Small Package, Big Impact: Compact Equipment Sparks a “Mini” Revolution

March 1, 2003

Last year – despite a broad downturn in large building project – sales of those tight-space performance champs were up again, reports Pat Bright, excavation products manager for Gehl in West Bend, WI. Residential work remains the bright spot in an otherwise weak business, and the churning of compact pieces working hard has become pervasive throughout it. As Bobcat dealer Frank Garcia of Miramar Bobcat Inc. in San Diego, CA, describes, “Here we’re now building houses with only 4.5-foot setbacks, and some even butt up against each other. Nothing else but a compact machine can get in there. More and more we see bigger equipment just dying on the vine because [it] can’t get in to do the job.”

Access to restricted spaces is one strong suit with compacts; another is ease of portability. Virtually every user cites the huge convenience of lighter weight and smaller size. You can haul a mini-excavator or track loader almost anywhere on a small trailer pulled by a good pickup truck, saving the cost of a tractor rig and a commercial driver’s license. “It’s so much easier,” relates Garcia, “to move the small pieces around, get them to a job site quickly, and finish in a fair time.” In many urban and suburban settings, as J.R. Bowling of Rayco Manufacturing in Wooster, OH, notes, “There are a lot of places where, for various reasons, you just can’t operate large dozers and excavators anymore unless you’re a demolition contractor.”

All of which is rather ironic, considering that a dozen years ago several importers tried to launch compacts here and found only a feeble reception. Several early players gave up and retreated. It took nearly a decade before sales began to reach a critical mass, and this largely coincided with the boom in home improvement in the late 1990s, Bright points out. Hot sales figures for compacts have spurred manufacturers to add even more power and capabilities to their original lineups. For example, at a CONEXPO show in 1999, Kobelco launched a new excavator line having extremely short (or nearly zero) swing radius and a compact center of gravity – specifically designed for tight spaces. With these machines, work that formerly took days to do with very tiny equipment or pick-and-shovel could be banged out in a few hours with much larger equipment, notes Kobelco Product Manager Reece Norwood. In three-plus years since that launch, Kobelco has more than doubled its compact-equipment market share, he says. Competitors have redesigned their product lines accordingly. Other manufacturers are adding muscle to engines, increasing the bucket breakout force, and enhancing the hydraulic engineering while still retaining the small footprint. All of this is feeding a virtual cycle: More productive machines are luring buyers and spurring still more innovations.

Bob Taylor, equipment manger for McLeod Land Services in Sarasota, FL, purchased his first small, tight-radius excavator (a 310 Kobelco) in mid-2002 and reports that only weeks later he was getting a lot of use for it, digging small water lines and concrete footing for residential buildings. Before the short-radius excavators came along, he recalls, McLeod operators were occasionally hitting and knocking into things. McLeod’s land development business runs a gamut of projects – from the huge, such as relocating whole lakes, to digging small backyard pools and utility trenches. Its fleet numbers more than 100 pieces, predominantly larger ones, including several mass excavators. Even so, to do the increasing number of jobs in the small category, Taylor says, “We go all the way down to little-bitty excavators and small Japanese backhoes with rubber tracks for tight spots. Even the biggest companies around here have been getting into these mini-excavators. They’re pretty powerful little machines. And of course they save us a lot of shoveling.”

Elimination of hand labor “is frankly the real key to success of compact equipment,” maintains Product Manager Keith Rohrbacker of Kubota’s regional office in Torrance, CA. The Japanese firm imports very small excavators and tractor-loader backhoes – “nothing over a 1-yard-size machine bucket,” he says. Sales of minis often occur through a kind of domino effect, Rohrbacker notes. One earthmoving contractor sees how his competitor has replaced hand labor with a small machine, which does the work in a third of the time. Soon that competitor buys one, and so on. Rohrbacker cites another strong selling point: “The small machine doesn’t need workers’ comp, it doesn’t show up late, doesn’t take lunch breaks, and doesn’t complain of a bad back.”

Compact equipment usage in California has been skyrocketing in residential landscaping, for sprinkler systems, for digging tree holes, for trenching for gas or other utility lines, and for extensive earthquake retrofitting. The latter requires exposing foundations in limited spaces. Before the advent of compact machines, “it was usually the pick, shovel, and wheelbarrow,” Rohrbacker recalls.

Snarling Bobcats

Early designs of compacts were relatively limited, compared to current models. “Basically they were just small buckets, good for fine grading or for a plumber digging in tight spaces,” notes Fred J. Willert, owner of F.J. Willert, a grading and excavation contractor based in Chula Vista, CA. Willert owns about 60 large pieces and mainly does grading and earthmoving on larger industrial and commercial projects. He probably typifies the early skeptic who then undergoes a conversion experience. Eyeballing his first mini in the early 1990s, Willert remembers agreeing with the joke that they looked just like toys. His doubts soon vanished, though, when he took on a backfilling job for bleachers at a high school stadium, where access by any standard equipment was impossible. He phoned a friend who owned a Bobcat and invited him over. “When I saw how good his operator was, and what he could do with [the machine], we just got going from there,” Willert recalls.

He didn’t buy immediately, however. Instead, he rented Bobcats as often as 30 times a year for several years. Finally, in 2001 Willert purchased a Bobcat 763, and a year later he sprung for another one capable of carrying a relatively large 60-in. bucket. “They’re both excellent for fine grading and backfill in restricted spaces,” he states. His men typically utilize both Bobcats at least 30 hours a week doing backfill on curbs and assorted finishing. Previously, whenever he encountered tight spaces, he brought in the skid loaders. But he likes the speed, quickness, and maneuverability of the mini machines much better.

Bobcat (now a division of Ingersoll-Rand) undoubtedly deserves the credit for pioneering compacts of many kinds. Its product line now includes skid-steer loaders, track loaders, all-wheel steer loaders, mini-excavators, versa-handlers, telescopic reach machines, loader backhoes, and even small walk-behind machines with a loader on the front – portable power compaction, says Mike Fitzgerald, Bobcat product representative in West Fargo, ND. In San Diego, CA, estimates Bobcat’s Garcia, the company held 95% of the local market a half dozen years ago, which probably was representative. Since then, surging competition has cut modestly into Bobcat’s dominance.

“Swiss Army Knife” of Construction Equipment

Early Bobcats were indeed, as Willert notes, simply “small bucket machines” until the company introduced a wildly popular quick-hitch system for driving hydraulic attachments. Assorted tools for it have proliferated since its inception: hammers, thumbs, tampers, blades, brooms, plows, compactors, trenchers, pallet forks, rakes, grapple attachments, augers, myriad buckets, and more. Currently, notes Garcia, you can get 100 or so attachments, with about a dozen being popular and well known. Other players in the attachment game include the Gehl subsidiary ceattachmentsinc., Caterpillar, Komatsu, Kobelco, and JCB, although Garcia estimates that Bobcat still makes or owns about 90% of the volume. Interchangeability of attachments with various manufacturers’ compact equipment is far from standardized yet, but it seems to be working adequately.

The attachment craze has, in turn, spurred another revolution of its own. Having these tools, a small contractor can often complete an entire landscaping or other dirt job by himself, “thus eliminating the need for many specialty subcontractors,” notes George Chaney, marketing manager for compact equipment-maker JCB in Pooler, GA, and manufacturer of about 40 tools for its compacts and others. Proliferation of tools also has meant that, as Rohrbacker points out, “Equipment stays busy working all the time. You enhance your investment by making your equipment far more versatile.” And high utilization is how any contractor makes money.

High utilization also has made compacts even more competitively attractive compared to bigger equipment that doesn’t allow add-ons. Dan Rafferty, product manager of Takeuchi US in Buford, GA, offers an illustration of the advantages: “Suppose I come to a job site with a TL 150 [a Takeuchi mini-excavator], working beside a Caterpillar 953 dozer. We dig out basements together.” Of course, the dozer outperforms the compact, but at the end of the digging, “The 953 pretty much has to go back to the yard – or perhaps it can go do some fine-grading somewhere if the operator’s really good.” By comparison, with the more versatile mini-equipment, “I can drop off my tooth bucket, attach a smooth bucket, and more easily do a good job of fine-grading,” Rafferty maintains. “Or I can put on a trencher on the loader’s front end and trench down 4 inches to run the pipes. I can then remove the trencher, put on a 36-inch bit augur, and drill holes for planting trees. Or for smaller trees I can use an 18-inch bit. There’s tremendous versatility with a compact piece that the big track loader just doesn’t have,” and utilization becomes far greater. Some of Rafferty’s customers have downsized from Cat 943s to smaller TL 150s (a 10,700-lb. track loader) for excavating basements and are happy they did, he reports.


Another operational development assisted by compacts: More machines readily complement each other, either in the big-and-small combo or two small machines in tandem. McLeod’s Taylor, speaking from a work site in Palmetto, FL, boasts, “Now that the little excavators come with blades on the front, we can drive them into a housing subdivision [and team-up there with a Bobcat steer loader] for use by cleanup crews or other quick jobs. Working together this way, they’re fast. They’re small. They get you in and out. We get a lot of use out of them.” As for the mini-excavator equipped with a blade, this particular fusion makes it the only digging machine needed in most residential work, Taylor claims.

Garcia adds that a small, rubber-track mini-excavator with a blade and a digging arm can go 360 degrees – “anywhere you want and on a two-to-one slope where a backhoe can’t go.” Digging a backyard swimming pool, for instance, it will first move the dirt behind it to a space where the bigger loader can then haul it away. “A lot of contractors have been buying this combination, calling it a ‘system,’ says Garcia. “With the two pieces together, they can dig a good-size pool in 12 hours instead of two days.”

Another illustration comes from Bobcat’s Fitzgerald, who recounts how a townhouse condominium project needed fill between structures and in the rear – where regular-size pieces couldn’t squeeze in. The solution? “Trucks dumped the fill on the front side,” he describes. “A larger wheel loader brought buckets of material to the back, where all of the material was distributed between homes and leveled by compact equipment.” He observes that, to an increasing degree, “owners of big pieces need small equipment for filling and finishing work. You don’t take a large dozer in to level off two loads of material.”

One Small Caveat: Size Still Matters

All that said, it might be too early to run out and liquidate your herd of heavy graders just yet. Big machines still fill a critical niche, as every user and vendor will attest. Compacts hardly were designed for roadwork and bridgework, for example, nor for moving earth in woods, fields, farms, and rural waterways. These jobs almost always will be done more profitably with large equipment. Bigger is still better when it helps you win bids and make more money.

Willert, for one, still prefers to deploy the largest possible piece for a job. He reports that he’s currently digging more basements with his big Cat 375 excavator, which sports an 8-yd. bucket, whereas, by comparison, “not too many years back we were using small dozers and rubber-tired loaders to dig them.” Recently, too, he used the bigger stuff to tunnel through California’s coastal hills for a new extension to San Diego’s light-rail system. “We bought the big 375 especially for that job, and now we’re very pleased,” he remarks. He is still keeping the excavator busy. At the tunneling job site, he reports, the 375 was loading big trucks in less than two minutes. Willert also did the earthmoving for San Diego’s new baseball stadium – a complex undertaking in which he utilized the full spectrum of machines, from large dozers and excavators down to Bobcats and pick-and-shovel crews.

Bigger Buckets for Bigger Bucks

Typically, large jobs are bid on cents-per-cubic-yard moved; hence, bucket size is still the critical term in the profit equation, notes Mark Sprouls, a Caterpillar spokesman. Small equipment, almost by definition, can’t compete. Even if you’re using a D9 and scrapers, he says, “The cents-per-cubic-yard, versus using articulated trucks and loaders, comes in at half the cost. First you have to get the job by bidding competitively, then you have to use the right tools to make a profit.”

Fitzgerald agrees: “If you’re loading dirt into a line of trucks on an hourly rate, you’re more efficient with a large wheel loader than with compact equipment.” For that matter, adds Sprouls, “Three skid-steers with three operators – versus one big bulldozer – will not be a moneymaker.”

Besides, developers who are paying you will feel much happier about forking over their money while they watch huge dozers and scrapers at work than little machines working shorter hours – even at a lower hourly rate.

Even so – and arguing on the other side again – a D6R tractor is going to set you back $250,000­$300,000 perhaps. By comparison, you’ll probably pay only a tenth of that sum for a durable midsize track- or skid-steer loader, according to one professional. Thus, the big investment demands the highest possible utilization rate.

Out in the open country, at least, the decision to “buy big” is usually clear-cut, observes Greg Jueneman, estimator for Orval Jueneman Dozer Service in Hannover, KS, and co-manager of a fleet of 60-plus earthmovers. Jueneman believes, “Generally you have to be thinking of upgrading size to keep ahead of the competition. Bigger size means we’re able to do more work faster – which greatly reduces the cost of the overall project to us.”

When Jueneman bids jobs, he often shows clients the comparative hourly rates on a D8 or a D7H (both at around $95). “And they say, ‘Gosh that’s a heck of a lot more expensive than the D6H (at $70 to $75).’ But I tell them, ‘You’ve got to realize that they’re doing one-and-a-half times the work.'”

“Ever bigger” has its practical limits though. Extremely large pieces often require considerably more time and expense to prepare for transport. You reach a point of diminishing returns. In jobs where Jueneman foresees lots of equipment movement, he prefers to bid only up to a D7H or D8H. “They’re about as big as you’d want to have” when your shifting them from site to site. Still, compared with smaller D6Hs, they do the work in two-thirds the time. “Time. That’s the big factor,” he points out. “You can do more work with a big machine. The equipment costs a little more. But you have to bid it that way.”

Many of Jueneman’s jobs combine several elements, such as trenching and pond cleaning. For these, he says, “Of course you want to buy a machine that will do both.” For his needs, a 20-ton excavator with interchangeable bucket sizes and a large trenching arm has proven adequate. These two dimensions are critical profit factors. “It’s much faster and more cost-efficient than using the (12-ton) trackhoe,” which is what he used to do. “It’s sort of like using a bucket compared to a teaspoon,” he describes. “At least twice as fast.”

The urge for bigness is ever persistent. Jueneman now is looking to upgrade his 20-ton trackhoe to a 30-ton for the gain in speed. His firm also tears up old bridges and then regrades the banks for the replacements. Hydraulic hammer attachments break the concrete. Forget about using compact equipment here too: Once again, bigger is better for the pounding leverage, at least in midsize equipment compared to small.

Jueneman sums it up: “Any way you can find to decrease the time and increase the efficiency will make you more money.” And his buying tip: “If you upgrade to a machine with comparable or greater horsepower – but don’t get equal or greater weight – it’ll just sit there and spin. You’ve got to have the weight there to compensate for the power.”

Watch the Wear and Tear

Compact-equipment makers reportedly are aiming to lure more and more buyers away from heavier pieces. They’re beefing up the hydraulic horsepower, enlarging bucket sizes, and packing more punch into small packages or, as Kobelco’s Norwood puts it, “squeezing every little bit of residual capacity out of a machine to make it as economic as possible to own.” Operators, too, want small machines to do ever-bigger jobs – and, not infrequently, push machines beyond their specified limits. Norwood believes that operators often have the practice of digging light topsoil using the largest bucket available on a compact, then keeping the same bucket for digging rock or heavy clay – material of twice the density. “Oversized buckets aren’t always bad if you know what you’re doing. You should refer to manufacturers’ charts to tell you what bucket to use for the application,” he advises. Failing to follow these guidelines, though – “don’t expect the machine to perform as well or last as long,” he cautions.

Herein lies another drawback: Small machines, even if solidly built, “have a considerably shorter life span than larger machines,” points out Sprouls. Durability becomes even more critical in the purchase decision if you anticipate high utilization, perhaps with multiple hydraulic tools. According to one industry observer, “A skid-steer loader with 10,000 hours on it is pretty well shot, while a D6R dozer with 10,000 hours is only nearing engine replacement.”

Virtually all commentators agree that the current rage for compact equipment doesn’t really mean “competition” on the basis of size; rather, compacts offer more choices to use the right machine for the need, citing an oft-repeated theme. As Takeuchi’s Rafferty observes, “If you’re going to drive finishing nails, you don’t bring a 5-pound sledge hammer.” In other words, using a 13,000-lb. machine, for example, you can indeed clear a modest tract of 10,000 ft.2 cost-effectively, but by the same token, for cutting out a hillside for a strip mall, or for road building, or for most other industrial and commercial work, you need the heavy stuff. Once the new building is going up, or the curbs are in, “Nothing else but a compact will fit,” notes Fitzgerald. So the byword is to strike a balance, he adds, “which is why big contractors love using compact equipment to finish the job.”