Articulated trucks

Brooke Wisdom | Published on May 1, 2010

Being penny-wise on acquisition costs usually results in pound-foolish results.

By Tom Jackson, Contributing Editor

The articulated truck has gained in popularity

in the last two decades as a highly productive earthmoving tool, proving its worth against
other high-volume earthmoving methods and machines, such as rigid-axle dump trucks,
dozers, and self-propelled and towed scrapers.
Choosing the right machines and methods for this kind of mass excavation comes down to
carefully detailing owning and operating (O&O) costs and then applying those figures to the
amount of material (tons or cubic yards) you can move in an hour. This article focuses on just
the machine O&O costs, since a discussion of productivity requires an analysis of additional
variables such as soil types, site conditions, and support machines.
Keep in mind that the numbers presented here are ballpark estimates for discussion purposes
only. To get a more accurate and detailed estimate of your costs, consult with an equipment
dealer. Once youve calculated your costs on the articulated truck, youll need to do the same
for the support machines and compare different combinations.
For this study, a 43-ton Volvo A40E articulated truck was selected. Blaine Pressley, senior
segment manager for Volvo Construction Equipment North America, says a very general
estimate for the life cycle on this machine would be 12,000 to 15,000 hours, but in lighter
applications, some customers have gone as far as 30,000 hours. It is up to the owner as to
how much money they are willing to spend to keep the vehicle running, he says. The point
at which the operating costs exceed the owning costs is viewed by many as the economic life
of the machine and thus the effective life cycle.

One key O&O variable that owners have control over is the quality of their preventive
maintenance, Pressley says. Using cheaper consumables may save money short term, but can
result in more repairs and shorter component lifespan over the long term. Operator training
and skill also play a part in component life. Appropriate use of traction control systems and
longitudinal and differential lock functions can make a tremendous difference in component
life, fuel use, tire wear, and cycle times.

Before getting into the numbers in the charts,

here is a broader discussion of the variables behind the numbers. Keep in mind these are
general estimates. Volvo and many other equipment manufacturers have proprietary owning
and operating cost software programs available through their dealers that can help move you
closer to an accurate number for your specific needs. These O&O calculators software
programs are always a good idea for any machine, but for high-volume earthmovers like
artics, they are a must. Detailed software programs can ask the questions many operators tend
to overlook and get you closer to a true total cost of ownership value that fully accounts for
things like financing, service and maintenance, and resale value.
Also ask about site simulation software that can help you select the best match of equipment
and maximize productivity. Using site simulation software, a dealer can come to your site and
help you plot grades, curves, and truck routes, Pressley says. You want to have the right
number of haulers for the site and the right number of passes to fill the truck to ensure the
best possible productivity. And as with the O&O costs, small differences add up to big dollars
here.
OWNING COSTS
Purchase price
The typical price for a new machine in the 40-ton category ranges from around $500,000 to
$670,000. Keep in mind this is the suggested list price. Consult a dealer for an actual quote.
The value of a trade-in machine, or a package deal involving additional machines may have
an impact as well. You may want to compare the purchase price against buying a low-hour
used machine or a refurbished machine. The normal refurbishment cost can be somewhere
between 30 to 45 percent of the price of a new machine, Pressley says. And while most
people tend to focus on the purchase price, it is always a small part of the total O&O costs.
See our chart labeled Artic A vs. Artic B.
Finance/interest cost
The average APR is around 6 percent for this size machine.

Insurance
Depending on your provider, expect to pay about 2 percent of the purchase price on an annual
basis.
Resale price/residual value
The reputation of the brand, number of hours on the engine and major components, condition
of the machine, quality of maintenance, and local market dynamics all play a role in setting
the resale price. In general, artics in the 40-ton range lose about 15 percent of their residual
value per year, says Pressley.
OPERATING COSTS
Fuel use
Fuel use varies with application, steepness of terrain, and weight of loads. As a general rule, a
light application will use around 6 gallons per hour, a medium application uses about 8.5
gallons per hour, and a heavy application may consume approximately 12.5. These figures
vary between manufacturers, and it pays to do your homework as a half gallon per hour
difference can make a high cost difference in a short period of time.
Tire life cycle and cost
Again, application and usage determine the life of your tires. Expect a range between 3,000
and 5,000 hours. Pressley says Volvos manufacturers list price is around $48,000 for a set of
six tires for this artic. Note that maintaining correct tire pressure is critical for getting the
longest life possible out of a tire. (In most O&O models, the tire cost is subtracted from the
purchase price [as we have done in the chart] in order to more clearly represent tires as an
operating, rather than an owning cost.)
Preventive maintenance
Each manufacturer will have slightly different schedules and parameters and, as a result, the
costs and service intervals may vary considerably. This is another reason you should use the
dealers cost estimating programs. As a very rough estimate, you could assume an average
cost of about $4 per operating hour over the course of a 12,000- to 15,000-hour life cycle.
Pressley says to note that good preventive maintenance isnt just lubes, fluids, and filters but
also includes:
Cleaning,
Oil analysis,
Inspections,
Testing,
Sampling,

Measurements,
Adjustments,
Repairs, and
Proper documentation.
Good preventative maintenance (PM) is usually the single most important and controllable
factor the customer has in reducing owning and operating costs, he says. Its the principle
of pay now or pay later, and the up-front costs required for good PM is minimal compared to
the cost of a machine thats down due to failure.
Repairs
A ballpark estimate amortized over a 12,000- to 15,000-hour life cycle would fall in the $5an-hour range.
Operator wages
Determined by company policy and regional trends.
Additional
Articulated trucks, their drivelines, and transmissions have become more sophisticated over
the past few years in order to better help you conserve fuel, increase productivity, and reduce
tire and component wear, says Pressley. Learning and comparing the competitive features of
each brand and then training your operators to take advantage of these features can produce
significant cost savings and productivity gains. AM

O&O COST CALCULATIONS

Based on a Volvo A40E articulated truck. 2,000 hours per year, five-year life cycle.
Note that all these figures are general estimates and for discussion purposes only. To get a
more accurate accounting of your own costs, consult a dealer. Also be aware that some
operators prefer to calculate O&O costs without including the resale value of the machine at
the end of its life cycle. This will yield higher owning costs, but is sometimes done for tax or
bonding purposes. Consult with your accountant or tax adviser before deciding which model
is appropriate for your business.
Per hour

Per year

Per 5 years

OWNING COSTS
Purchase price

$65

$130,000

$650,000

Purchase price
(excluding tires)

$60.20

$120,400

$602,000

Resale value

$28.80

$57,600

$288,000

Depreciation cost

$31.40

$62,800

$314,000

Interest cost (6%)

$14.07

$28,140

$140,700

Insurance

$6.71

$13,424

TOTAL FIXED COSTS

$52.18

$104,360

$67,120
$521,820

OPERATING COSTS
Operator wages
(@ $20 per hour)

$20

$40,000

$200,000

Fuel (medium duty cycle,

8 gph, $2.75 per gallon)

$22

$44,000

$9.60

$19,200

$220,000

Cost of tires
(5,000 hour lifetime)
Repairs and maintenance

$9.00

TOTAL OPERATING COSTS

TOTAL O&O COSTS
$225,560

$60.60

$18,000
$121,200

$96,000
$90,000
$606,000

$112.78
$1,127,820*

*Note: due to rounding variances, some columns may not total precisely.

ARTIC A VS. ARTIC B

Small differences in big machines can add up to big dollars, either saved or wasted,
depending on how carefully you match your machine to your job. In this comparison, we take
two articulated truck fleets. Fleet A has two 43-ton trucks and Fleet B has two 40-ton trucks.
In Fleet A, the purchase price of the trucks is $50,000 more per truck, but look what happens
to the costs once you put the fleets into the field. Assume 50-cent per ton bid price (or profit)
and 2,000 operating hours a year.)
Fleet comparison

Artic Fleet A Artic

Fleet B

Price

Advantage
(B) 50,000

Payload per truck

43 tons

40 tons

(A) 3 tons

Cycle time

5 minutes

6.3 minutes

(A) 5%

Annual payload
tons

167,084 tons

Fuel use
per year

8.6 gph per truck

83,542 tons
9.1 gph per truck

(A) 83,542
(A) $5,500

On Fleet A you can also factor in a service labor savings of $1,875 a year and an additional
1,253 cycles for a serviceability cost advantage of $26,942 per year. All totaled Fleet A will
gain you $117,360 per year and $1,408,315 over a five-year life cycle. While this is just one
theoretical example, it does point out the need to study your options when it comes to
maintenance, service, payload, fuel consumption, and cycle times.
- See more at: http://www.aggman.com/articulated-trucks/#sthash.7auvWWJC.dpuf