Points to Remember When Buying Used Backhoe Loader

points-to-remember-when-buying-used-backhoe-loaderThe rising Indian economy has been a driving factor influencing the demand for construction equipment in the country. The sales of both new and used construction equipment saw rising last year. On the back of increasing infrastructure projects in sectors like roads and highways, railways, dams have boosted the demand for earth moving equipment in the country, mainly the Backhoe Loaders because of its versatility.

In the heavy equipment segment, Backhoe Loader is considered one of the crucial construction equipment due to its multi-tasking application. Backhoe Loader is used for demolition, paving roads, breaking asphalt, digging holes, setting up drainage system, laying pipes, moving heavy materials,  and used for varieties of construction projects from building housing complexes to road building, name any construction projects where there is no use of this versatile machine.

Many people associated with construction industry must be planning to purchase new as well as used Backhoe Loaders as many infra projects are already floating or expected to hit the ground in coming months. It is seen, people barely hesitate to buy the new machine, but they are extra conscious when going to buy a used machine.

Here we will see the points which we should keep in our mind when going to buy second-hand/used Backhoe Loader.

1 – When you go to buy used Backhoe Loaders, the first and foremost thing you should do is, go along with your operator/mechanic who will physically check the machine, because his feedback is very crucial for you in purchasing the machine. You can also try checking the machine by driving the Backhoe Loader if you have experience in operating this earth moving machine.

2 – If you are going to buy the used Backhoe Loaders, you should be aware of the dimensions and operating weight of the machine. The horsepower of the machine, dig depth and bucket capacity of the Backhoe Loaders are responsible for performing the task at the site, so you must get these details by keeping your project in your mind.

3 – One must check to all leading edges of Backhoe Loader, minutely check at bucket teeth, and ensure no part is missing.

4 – The hydraulic system of the Backhoe Loader is accountable for competent operation, so properly check each system component.  Also, make sure there is no damage or scratch on hoses or arms and couplings are in proper condition.

5 – Ensure no leakage, damage, scratches in cylinders.

6 – Look underneath of the Backhoe Loaders, check driveshaft and other parts of the machine to check any damage caused during the operation.

7 – Try to understand, why the owner of the asset is selling his Backhoe Loader, If he is selling it due to the technical error, you should be conscious and avoid that machine. Because if the machine is not for his use, then how come it will be useful to you.

8 – Also look at the driveshaft to ensure there is no damaged caused by any rough terrain or rocks.

9 – Get inside the machine and drive it for some distance to check smooth running, functionality and ensure no unusual noise coming from the machine.

10 – Check all the attachments of the used Backhoe Loader.

11 – Check the Backhoe Loader stick and boom for any cracks, also check the hoe bucket and missing bolts or teeth. One must ensure dig depth of the machine is enough which you require for your work.

12 – Backhoe Loader is fitted with the diverse attachment such as Digging Buckets, Front Forks, Grapples, Concrete saws, tampers, cold planers, Breakers, and more, these attachments help you to perform a better and different task, so check all attachments which you need to fit in the machine.

13 – When you go inside the machine, also check the overall condition of the seat, joystick and foot pedals.

14 – The visual and functional inspection is done to check bends, cracks, and welds of the Boom, Stick, and Bucket of the Backhoe Loader.

15 – Brand always makes a difference even when the machine gets old, machine made by the well-known company like JCB, Tata Hitachi, Komatsu, and others should be given preference when buying any used Backhoe Loader (like used JCB 3dx). You should also check the ‘Make year’ of the machine, which would tell you, how old the machine is.

16 – It is also advisable to check the service record or work orders of the Backhoe Loader.

Keeping these points while inspecting the used Backhoe Loaders will help you buying the more productive machine and give you a better return on your investment.

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Why Investing in Backhoe Loader is a Good bet in India?

A Backhoe loader is one of the major and versatile earth moving equipment. This construction machine used for demolition, paving roads, breaking asphalt, digging holes, setting up drainage system, laying pipes and different other construction works.

The usage of the Backhoe loader in different infrastructure projects define its multi-functionality and versatility, it suggests no matter which sector is being developed in India, the need of Backhoe loader is always there. As we have read various news reports that a huge infrastructure development has started taking place in India in different sectors, especially in the roads and Highways, dams, and railways sectors.

It is projected that demand for Backhoe loader in India will sustain for quite some time, therefore investment in purchasing new or used Backhoe loader will be a clever move.

As Backhoe loader is versatile earth moving equipment and used for different construction projects, so investing in purchasing this machine will not go in vain. If you are into the construction business, you are likely to get future projects due to infrastructure development in the country. Even if you will not have any project in hand, you can either sell-off your Backhoe loader on good price or give on rent.

Recently one of the leading Market research company Persistence Market Research said in its report that India will be the most lucrative and largest market in the world for Backhoe Loader over the period of next few years due to infrastructure development in the country.

As you see, even the reports are also suggesting the demand of the backhoe loaders in India.

Let me explain you, where the demand for Backhoe loaders is expected to come.

For the next five years, The Indian government has planned to award works worth Rs. 7 lakh crore to develop National Highways of around 50,000 km. In the current financial year (2016-17), National Highway Authority of India (NHAI) sets a target to award projects worth Rs 1 lakh crore covering the area of over 6600 km. Lately last year, Union Minister Mr. Nitin Gadkari had said that the government will invest Rs 25 lakh crore for the development of highways and shipping in 5 years.

According to one of the reports of PTI, earlier this month, the Civil Aviation Secretary RN Choubey said that to develop the airport infrastructure in India, USD 10 billion would be spent in the next five years.

To improve the existing railway infrastructure and mobility of its services, the government will invest USD 140 billion over the next five years.

As we know the demand for construction equipment both new and used construction machinery entirely depend on the infrastructure development in particular country. The investment in country’s infrastructure development indicates the demand for both new and second-hand Backhoe loaders will rise in India.

Advantages of Buying Used Construction Equipment

equipment-one-stop-collageConstruction business requires huge investment and a major chunk of investment goes for buying heavy construction machinery depending upon the project requirement. Therefore, it is always advisable to minimize the cost of the investment to make maximum profit out of the project.

There are four segments of construction machinery, Earthmoving equipment, Concrete equipment, road equipment and material handling equipment and buying this equipment is very costly affair.

Due to budget constraint, construction companies can’t take risk of compromising on the quality of construction materials, which will ruin the brand value of the company.

However, one option is always open for these construction companies to minimize the investment in purchasing the machinery used in the projects. Instead of investing in the new construction equipment which is necessarily costly affair, one can prefer to buy second-hand construction equipment from various dealer and e-commerce portals which are in the business of used construction equipment.

There are various advantages of buying second-hand construction equipment, which help construction companies to save huge amount of money.

Lower Cost

The new machine eats up huge money of contractors and buying used machine help to reduce the project cost. Second hand construction equipment is always available at lower price and used machine could be a better alternative from a financial point of view, when we plan out the investment for the project.

Avoid depreciation 

Within a first year of buying the new construction equipment, the value of the machine depreciates around 20 to 40 percent, depending on the condition of the machine, so your resale value is automatically reduced. Thereafter, the depreciation is gradual and not substantial. However, used construction equipment hold resale value, even you sell after a few years or after your project completion. Therefore, potential loss in selling used equipment is lesser as compared to selling new equipment.  

Choice and Flexibility 

Due to the emergence of e-commerce, many companies offer the services of buying and selling used equipment online, which give various options/choice for the buyers to buy equipment in their location or in budget.  When someone intends to buy used equipment he/she has flexibility to choose machine from their favorite brand, which one can’t have same flexibility when go for new machine due to budget constraint.  For example, if a small contractor wishes to buy Backhoe loader of JCB but due to shortage of fund he can’t buy the new JCB Backhoe loader, but he still has option to buy the same brand in used equipment.

Technology Concern 

As we are aware most of the construction equipment manufacturers are coming up with the latest technology and if contractors buy new machine they enjoy the features of the latest technology.

However, it does not make a huge difference on a project if someone uses the older version of the machine due to any reasons. The Heavy construction equipment industry has been very slow in adopting the new technologies, so it is not a matter of concern if contractors are using used equipment due to financial crunch.

Therefore, it’s important to make a choice between new and used equipment after taking all the above mentioned points into consideration.

John Deere Releases G-Series of Large-Frame Skid steer, Compact Track Loaders

John-Deere-330G.jpgJohn Deere one of the globally known Construction, agricultural and forestry machinery makers,  releases the new G-series of large-frame skid steers Loaders 330G, 332G and compact track loaders 331G, 333G.  These machines were inspired by extensive feedback from its customers looking for more productivity, better visibility and simplified service to remain competitive in their businesses.

Company also added a host of new features to make the large-frame G-Series machines easier to run and maintain on jobs of every scale.

The biggest improvement on the large-frame G-Series is the refined vertical-lift loader boom design that rise higher, reaches farther and lifts more for quicker and easier loading. Height to hinge pin is 11 feet, enabling operators to easily load dump trucks, feed mixers, fill hoppers and everything in between. The company believes customers will also appreciate the new lift path that extends an additional six inches from the machine.

Contractors, landscapers, farmers, rental professionals and other equipment owners who understand the value of compact equipment can now expect even more power, productivity and uptime on the job with the new G-series equipment.

“Demand for compact machines that maximize productivity and uptime at low daily operating costs is growing, and John Deere is growing with it by adding powerful new options to our G-Series lineup, like the new large-frame skid steers and compact track loaders”, said Mr. Gregg Zupancic, product marketing manager, John Deere Construction and Forestry.

The large frames also serve up substantially greater boom and bucket breakout forces. In fact, they have horsepower that is comparable to a small backhoe loader or crawler, and they also work comfortably in tight quarters, so operators can accomplish more with less machine. Increased rated operating capacities of up to 3,700 lbs. give these models the muscle needed to master heavy loads, coupled with a breakout force that has been increased by 40 percent to make lifting heavy loads easier, said the company in an official release.

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Increased auxiliary hydraulic flow and power on the large frames means customers can make the most of an even broader range of attachments for a wide variety of work. Universal Quik-Tatch enables you to go from bucket to forks and more in just seconds. Generous standard and optional high-flow auxiliary hydraulics also let you effortlessly run powered attachments, such as hydraulic hammers, cold planers, mulching heads and trenchers. All auxiliary hydraulic lines and wiring on new machines are now routed through the boom where they’re more protected and out of the operator’s Sightline.

The company further says another key uptime improvement on the G-Series large-frame machines is the integration of John Deere WorkSight, an exclusive suite of telematics solutions that increases uptime while lowering operating costs. At its heart, JDLink Ultimate machine monitoring provides real-time data and health prognostics to suggest maintenance solutions that decrease costly downtime. Remote diagnostics enable a dealer to read codes, record performance data and even update software without a trip to the job site.

Company made several other enhancements to these compact G-Series machines. 

Source: Information has been obtained from company’s press release

Here’s How Passage of GST Bill Will Drive Material Handling Equipment Market

After Goods and Services Tax (GST) bill passed in the Parliament, the e-commerce and logistics companies will now need huge numbers of warehouses across the country, which will lead to fetch huge investment to set-up number of warehouses in the country. The demands of warehousing in the country have increased in last few years after the emergence of e-commerce business.

As we know, rising number of warehousing will require huge amount of material handling equipment for placing and carrying the goods to one place to another and avoids the damages. Therefore rising number of warehousing in the country will drive further demand of material handling products and manufacturers are likely to see better sales in coming years as more warehouses will start coming up in India.

Passage of GST Bill will now encourage e-commerce, manufacturing companies, Logistics companies to shift to advanced and big size of warehouses across the country. As government allowed 100% FDI (Foreign Direct Investment) in warehouses, would also encourage the foreign players to get into the construction of warehousing. Earlier warehousing was only limited to metro and big cities, now the demand would shift to tier-II and tier-III cities as well, which could lift the sale of popular material handling equipment like Forklift, Conveyors and other.

Property consultant JLL India’s report said, “The existing, top warehousing hubs are Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. These eight city hubs put together had a cumulative supply of organised Grade-A and Grade-B warehousing space of around 97 million sq ft in 2015 and this is expected to grow to around 116 million sq ft by the end of 2016.”

It further adds GST will result in emergence of new hubs like Belgaum, Bhubaneshwar, Coimbatore, Goa, Guwahati, Indore, Jaipur, Kolhapur, Lucknow/ Kanpur, Ludhiana, Nagpur, Patna, Raipur, Ranchi, Vapi and Vijayawada.

Last month, Amazon India has opened its biggest fulfilment centre in Sonipat, Haryana, the warehouse covers the area of 200,000 sq. ft, and this is Amazon India’s 22nd warehouse in the country. Recently Mr. Ram Vilas Paswan, Minister of Consumer Affairs, Food & public Distribution announced that Central Railside Warehouse Company (CRWC) has planned 10 new warehouses at rail heads. The more warehousing comes up in the country, the sale of material handling products will jump.

As per the media reports, Asia’s leading provider of sustainable urban solutions company, Ascendas-Singbridge Group planned to put separate fund to invest in warehousing segment in India. The company would set up Logistics Park on 50 to 100 acres of land in the vicinity of major cities. There were also reports that, Dutch pension fund manager APG and U.S based company Warburg Pincus are also planning to invest in modern warehouses in India, the investment in warehousing indicate the future requirement of equipment in India in coming years.

Due to rising number of warehousing in India, various material handling products such as Forklift, Conveyors, Stacker, Hand pallet truck, electric towing truck, Movable Dock, Crane, Shelves and other different machinery sell would jump in near future.

As per the report of CARE Ratings, the Indian logistic industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 15-20% during FY16-FY20, the rapid expansion of logistics industry is directly proportional to the rise of warehousing sector.

Sagarmala Programme Will Require Huge Amount of Construction Equipment

As we are aware, the demand of construction equipment only emerges when infrastructure developments occur in any country. In recent times, we have seen almost all the reports based on the demand of construction equipment projected the huge requirement of different types of construction equipment in India by keeping various infrastructure projects in mind, such as roads, ports, railway, airports, smart cities, public transportation infrastructure and others.

Government of India has launched the Sagarmala Programme with the aim of modernising port-led development in the country and exploit the potential of India’s approximately 7,500 km long coastline and 14,500km of potentially navigable waterways.

The programme involves drawing up a National Perspective Plan (NPP) for Port Modernization & New Port Development, Port Connectivity Enhancement, Port-Led Industrial Development and Coastal Community Development. As part of the NPP, total 173 projects have been initially identified across the programme objectives which will result in significant investment in maritime infrastructure, create employment, reduce logistics cost and boost merchandize exports over the next decade.

The port-led developments indicate the requirement of construction equipment in the country. The development would drive the sale of construction machinery in the country and manufacturers could see the rise in their sell in coming future.

As per the official estimates, the ambitious Sagarmala Programme will mobilize more than Rs. 4 lakh crore of investment and will be able to create 1 crore new jobs, including 40 lakh direct jobs in the next 10 years.

For Port Modernization & New Port Development, 50 projects have been identified to increase the port capacity from 1400 MMTPA to 2500 MMTPA by 2025, at an investment of Rs. 1 lakh crore. For promoting port-led industrial development, 14 Coastal Economic Zones covering all the Maritime States and Union Territories have been proposed.

To enhance the port-connectivity to the country’s production and consumption centres, 65 projects have been proposed at an investment of more than Rs. 2 lakh crore. This includes10,000 km of last mile port-connectivity infrastructure, 12 new freight expressways, heavy haul rail corridor to transport coal, new pipelines for transporting crude and petroleum products, development of prioritized inland waterways and new multi-modal logistics hubs, government said the official statement.

Last month (July 20), Union Cabinet has approved the incorporation of Sagarmala Development Company (SDC) under the Companies Act, 2013, with an initial Authorized Share Capital of Rs. 1,000 crore and a Subscribed Share Capital of Rs. 90 crore. The SDC would provide equity support to the project Special Purpose Vehicles (SPVs) and funding support to the residual projects under the Sagarmala Programme.

Government recently said, it has indentified six potential new ports under Sagarmala Programme are; Vadhavan in Maharashtra, Sagar Island in West Bengal, Paradip Satellite Port in Odisha, Enayam an Sirkazhi in Tamil Nadu, Belekeri in Karanataka have been identified and Duggirajupatnam, Andhra Pradesh.

As it is projected Rs. 4 lakh crore of investment mobilize under the programme, various construction equipment such as; Excavators, Backhoe loaders, Cranes, Graders, Batching plant, concrete mixer, Tippers and other different types of construction machinery demand will rise in the country.

Along with port-led development, seven Multi-Modal Logistic Parks (MMLPs) has been also proposed in Chhattisgarh, Madhya Pradesh, Odisha, Telangana, Uttarakhand and West Bengal under Sagarmala Programme.

During recent United States visit of Mr. Nitin Gadkari, Minister for Road Transport and Highways and Shipping, American ports have shown their interest to participate in the port-led development in India, which is to mobilize huge investment.

The port development will not only raise the demand of construction equipment, but also drive the sale of material handling machinery as increased port capacity will require huge amount of material handling equipment to load and unload the goods and container at the ports across the country.

Fork lift truck, Mobile crane, Conveyors, Stackers, Straddle carrier, Ship loaders, Tug-master, Container crane, Front/side loader, Bulk material handling, Automated storage and retrieval system and different other machinery sell would jump after ports will increase its existing capacity.

According Mr. Gadkari, the Sagarmala Programme could save annual logistics cost close to Rs 35,000 crore.

Forklift is One of The Versatile Materials Handling Machinery

Forklift or Fork Truck is one of the most used and versatile machine in Material Handling Equipment (MHE) segment. The Forklift used to move and lift construction and goods material in short distance at a construction site, industrial units, warehousing and across the sector.

The forklift is one of the major materials handling equipment, at construction sites; it is used for carrying various construction materials across the sites. Usage of Forklift, smoothen the work at the site and help the workers to move the material like bricks, steel and other material easily. At Warehouse and industrial unit, Forklift has proved its worth for several years, it plays a key role in loading, unloading and placing the goods items at the right place and help in avoiding the damage of the goods products.

Along with Crane, it is one of the other major used MHE at Port; it carries the container and help in loading and unloading these containers at the Port across the world. The smooth operation at Port only possible because of Forklift, it is said, this machine plays the intermediary role between huge cranes, trucks and warehouses or Logistics Park.

Many of us just understand Forklift and its general usage, but we are not aware of various types of Forklift, which are designed and made for specific work at the site. One of the most popular or common machine is Counterbalance Forklift Trucks, when we think of Forklift, many of us think of this machine, for example, when people think of Backhoe loader, they think of JCB Backhoe loader, similarly when people think of Forklift, they think of Counterbalance Forklift Trucks. This machine is available in electric, diesel and gas.

The other different forklifts are; 3 Wheel Counterbalance Forklift Trucks, Reach Trucks, Hand Pallet Trucks, Powered Pallet Trucks, Sideloaders, Teletrucks and other.

The major companies which manufacture different types of Forklift are, Godrej, Nilkamal, Escorts, Voltas Material Handling Equipment, Toyota Material Handling India, Caterpillar, Komatsu and others.

People who prefer second-hand Forklifts, should look at various online platform to buy the used Forklifts. An emerging e-commerce portal for second-hand construction equipment and material handling is www.equipmentonestop.com, which has extensive varieties of different types of equipment including forklift.

As Indian economy is growing and industrial and warehousing sector is expanding, it would help the sale of different types of Forklift in near future.

Auction of Coal Blocks to Drive The Sale of Tipper And Dump Trucks

The sale of Tipper trucks and Dump trucks are expected to rise further in the second half of this financial year as Coal India Ltd (CIL) is holding forward e-auction of coal blocks for power producers to meet the rising demand of the electricity in the country. CIL is the major producer of coal in India.

The heavy Tipper trucks and Dump trucks mainly in demand for coal mining and infrastructure projects, therefore all the major players of the country are expecting huge demand of such heavy vehicles mainly from these two sectors. Once the mining of other minerals begins, tipper sales may rise further in the future.

It is reported, Special forward e-auction of coal blocks for 2016-17 for phase III is being held this month. CIL has already prepared a roadmap to achieve the target of producing one billion tonne coal by 2020 and for this financial year, the target is set to produce 598.61 million tonnes of coal, last fiscal (2015-16), it had produced 538.75 million tonnes of coal.

The rising demand of the coal in the country, does not only show the requirement of the electricity, but it also indicates huge requirement of such heavy commercial trucks, which needed for loading and carrying the coal in massive number.

Various trucks manufacturers are coming up with new models and also working-on to expand its existing capacity of production to tap the coal sector. These truck makers are coming up with high-powered Tippers and Dump trucks that can get into deep coal mines to carry the coal.

Under the provisions of the Coal Mines (Special Provisions) Act, 2015, 75 coal mines (31 by way of auction and 44 by way of allotment) have been allocated so far. Mining operations have commenced and mine opening permission granted in 11 auctioned coal mines as on 20.07.2016, the government informed Parliament in recently concluded session.

Due to rising demand of heavy commercial vehicles in various sectors including Mines, Construction and Logistics, the sale of medium and heavy commercial vehicle (M&HCV) has been witnessing positive growth over the period of last one year, last fiscal (FY2015-16) M&HCV segment grew by 30% with sales of 302,373 units as compared to fiscal year (2014-15).

In the first four months (April-July) of current fiscal, 92379 units of M&HCV has been sold, during the same period in last financial year 85135 units were sold in the same segment. Society of Indian Automobile Manufactures (SIAM) said, M&HCVs has registered a growth at 14.49% during April-June period of 2016-17.

The recent sale data of M&HCVs indicate that commercial vehicles market has started reviving and as more coal mines and construction work begin, the heavy-duty Tipper and Dump trucks will get new heights in terms of sale. Manufacturers like Tata, AMW, Volvo, Eicher, Ashok Leyland, Scania, Daimler and other would get huge demand for their various products in commercial vehicle segment from mining and construction companies in coming months.

As CIL sets the target of one billion tonne of coal production over next five years, it shows the positive growth of heavy commercial vehicle, including Tipper and Dump trucks is here to stay for a long period, sell of both new and used Tipper and Dumper will see positive growth during this period.

Source: Information has been obtained from government’s release, SIAM, PTI and other media reports

5 Factors to Consider Before Buying Construction Equipment

5 Factors to Consider Before Buying Construction EquipmentRevival of Indian economy and rising infrastructure projects in the country motivates infrastructure and construction companies to buy new construction equipment to complete the projects. So many people must be planning to purchase new equipment due to the rising number of projects across the country.

Making right decision while buying an ideal machine which suit your project requirement is not an easy task, because heavy equipment are very costly and needed huge investment, so making right decision is very crucial at the time of purchasing equipment.

There are few things which people must consider before buying the heavy equipment.

Prefer well-known company

If you are planning to buy new equipment, the first and foremost thing you should give priority to the brand, because to become brand in any segment is not an easy job, it requires decades to win the trust of its customer. Branded companies have strong and positive track record to provide best quality of products. A company which becomes a brand after struggle of several years will not compromise with quality and using such machinery give the advantage of cutting edge. Products of such companies are very reliable when it comes to performance on the site. However, buying a machine from market leader may cost you a little extra but it could give you the assurance of best quality.

Another advantage of buying machinery from a well-known company is that, they manufacture machine such way that it requires less maintenance, which will save your regular maintenance cost. Regular maintenance does not only cost you extra money on a regular basis, but also affect your work.

Suggestion from Experts

You might be in the construction business for many years, but having technical expertise and being in the business is two different things. Experts are aware of latest trend in the market and they will suggest you the machine as per your requirement. Companies only talk about good features of the product and do not highlight the negative aspects of equipment, where experts play a crucial role helping you to understand negative aspects of the machine. Industry experts are having experience of many years, so their suggestion before buying heavy equipment will add advantage during your planning process.

Go along with expert to the showroom

It is a clever decision taking an expert along with you when going to the showroom of heavy equipment. A person who does not have much knowledge about machinery will not be able to ask fundamental questions related to the machine but expert can personally ask various question related to the products and he will be also able to check equipment personally, which could give you satisfaction before investing huge amount in particular machine.

Technology

The new technology is changing the face of construction industry, so do the work culture at a construction site. Heavy equipment with latest technology is impacting overall performance of the industry. Such machines take less time to complete the project with minimum manpower as compared to older version of the machine.

Equipment with latest technology helps in attracting more business to the contractors, such contractors get more projects, and clients prefer those contractors who are having advanced technology heavy equipment. Works in construction field get smoother and faster with the help of equipment fitted with cutting edge technologies and such machine help in completing the project on time.

Fuel Efficient machine

Heavy construction equipment adds a huge amount of cost and even after purchasing these machines. So it is always advisable to prefer the equipment which consumes less fuel, which will help you to save huge money in long term. Fuelling is one of the major cost, contractor have to bear after the purchase.