An Overview of Changes in the Equipment Industry
The construction industry is one fraught with peril and risk, but improved OSHA safety standards and constantly improving equipment and machinery work hard every day in conjunction with better insurance coverage to protect contractors and their workers. Let’s look at the history of changes in the equipment industry and how these changes have affected the business of construction and contracting.
The 1960s was a huge era in the construction industry. The Interstate Highway System was being built, bolstered by the Federal Aid Highway Act of 1956 and would go on for a full 35 years. High-power, huge machinery was introduced in this era for the first time. New machinery in the ‘60s included high-powered scrapers to move dirt and rock, monster machines like surface mining draglines, huge steam shovels and 360-ton trucks for hauling material. In fact, of all the equipment introduced in this era, only hauling trucks have increased in size.
The oil crisis of the ‘70s increased demand for coal across the nation, and earth-moving equipment became all the rage. There was a waiting list of up to four years to get hold of large machinery during this era.
The country was hit by a major recession in the 1980s, which had a stark transformative effect on the equipment industry. In just a few years, many companies went under and others consolidated. In the space of ten years, a lot of companies disappeared from the landscape. The four major manufacturers of earthmoving equipment were Euclid, Harvester, Allis Chalmers and Caterpillars. Today, only Caterpillar remains under its original name.
In the 1990s, environmentalism became a major social and political movement, and its effects continue to be felt today. A wave of new laws were issued to protect the environment, including those regulating diesel emissions, which brought on many drastic changes in the equipment industry. During this era, new engine technology was developed that still delivered the needed power, but functioned at a much cleaner and more efficient level.
We are now into the second decade of the 21st Century and the industry continues to evolve and change. The recession of 2008 hit the construction industry hard, and a new model of equipment distribution arose. The focus now is no longer on companies owning heavy machinery, but leasing it as needed. In the 1980s, rental comprised less than 20 percent of the market. Now, over 40 percent of contractors lease, rather than own, their heavy machinery.
This presents challenges for equipment manufacturers who have to make available a variety of specifications to meet all the diverse needs of the industry at a rental level. This has resulted in fewer optional and luxury features and a greater variety of base-level operations.
Changes in the equipment industry have gone hand-in-hand with changes in the construction industry and the social and financial landscape, and insurance has changed to adapt to these new conditions. If you are looking to upgrade your insurance to the best coverage available, read up on specialized equipment coverage and give us a call for a review of your policy today.