In the previous article we worked out what a workday really costs. The same logic applies to machines — just in bigger chunks, and far less visibly. A machine doesn't cost money only when it's working; it costs money even when it's sitting idle on site.
Depreciation, insurance, mandatory servicing, tires, wear parts — these are fixed millions every year, regardless of whether the machine worked. And the fewer operating hours a machine racks up, the fewer hours that fixed sum gets spread across. The real hourly cost of a rarely used machine can end up brutally high, while your quote is built on an hourly rate that just "feels right."
The hidden price of utilization
Take a simplified example with an excavator. Say you plan for 800 operating hours a year — that's what you use to spread the fixed costs, and that's where the hourly rate in your quotes comes from. Then at year-end it turns out the machine actually worked 512 hours. That's a −36% utilization gap.
This doesn't mean the machine turned out cheaper — quite the opposite. The same fixed cost is now carried by fewer hours, meaning every hour worked became more expensive than your budgets assumed. You may have priced the entire year with an hourly rate that, in reality, never existed.
We ran this calculation across our own fleet (CAT excavator-loaders, a mini loader, JCB, trucks): total annual cost divided by actual operating hours, per machine. The real hourly rates that came out were wildly different — some machines worked below the market rental rate, while for others, low utilization drove the hourly rate way up. You can't see this by gut feeling. Only the numbers reveal it.
Charged to the project, or carried by the company?
If you don't charge machine cost to your projects, idle time eats into the whole company — and every job looks more profitable than it really is. If you do charge it, you immediately see what each job actually costs. The only question is: are you using actual operating hours, or the planned figure that never materialized?
In Tektana, machine-hour tracking doesn't just record where a machine was — it also records how much real cost lands on a given project. That way, fleet cost isn't split by feel, but by numbers. And that's what ultimately tells you: which machines are worth owning, and which are better off rented.