Poor equipment utilisation is one of the largest costs contractors rarely see clearly. An excavator sits idle on one site while another site hires the same machine from a rental company. A generator runs all day to power a single tool. A crane stays on site for weeks after its last lift because nobody confirmed it could be released.
Equipment utilisation measures how much of the time a machine is available it is actually doing productive work. It applies to owned plant and to hired equipment, and in both cases low utilisation means paying for capacity that produces nothing.
Most contractors know their equipment is underused. Very few can say by how much, or which project is paying for it.
More than most fleet owners would guess. Teletrac Navman’s 2026 utilization report, based on a survey of 600 fleet operators, found that fleets estimate 40 to 50 percent of their equipment is underutilised or sits unused half the time. About three quarters still track utilisation manually, and 74 percent named data accessibility as their biggest barrier to improving it.
The same survey found that around 27 percent of fleets rent or buy extra equipment to cover downtime, and two thirds report assets being held on site unused. That combination, idle owned machines alongside new rentals, is where the money goes.
The information is split across too many places. The plant department knows what the company owns. Site teams know what they are using today. Procurement knows what has been hired and from whom. Finance sees the rental invoices a month later. Nobody holds the whole picture.
Charging is the second problem. Owned plant is often charged to projects at a flat internal rate, or not charged at all, so project managers have no reason to release machines early. Hired equipment is charged when the invoice arrives, weeks after the decision to keep it. Both make the true cost show up late and in the wrong place, the same pattern we described in why construction projects go over budget.
When a site needs a machine, the quickest route is a phone call to a rental company. Checking whether an owned machine is idle on another project takes longer, so it often does not happen. The same logic applies at the end of a hire. Off-hiring requires someone to confirm the machine is no longer needed, and until they do, the rental keeps running.
Long hires on critical items carry the same planning risk as any long lead package, which we covered in why procurement delays on long lead items start in the planning stage. Equipment needs a plan, not just a request.
The simplest measure is productive hours divided by available hours over a period, expressed as a percentage. Some contractors use engine hours from telematics, others use timesheets or daily logs. Whatever the method, it should be consistent across projects.
It depends on utilisation. Machines used steadily across projects usually cost less to own. Machines needed occasionally or for short peaks are usually cheaper to hire. Without reliable utilisation data, the decision is guesswork.
Check owned fleet availability before every new hire, set an expected off-hire date when equipment is requested, and charge both owned and hired equipment to projects at a realistic rate so project teams see the cost of keeping machines on site.
The fix is a single register of owned and hired equipment, showing where each machine is, which project it is charged to and whether it is working. New requests check owned availability first. Hires carry an expected off-hire date, and the site is reminded before it passes. Each project carries the real cost of the equipment it holds.
That is what construction ERP looks like when plant and procurement share one record. Mismar works with contractors across UAE and KSA to see equipment cost by project, not just by invoice. If your sites are hiring machines you already own, let’s get on a call.
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