A conversation with Steve Michaels, vice president of fleet operations at Neff Rental
Today, the construction industry has entered a whole new area: Green Construction. With specific regulations and guidelines that need to be met, the Tier 4i and final Tier 4 engines allow both business and consumer to bid for projects in the “green” space where EPA emission certification is a requirement. This Q & A will highlight changes and shift in financial implications that will be seen over the next year, and the benefits of the Tier 4 engines.
What will be the new financial implications of final tier 4 engine regulations in 14/15?
MICHAELS: The future of rental equipment, cost, and implementation of the new and final Tier 4 engines come at great cost. However, meeting the new EPA regulations and standards allows contractors to bid for “green” projects by purchasing or renting the Tier 4 units. Over the course of the year, more and more equipment will be purchased in Neff’s fleet meeting the requirements by the EPA. Remember to take into consideration when purchasing these products a construction project’s guidelines, measurement of units, and budget; as the Tier 4 engines will cost more, but save on production time, efficiency, and allow contractors to bid for more projects.
Equipment vs. Fuel Savings
MICHAELS: If equipment costs are on the rise, where do contractors see a break? Although fuel costs are not on the decline, many Tier 4 engines on units with 75 hp and greater diesel engines use 1 to 4 percent less fuel compared to IT4 in certain applications. This engine design with the addition of an SCR catalyst utilizes (DEF) Diesel Exhaust Fluid, which costs less than fuel decreasing the overall costs related to consumed fluids. This becomes a benefit to purchasing the new Tier 4 engines, as fuel costs can consume most of a project’s budget. By renting instead of buying, contractors can also minimize their cash outlay and capital requirement as they only pay for the time needed to complete their project, which means these additional costs are only fractional since usage is minimized when renting compared to purchasing commitments.
How can contractors that rent/own equipment plan for the transition?
MICHAELS: When considering the purchase of new equipment it is always best to know the project requirements before renting or purchasing these products. Always take into consideration the project scope as they may require final Tier 4 diesel engines which provide a clean running efficient machine. Best practices before operating is to familiarize oneself and staff with the product and final Tier 4 exhaust after treatment system onboard, and how to operate the unit correctly so that projects stay on schedule. Neff Rental provides training packages to ensure that every Neff mechanic, driver, and key personnel are properly trained and prepared to operate (and maintain) this new technology.
When renting equipment, what will the resale value of new tier 4 and existing tier 4i equipment look like?
MICHAELS: Major manufacturers are working on kits to restore engines back to Tier 3 so that they can be shipped outside of the U.S., and won’t dramatically affect resale value and cost. All newly produced units inside the U.S. are required by the EPA to be Tier 4, which then adds greater cost to engines that have to be reprogrammed back to Tier 4i and below, and shipped out of the country.
Where do you see the future of equipment?
MICHAELS: Rental continues to grow at a record pace as more and more contractors are minimizing their capital budgets. By purchasing less equipment and renting more, contractors may better direct their dollars to do what they do best—manage and complete their jobs. Rental companies like Neff Rental can provide all the equipment and expertise needed with the latest technology and delivery to the site with the assurance that the job is 100 percent compliant.
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For More Information Neff Rental provides construction companies, golf course developers, industrial plants, the oil industry, and governments with reliable and quality construction equipment. For more information, visit www.neffrental.com.
Modern Contractor Solutions, July 2014
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