EquipmentWatch, a leader in data, software, and insights for the heavy equipment industry, has expanded its Cost Recovery product to include hourly cost rates for standby and idling equipment. These new rates are a welcome addition to the standard Rental Rate Blue Book active use rates specified by the Federal Highway Administration, most state DOTs, and hundreds of project owners for equipment cost recovery.
Determining a Standard for Standby Rates
Standby refers to a situation where equipment is on the job and available for work, but is not put into operation. “Reimbursement for standby is a common practice between contractors and project owners,” explained Greg Lutz, head of product for EquipmentWatch. “But when we surveyed the industry we found that no prevailing method to determine these rates existed. In our position as the industry standard for active use reimbursement, it was a natural extension for us to include hourly standby rates in our Cost Recovery product.”
EquipmentWatch analysts determined standby rates using ownership factors of depreciation, cost of facilities capital, and indirect costs. This methodology drives the default rate provided in the product, however the software also gives project owners the option to submit their own specified standby calculation that users can easily select and apply to their rates.
Empowering Equipment Managers with Idling Rates
“Everyone knows that idling equipment costs their business money, but historically it’s been difficult to assign a dollar amount to that cost. We wanted to change that,” added Lutz. “By adding idling rates to our Cost Recovery product, equipment managers can now understand and effectively communicate the true cost of idling equipment to their team.”
Idling rates were determined using ownership factors of depreciation, cost of facilities capital, indirect costs, overhaul labor, and overhaul parts. It also includes the operating costs of electrical or fuel consumption, however they will omit the cost of lube, which some equipment managers may want to optionally include.
Meeting the Needs of the Data-Driven Equipment Manager
These new rates are the latest innovation in EquipmentWatch’s mission to meet the needs of today’s data-driven equipment manager. Along with internal charge rates, market values, retail rental rates, machine specs, serial number history and market insights, the launch of standby and idling rates provides modern contractors with the data they need to make better decisions about heavy equipment.
For additional information on EquipmentWatch, visit: https://equipmentwatch.com.