Stefanie Schwem, Project Manager, Mahaffey Structures
Petrochemical businesses often purchase equipment as an investment for tomorrow. However, owning rather than leasing can be a cost that doesn't pay off over time.
When you own, you face many unpredictable expenses with maintenance, storage and transportation, making it difficult to determine the full cost of ownership. When you add in the cost of replacing obsolete equipment, you have to ask yourself whether purchasing is the right plan for your business. There are three key ways renting your temporary structures helps control costs and ultimately save money. Consider these when you evaluate options for your next project.
Maintenance and repair costs
Leasing is generally the lowest cost to use a structure for a designated period of time. Payments are fixed for the term and can include regular maintenance costs.
Temporary structures are known for being easy to maintain. Yet, even though most are built to withstand the toughest storms, unexpected damages do occur. No matter what happens to your structure, your rental vendor and their expert maintenance crews will be there to make quick and safe repairs, so you can get back to work.
When you own, you are alone in facing the challenge of finding workers with the skills required to properly install your temporary structures, repair their specialized features, and dismantle and remove the structures from the site when they are no longer needed. Not only can this be expensive, but relying on an unskilled or inexperienced repair crew is a safety risk you can't afford.
Storage and transportation costs
Space is at a premium on petrochemical sites, making temporary fabric structures ideal for maximizing square footage and limiting the length of time your structure is up. But what do you do with your structure's components when they aren't in use?
Not only is it difficult to find space to house your equipment, but improper storage and exposure to the elements can damage your components and weaken the fabric, making structures unreliable and even dangerous.
Furthermore, moving your owned equipment between the installation site and storage space can be costly and difficult. With rented equipment, a vendor takes away these costs and headaches by letting you know upfront what you will pay to install, maintain and dismantle your temporary structures.
Obsolescence costs
At one time, you could plan to use your purchased temporary structures for the full life of the product. Today, however, petrochemical safety recommendations regularly make equipment obsolete. Will the temporary structure you purchase today be in good repair and compliant with safety regulations tomorrow? For example, API R756 specifies that structures purchased under old guidelines may have to be constructed farther away from the worksite, meaning lost time for workers and lost profits for you.
Leasing equipment gives you the opportunity to get the newest products on the market. Temporary structure vendors are always prepared for strict new safety guidelines and will make sure your installations are compliant for the lifetime of your lease.
Additionally, the capital you conserve by leasing equipment can be used for other company expenditures, such as new product development, increased marketing and promotions, sales expansions and more. It's important to note that a rental or lease agreement is not a loan. The entire lease payment is treated as an expense item, simplifying cost accounting and eliminating depreciation controls.
When planning your company's future, you may consider that purchasing equipment is the best strategic investment, but for most of the petrochemical industry, renting equipment is a smarter business decision. Renting temporary structures can help control and minimize maintenance, storage and replacement expenses. In addition, rented equipment offers an accurate and reliable cost figure that you can depend on to evaluate and reduce your business overhead, a smart business decision for today and tomorrow.
For more information, call Stefani Schwem at (281) 377-6993 or email her at stefani@mahaffeyusa.com.
