, most contractors make equipment purchases in the spring or early summer, when their workload is the heaviest.
Before contractors buy a new drill, they should consider their current workload, project backlog and the number of contracts they have locked in to evaluate the quantity of work to be able to support their financing payments.
3. Cost of operation
Some contractors choose to own their equipment for many years and run it to the end of its usable life, while others prefer to upgrade their equipment every three years — when they feel the machine has maximum trade-in value. With either approach the contractor should consider the overall cost of operation.
“Some contractors come into the dealership and purchase a new drill and the Vermeer Confidence Plus® asset protection program, which includes machine preventative maintenance,” said Van Soelen. “It helps the contractor control operating costs; they know their monthly financing payment and what revenue they need to generate to cover it.”
Before investing in a new piece of equipment, contractors should estimate how much their current drill costs per hour to operate. If the hourly operating costs are going up, it may be time to upgrade to a more productive machine.
4. Innovative technologies
Horizontal directional drill manufacturers are continuously working on innovative technologies to help contractors be more productive. Just like some consumers stand in line for hours to get the latest and greatest cellphone on the market, some contractors upgrade their drills every few years to gain access to the latest HDD technologies.
“Vermeer recently introduced the S3 Navigator HDD with more power, sound reductions, the DigiTrak® Aurora™ display and InSite™ Fleet capabilities,” said Van Soelen. “We have customers that are upgrading from the Series II to the S3 machines just to gain access to these innovative technologies.”
5. Business investments
At the end of the fiscal year, owners of a contracting business may find it beneficial for tax purposes to invest money in their businesses to upgrade their equipment. Current interest rates, financing offers and annual equipment depreciation should also be factored into the decision-making process. Contractors should consult their accountant or financial advisor to review their companies’ finances and current tax laws when considering a year-end equipment purchase.
If you think upgrading your horizontal directional drill could benefit your company, contact your local Vermeer dealer or visit www.vermeer.com.
Vermeer, Navigator, InSite and Vermeer Confidence Plus are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries. Aurora and DigiTrak are trademarks of Digital Control Inc.