Eliminating Front Loader Costs

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How Front Loaders Keep Operational Costs High and How Automated Storage Can Address the Issue

Front-end loaders, front loaders, bucket loaders—whatever you choose to call them, they’re a common sight in industrial operations with bulk feed processes. Understandably, so many operations purchase these machines: for decades, they provided an economical solution for managing bulk materials, and compared to automation, they can cost less upfront.

But the economics of running these machines in 2020 doesn’t add up. Oftentimes, though, operations personnel either underestimate the cost of owning and operating front-end loaders or write off the expenses as a necessary evil. Better options have been developed, however. Automated storage and reclaim make better economic sense in 21st-century conditions and, beyond economics, provide better day-to-day performance.

Expenses

Before delving into alternatives to front loaders, we should understand the true cost of operating these vehicles. If a front loader costs say, $400,000 USD and depreciates over 10 years to a 10 percent residual value of $40,000, the annual depreciation expense is $36,000 per year ($360,000/10 years). This makes the total annual cost to own and operate a frontend loader at about $76,000 ($400,000 purchase price/10 years + $36,000 yearly depreciation).

The second cost we should consider is fuel. Say you run the front-end loader 9 hours a day, 206 days per year. If it costs $20 per hour for fuel, the annual operating fuel cost is $37,080. Of course, when the operator is attending to load out, the front loader typically sits idling, and some operations run 24 hours a day and on weekends. Actual fuel usage may be much higher.

Other costs include 1) Maintenance, 2) Repairing damage done to the building and equipment done by the operator, 3) training all employees on-site for all shifts on the proper operation of the front-end loader, and 4) insurance to cover accidents and property damage the loader causes. For this, we’ll estimate a conservative $100,000.00.

The total cost of this hypothetical end loader thus comes to $213,080. This number may be lower than many operations face, especially if they run 24 hours per day, and it doesn’t include the costs associated with paying the operator.

Another major cost associated with every loader operation is the damage done by the loader to everything it interacts with. This includes floors, buildings, bins, conveyors, structures, etc. With those factors priced in, the true cost will likely be closer to the cost a particleboard customer of ours concluded they spend per year per end loader after conducting an internal study: $400,000 per year.

Solution

While front loaders will always make sense for some applications, there are many for which storage with automated reclaim is a better choice. Instead of storing material in piles on the ground, you can store material in a horizontal silo like our SMART Container—a converted intermodal shipping container with push-full wedge floors—or a bunker equipped with SMART Floors (push-pull wedge floors). Using one of these systems, operations must only turn on the reclaim system in the container to feed their process rather than operating an end loader. Metering is typically unnecessary with these systems because SMART Containers meter the flow well because it sheers material off the pile rather than moving the entire pile toward discharge like other moving-floor systems.

These horizontal silos eliminate the requirement for a front loader and the associated labor.

Other Benefits

Besides eliminating front loader costs, there are other benefits to storing material in SMART Containers or on SMART Floors:

  • Perhaps the most obvious benefit to automating infeed and storage is that it reduces the mess associated with loaders as they pick up, transport, and feed material. This mess takes time to manage, increases fire risk, and wastes material.
  • FSMA compliance. Storing feed in bins will provide “production lot identification” as required by the Food Safety Modernization Act (FSMA). FSMA, like OSHA, ADA, and the EPA, is here to stay. Sooner or later, FSMA inspectors will visit your site, and you will have to address FSMA rules. Of concern to these inspectors will be how and how well storage buildings and silos are cleaned. Another concern they have is the production of food-related materials (e.g. DDGS and wet cake in the ethanol industry): How they are stored and identified, what constitutes a “lot,” how each lot is traced, to whom the lot went, and when it shipped. Containerized storage will help accomplish these goals.
  • Increase storage capacity. The floor area needed for storage is reduced by 50-60 percent with bins as compared to piling on the ground. Ground piling also requires space for the front loader to move around, which isn’t needed with SMART Containers.
  • Fewer risks. Front-loaders get buried from time to time as they reclaim material from piles. As the loaders remove material from the pile, the pile can collapse because the sheer face loaders create is greater than the material’s natural angle of repose. Burying a frontend loader can make the loader permanently inoperable, and a replacement loader must then be found and delivered within hours to keep the plant in operation. Putting material in bins eliminates this possibility.
  • Reduce insurance. Under the right circumstances, storage buildings can become a dust explosion hazard. Storing material in bins should eliminate this hazard because 1) there’s little dust: material slides down itself as the bins fill (except when first filling an empty bin), and 2) if the storage building and associated explosion hazard don’t exist, there is no need for insurance covering the building, equipment in the building, and employees working in the building.
  • No pit maintenance. Operations that push or scoop materials into a pit commonly find it difficult to maintain equipment in pits. Pits are also difficult to clean and, depending on the material, can attract rodents.
  • Having multiple stacked bins or bunkers allows the perfect blending of materials. They’re much more reliable than telling the loader operator, “one scoop of this and three scoops of that.”
  • Better depreciation. Accountants can treat our bins as equipment or machinery and put them in a seven-year account. The annual depreciation expense, which goes right to the profit line, is greater than with front-end loaders: seven years versus ten.

The 21st century has afforded us many advancements in automation and material handling. At the same time, ever-increasing labor costs, insurance rates, maintenance costs, and labor shortages make it difficult to justify labor-intensive and capital-hungry processes. Front-loaders burden you with ongoing costs that reduce their value. In today’s economy, it makes sense to invest in a SMART Container or bunker with SMART Floors to automate your infeed process and eliminate the expense and hazard of a front-end loader.

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