Glossary Terms

Economic Life Hours reflect the average economically productive life of a machine used under average conditions with normal repairs and maintenance.

F.O.B. (Free on Board) refers to the practice by which the supplier pays shipping costs from the place of manufacture to a specified destination where the legal title then transfers to the purchaser.

It is the general practice in the industry to base rates upon one shift of 8 hours per day, 40 hours per week, or 176 hours per month of a 30-day consecutive period.

The freight rates in the schedule are typically Free on Board from the lessor’s warehouse or shipping point.

On local rentals the equipment rental period most often starts when equipment leaves the lessor’s warehouse and stops when it is returned to the warehouse.

Standby refers to the situation where equipment is on the job and available for work, but is not put into operation until needed.

No industry standard exists regarding the handling of fixed Ownership costs in computation of overtime rates.

Hourly Estimated Cost include the cost of labor and parts needed for routine, daily servicing of the equipment.

Indirect equipment costs consist mostly of overhead costs such as normal risk insurance and property taxes along with storage, security, mechanics supervision, inspection, licenses, and record keeping.

Standy refers to the period during which equipment is assigned to a job and available for work, but is not put into operation until needed.