The utility industry is regularly required to call on an enormous and varied range of specialists; from mapping, to drilling, to wastewater treatment, to asset management, to pipe relining, to pipeline integrity, to land access, to risk management, and the list goes on. To make the process a little easier, Utility is bringing together experts from various fields to answer your questions.
Question: How can contractors balance high and low demand periods in microtunnelling?
Microtunnelling, like many other industries, does not have stable demand. There are times of high demand and low demand, and it’s hard to predict how long they will last or when they will change. How contractors deal with these periods can be the difference between a business continuing or going under.
During periods of high demand there is an excess of work and it’s not uncommon to see a lot of new contractors come up and old contractors come back. They enter the market, buy new machines and complete the jobs available. But at some point, this changes, and when a low demand period comes there’s not a lot of work available so inevitably some companies go broke.
There are two major factors that need to be taken into consideration when making decisions to best balance demand periods and ensure long-term business prospects.
To buy or not to buy?
The capabilities of contractors would be increased if more continuity were present in the industry, as contractors would know how much work was always available, and investing in new machines and equipment would be viable. However, the industry is developer-driven and there is no continuity.
During busy periods all your machines may be out in the field, and you may feel pressured to invest in a new machine as you don’t want to let clients down and/or miss out on money that could be made.
While the short-term payoff of additional machines may seem great, the reality is in the long-term, you may not have work for that machine – and if you’ve over-invested in equipment that isn’t able to do any jobs, and you may be at a loss.
Ensuring your equipment is versatile is also an important part of dealing with the high and low periods.
For example, if you buy a machine that can go from 350mm to 1500mm with simple modifications through a variety of ground conditions, it can be adapted with little to no cost.
This means when it’s quiet in one area, you’re able to cover other areas which have more work available.
However, contractors will often buy a machine specific for a job, which limits what they are able to achieve with it on other jobs, unless the same conditions are present or extensive modification is done. This costs money, and in low demand periods funds may not be available for additional machinery or modifications.
When it comes to dealing with high and low periods in the microtunnelling industry it is important to look to the long-term, look for versatility, and carefully consider the cost and benefits of investing in any new equipment.
About Stuart Harrison
Global microtunnelling pioneer Stuart Harrison is the Managing Director of Edge Underground, where he specialises in on-grade microtunnelling installations with millimetre accuracy. Stuart is also the inventor of the Vermeer AXIS Guided Boring system, and he is constantly working to improve the effectiveness of this and other trenchless systems used in the installation of gravity sewers. To discuss your next microtunnelling installation, contact Stuart on 1300 JACKED or at [email protected].