In many cases, a new 7- to 8-cubic-yard loader will cost less to run — per hour or per ton — than an older model.

by Tom Jackson

Big machines bring big profits, but they also cost a lot to operate — all the more reason to calculate, out to the penny, what you’ll spend working these high-volume producers. Another reason to closely analyze the cost considerations of your big equipment is that new production-level machines often come with the latest technology in the equipment industry.

Today’s newer machines, with Tier 3 engines and high-tech electronics and hydraulics, can run circles around earlier generations of machines — and do so while burning less fuel and maximizing their up-time. In this economic climate, some operators may shy away from new equipment purchases, but you’re shortchanging yourself if you look only at the sticker price. Experienced operators know that what matters is not the purchase price, but what it costs you per yard or per ton to move material.

In this article, we’re looking at wheel loaders with bucket capacities in the 7-to 8-cubic yard range — a typical quarry machine or high-volume earthmover. To help us analyze the costs on these, we turned to two of Komatsu’s product managers, Rob Warden and Chuck Murawski. They recommended we study the new WA500-6 wheel loader as it is a new, clean-sheet-of-paper design. The only things that were carried forward from the previous Dash-3 model were the size of the tires and the size of the engine. Everything else — the transmission, torque converter, axle, frames, and hydraulics — was redesigned to work together harmoniously, making it a good candidate to show off the cost-saving potential of a new machine.

“What often happens as a machine model grows older is that the weight and horsepower increase, but the components stay the same,” Warden says. “You have to work your components harder to get the performance you require and you end up using more fuel.”

When you start from scratch, engineers can design everything to hit a certain sweet spot, so you’re not constantly pushing the engine or hydraulics up against their limits. Manufacturers will also integrate the latest technology, which, in this case, includes more shifting modes; a lockup torque converter; a closed-center, load-sensing system with variable displacement piston hydraulic pumps; and a variable-speed, on-demand hydraulically-driven cooling fan. To reduce downtime, the new WA500-6 also offers DT electrical connectors, O-ring face seals on hydraulic hoses, and Equipment Management Monitoring System (EMMS) onboard diagnostics.

Residual value

As part of the owning and operating (O&O) cost calculations, we include the residual value of the machine at the end of its first lifecycle. But with a new generation of machine, estimating the resale value is tricky because the field population is relatively young, there aren’t any on the used equipment market, and a survey of price guides only turned up two roughly comparable machines. Further complicating matters is that there are many different ways to sell a machine. You can trade it in to the dealer, sell it yourself, or sell it at auction. And don’t forget that there are some O&O cost models that have you zero out the value of the machine at the end of its lifecycle and claim no residual value. We build the residual value into our calculations, which lowers your O&O cost, but all these considerations are best settled with the advice of your accountant, equipment dealer, and, in some cases, a tax advisor.

To help with the math on this assignment, we used a spreadsheet calculator that’s available at Komatsu dealers. Most of the top equipment OEMs today make similar calculators available, as they’re an invaluable tool for totaling up costs. Remember also the numbers we cite here are theoretical and for discussion purposes only. To get your costs to the level of accuracy you need to operate your equipment profitably, you need to sit down with the dealer, plug in the exact specs of the machine you want, and use your own labor, fuel, and consumables costs. Don’t be tempted to guesstimate based on our figures, as even small variations in the numbers can quickly add up over time.

Fuel efficiency

In our fuel calculations, we estimated the fuel use of the WA500-6. Fuel consumption of this model ranges from 4.6 to 12.0 gallons per hour as it will vary based on the load factor of your application. Because of its significant impact on your lifecycle operating costs, this is one figure you should research from your previous operations and plug into your own O&O models.