• 12/5/2022
  • By Doosan Infracore North America LLC

The A. Johnson Company in Bristol, Vermont, has been in business for more than 100 years. During that time, the lumber company has mostly purchased machines. Today, the sawmill owners prefer heavy equipment leasing.

Loran McNally, fleet maintenance manager for the company, says it’s a practice the company has adopted in recent years. The 20-year employee at the sawmill says the idea is to make sure the machine is protected under warranty and the company knows the monthly fixed costs.

The A. Johnson Company worked for decades to purchase its heavy equipment from a variety of dealerships. Recently, the sawmill forged a new relationship and business strategy. The company partnered with G. Stone Commercial, the local Doosan dealer.

The sawmill’s first experience with the dealership was the purchase of a Doosan DX42-5K mini excavator. That got the partnership off to a good start.

Shortly after purchasing the mini excavator, the company added a Doosan DL350-5 wheel loader through a heavy equipment lease.

“When the lease became due on the DL350, it was a no-brainer for us to go right back to see Jamie McCray and start talking about a replacement machine,” Loran says. “I had no interest in going anywhere else.”

Loran and the team at The A. Johnson Company replaced their DL350-5 with a new lease on a DL320-7 wheel loader. The wheel loader is paired with a log grapple to lift and carry timber to the sawmill for processing.

“The new model, a DL320, has taken the place of the DL350 very well,” Loran says. “It was just like getting out of one machine and right into another one. It was seamless.”

A Doosan mini excavator operator uses a grapple to lift railroad ties at A. Johnson Company.

 

The Benefits of Leasing Heavy Equipment

Profit margins in the lumber industry are tight at times as business ebbs and flows. Recently, inflation and high fuel costs have hit businesses like The A. Johnson Company hard. Knowing fixed costs each month can be helpful, which is why the firm is leasing heavy equipment.

“The advantage is that we know what our expenses will be, and that’s a real plus,” says Kenneth Johnson, owner and fourth-generation family member at the Vermont sawmill.

According to Kenneth, the company had an old Caterpillar wheel loader that they replaced because they were having a lot of breakdowns. He says the company was spending more on that machine annually in repairs than they did on a new heavy equipment lease.

“Knowing the machine is new and is going to run is very important,” Kenneth says.

“To have the uptime and the availability and not worry that we’re going to have a major breakdown is pretty nice. Our expenses are going to be consistent and predictable.”

A Doosan DL320-7 wheel loader operator uses a log grapple to carry timber to the sawmill for processing.

 

Leasing vs. Buying Heavy Equipment

Leasing heavy equipment can be an attractive way to purchase machines without financing them. You can keep your cash, agree to a fixed monthly lease rate and get the latest equipment.

When you lease heavy equipment, you know your fixed monthly costs. The machine is under warranty and supported by your dealer’s service department. And you can purchase the machine at the end of the lease if you still want or need it.

Interest rates have crept up in recent months, so you may want to keep your cash in the bank instead of using it for a machine down payment. Visit with your accountant or talk to your local dealer about the advantages of leasing heavy equipment.

You can learn more about this topic in our “Rent-to-Own Equipment: Lease or Buy?” blog.

Knowing the machine is new and is going to run is very important."
Kenneth Johnson, Owner, A. Johnson Company