Keep Your Construction Fleet Profitable


Keep Your Construction Fleet Profitable

Whether large or small, your construction fleet incurs a variety of costs — from equipment purchases to maintenance to operation and more. While some construction work may involve more costly equipment, heavy equipment as a whole requires significant capital investment. With sums this large, reducing the cost of your construction fleet where possible can make a huge difference.

Even small efforts to increase your profitability can have a noticeable impact on your bottom line. With so much to manage and a host of variables, it may seem difficult to pinpoint areas to save money on your construction fleet. Here are a few tips to help you think about your fleet and keep your construction company profitable.

Ways to Increase Construction Fleet ROI


Your fleet's return on investment (ROI) takes a look at the amount of performance and usage you receive compared to the amount of money you spend on a piece of equipment. Your ROI may vary depending on several factors, including:

  • The age of your fleet and each piece of equipment
  • Whether you rent or purchase your equipment
  • Whether your equipment is new or used
  • The type of equipment you use
  • How often you use each piece of equipment

Keep your fleet's specifications in mind as you consider each profitability tip for your business. 

1. Track & Manage Costs of Ownership

A foundational way to increase construction fleet productivity is to collect detailed data. Specific data can help shed light on the way your equipment is used as well as how much money it consumes annually. With a quantifiable break down on each piece of equipment, you can identify opportunities for savings.

For each piece of construction equipment, determine the following metrics:

  • Costs: Equipment costs encompass both the costs of ownership and the costs of operation. Ownership costs may include factors like depreciation and insurance. These factors remain steady whether you're using the equipment or not. Operating costs include items like maintenance, repairs, and fuel. These variables will change based on the way you use your equipment.
  • Revenue: Though revenue typically refers to the money you make from construction jobs, it also applies to your equipment. The profit you make from each project should account for the cost of the equipment you used to complete it. To factor your equipment into your revenue, it may be helpful to establish designated "rates" for each piece of equipment and each job. This is similar to a rate you might charge if you were renting out your equipment. Having your equipment costs in mind can help you maximize revenue when bidding on jobs.
  • Utilization: How much you use a piece of equipment is crucial to its profitability. For each piece of equipment, determine how many annual usage hours you need to break even on its costs. From there, you can track each piece of equipment's annual hours and life span hours. Though usage hours may decline each year, equipment's average hour usage across its life span can help you determine if it's profitable. This data may also help you determine whether renting or buying equipment could be more advantageous for your business.

One tool that may help simplify this process is fleet management software. Based on your budget and preferences, you can either set up spreadsheets or adopt a dedicated construction fleet software. Fleet management software may provide additional convenience as it allows you to track information about vehicles and equipment, fuel usage, and maintenance schedules all in one place.

2. Schedule Regular Preventative Maintenance 

Maintenance is a vital part of managing a construction fleet. The type of maintenance you employ can make a noticeable difference in your fleet's profitability and life span. In general, heavy equipment may require two forms of maintenance:

  • Need-based maintenance: This type of maintenance occurs when equipment breaks down and requires repairs immediately. Need-based maintenance can be more expensive and cause equipment downtime, but its costs only come up occasionally.
  • Preventative maintenance: This type of maintenance occurs at set intervals to prevent larger issues from developing. Preventative maintenance incurs a steady cost, but it may result in lower lifetime maintenance costs for equipment.

Preventative maintenance can help keep your fleet running smoothly, even when equipment doesn't show glaring issues. Early detection can help extend the life of your equipment as well as increase its overall ROI. In fact, studies have proven preventative maintenance pays for itself and increases ROI.

For best results, you'll want to establish regular maintenance intervals for each piece of equipment based on the original equipment manufacturer (OEM) recommendations. Some equipment providers even offer long-term preventative maintenance contracts for added convenience.

3. Monitor Fuel Usage

Fuel usage may seem like a nonadjustable factor for your fleet. Your equipment needs fuel to work, and that work varies based on each job. While this is true to a degree, there are still ways to monitor and decrease fuel consumption in your fleet. 

The diesel fuel in your heavy equipment helps it keep up with demanding construction tasks. Though diesel is more expensive than gasoline, it offers a better power-to-weight ratio in heavy equipment. To track and decrease your diesel usage, it may be helpful to implement telematics.

Telematics solutions include software that can track your equipment's location and activity in a variety of ways. Telematics programs could provide detailed data on your fuel consumption based on idle time and machine performance. The information you glean from telematics can help you take action to reduce costs in precise ways. Ultimately, it allows you to study, adjust, and maximize your fuel efficiency in ways you otherwise could not.

4. Train Employees on Best Practices

The way your employees handle equipment and the procedures they follow can contribute to your fleet's profitability. Training your employees on equipment best practices can help them adopt efficient and money-saving habits. 

One of the simplest ways to set your employees up for success is to train them on equipment inspections. Equipment operators are the first line of defense for noticing issues that may grow into more costly breakdowns. Train your employees to inspect and monitor the following areas:

  • Safety items: Including equipment tires, windshield wipers, horn, breaks, steering and headlights
  • Operational items: Equipment glitches including misfires, rough idling, starting issues and more
  • Exterior items: Including equipment glass, body damage, dirt and more

To standardize the inspection procedure, it may be helpful to establish checklists for each piece of equipment. Your OEM may also provide checklists you can use. For example, Caterpillar® provides specific safety and maintenance inspection lists as wells as start-up and shut-down inspection lists.

Another way to encourage profitable habits is to train your employees in proper driving techniques. When you provide training for each piece of equipment, help eliminate distractions, and establish a safety protocol, you can maximize efficiency, save fuel, and minimize downtime due to injury.

5. Sell Underused Assets

Asset management is key to having a profitable construction business. Idle equipment can become a financial drain that impedes your fleet's profitability. If you own a piece of equipment and pay insurance, tax, and maintenance costs for it, you need to use the equipment to make the investment worthwhile. Otherwise, the equipment consumes valuable capital. On top of this, heavy equipment takes up a significant amount of space. If you're storing a piece of equipment you don't use, it may be hogging valuable space that could be used for more profitable machinery. 

Using the spreadsheets, software, and telematics you implement, examine the usage data for each piece of equipment. In some cases, you may identify equipment that doesn't get enough use to justify its ownership costs. Selling underused assets and switching to rental equipment as needed could maximize your ROI and save you space.

Maintain Your Construction Company Equipment and Maximize Fleet Profitability With Thompson Tractor


Managing a construction fleet requires a host of considerations. Between replacing equipment, maintaining equipment, and renting equipment, your fleet has a wide variety of needs. At Thompson Tractor, we provide the quality parts, products, and services to keep your equipment at its best.

For 60 years, we've been developing relationships with our customers. We'll partner with you as a one-stop shop for all of your Cat® equipment needs. For more information about how you can maximize your fleet's ROI with Thompson Tractor, contact us today!