It's hard for any contractor to avoid the current economic realities. Yet, there are a few emerging markets that are being driven by a trend toward recycling and the infusion of funds from the American Recovery and Reinvestment Act (ARRA).

"Of the $787 billion ARRA, there was only $26.6 billion appropriated to highways," says John Irvine, vice president of sales and marketing, Roadtec Inc. "In 120 days [by June], the states were supposed to appropriate $9.3 billion. They were well on their way to doing that. They were at 59%, or $5.5 billion, by April 7."

This speed favors mill and fill work, which can be designed quickly. "We are seeing some impact," says Irvine. "The question is whether it is a temporary blip or whether it is sustainable."

Terry Sharp, worldwide marketing manager of global paving, Caterpillar Inc., also expects the ARRA to mainly impact mill and fill applications. "Mill and fill work is hot right now. If the contractor has the equipment and the experience, he can jump on it right away," he states. "The key is good equipment and support to get jobs done quickly and with quality results. It has always been a specialized business."

Big mills are in demand
Some contractors who previously subbed out milling work are now doing it themselves. "While it is specialized, the paving contractor who has experience subbing this work out understands the business and can make money in this area. Trucking is important and margins are down to the penny," Sharp explains. The learning curve would be rather steep for a general contractor. "Only the paving contractor has a chance to enter this marketplace."

The nature of ARRA projects favors the use of half-lane mills for working on state and federal highways. "It's not about horsepower alone," says Sharp. "It's about matching horsepower to productivity and quality end product."

"The trends that we are seeing are more toward the big equipment. The size of the projects being let are very big, so people are trying to figure out how to get a lot of work done quickly," notes Irvine. "We have had a good run on RX900s with 12-ft. 6-in. drums [for] full-lane milling. The half- and full-lane, 900-hp-type machines are definitely in demand."

Jim Holland, Terex Roadbuilding, acknowledges, "There seems to be an increase going toward the full-lane mill. It will never overtake the half-lane, mid-range by any means." However, the full-lane mills can be used at night, an overlay can be applied and the road can be opened up to traffic the next day.

The ARRA is only one driver in the popularity of large milling machines. Another is the desire for states to stretch their budgets. "They are doing this through fractionating RAP and increasing recycle percentages," says Irvine. For instance, North Carolina is experimenting at 40% RAP; South Carolina varies from 30% to 50%; Wisconsin is increasing to 25%; Florida is going to 45%; and Kansas is going to 30% to 40%. "These were typically 10% to 15% RAP states."

According to Irvine, at 10% to 15% RAP, you typically have one large RAP pile. When you load a bucket out of this pile, you really don't know what you might get. It could be just a bucket of fines; fines contain only 7% to 9% asphalt.

To increase the percentage of RAP used and keep the asphalt in the mix within tolerance, you really need to screen it into different sizes, like you would with virgin aggregate. "You know the asphalt content and you know what aggregate sizing you are going to have at any given time," Irvine explains. You can then increase RAP content while maintaining mix quality. "If you do increase the RAP, the costs go down."

This makes control of the RAP more critical. "Some asphalt contractors are saying, 'Maybe we ought to buy a mill so we can control ownership of this RAP'," Irvine notes. "Then you can control the scheduling - you can use your milling machine to supplement schedules for peak capacity."