A used crane can be a great investment. The savings on a single used crane can easily amount to hundreds of thousands of dollars, compared to a new equipment purchase.
One way to ensure the best possible experience when purchasing a used crane is to work with authorized dealers of top manufacturers that have been in business a long time, pride themselves on quality parts and service, and offer a wide inventory.
This month, American Cranes & Transport set up a roundtable of executives from three companies that meet those criteria. Our panel includes Paul Autry, regional sales and marketing manager for Mardian Equipment Co. based in Phoenix, AZ; Andrew Forepaugh, vice president of sales, Cleveland Crane & Shovel Sales, Inc. based in Cleveland, OH; and Paul Lonergan, president of Empire Crane Company based in Syracuse, NY.
How do you characterize the used crane market?
Autry: The market for used cranes is gaining momentum this year. With the economy and construction industry still in the early stages of recovery, construction companies are weighing their options when purchasing additional equipment. New cranes are typically higher priced than used cranes, leading some companies to look for available used cranes to fit their needs.
Lead time of crane availability is sometimes a deciding factor. New cranes can take several months, if not longer, to build to desired specifications, whereas used cranes are already in stock and usually can be delivered immediately. This is a great advantage for clients who require a fast solution to their lifting jobs.
Forepaugh: Through the first three quarters of this year, demand for used cranes had been steadily climbing. That intensifying demand is driving up the prices on the inventory of available equipment. As far as financing goes, we feel the numbers are pretty much in line with what we saw going into the fourth quarter last year.
Lonergan: The market has been pretty soft, but it seems to be getting a little bit better lately.
What types of used cranes have been most in demand?
Autry: We've seen a wide range of used cranes purchased this year. With our diverse inventory and availability of used cranes, Mardian Equipment has sold everything from 9-ton carry deck cranes and forklifts to 300-ton crawler cranes. The 30- to 40-ton capacity cranes are probably the most commonly asked for, new and used.
Forepaugh: We've seen the most demand at Cleveland Crane & Shovel for rough terrain cranes and GMK all-terrain cranes. Grove's best seller has been the TMS9000E - 110-ton capacity. Here in Ohio, there has been an uptick in business due to the natural gas and oil work from the Marcellus Shale Formation that has been under way throughout the Allegheny Plateau region.
Lonergan: At Empire Crane, we're seeing the most demand for five-axle all-terrain cranes - from 150- to 240-ton capacity.
How is the demand for used cranes compared to the new cranes you offer?
Autry: It depends on the client's budget and need for the crane as the company looks toward the future. If the company anticipates growth and has high revenue projects in the pipeline, an investment in a new crane often makes sense. Other companies are looking to replace older cranes that have exhausted performance ability with a new crane - usually with updated, improved options as well as increased lifting capacity - is typically what they are looking for. More often than not, a client who initially shops for a used crane will decide a new crane is a better fit after comparing the advantages between the two.
Forepaugh: Prices have always been a determining factor, and in today's economy that's been especially true. A lot of companies need the cranes to do the work, but they're just not confident enough that there will be enough of the work to justify the investment in new equipment.
Lonergan: For every new crane were selling, it seems like there are one or two used cranes that are part of the deal as customers look to upgrade their equipment while keeping the size of their fleet from expanding. We're constantly pursuing domestic and international business on used, as well as new equipment. Rather than buy new cranes, some customers are looking for newer used cranes.
The expectations for the quality and performance of used cranes is getting higher year by year in the international market. The safety requirements are becoming greater in the developing world. We order the necessary engines to meet those requirements. Latin America is not just taking all of the old relics.
Where are your used cranes coming from?
Autry: Trade-ins and cranes that were previously rental cranes are the majority of Mardian Equipment's used crane inventory. When a client is looking into a crane purchase, there is an advantage for them to rent a crane they have interest in before making a buying decision. This allows their operators to experience the crane firsthand in the field and helps them decide on the best purchase in regards to size, options needed, type and even used vs. new.
Forepaugh: Trade-ins are always a big factor at Cleveland Crane & Shovel. We're hearing from customers who bought cranes from us and put them into service several years ago, and are thinking about updating their fleet with newer equipment. We know there are plenty of customers who are going to want to take advantage of the 50 percent bonus depreciation rules that have been extended for qualified property placed in service through December 31, 2013.
As a Manitowoc dealer for 40 years and a Grove dealer for five years, we can offer customers the opportunity to sell their older equipment that they have rented down through time and replace it with new equipment. On the other end, the used-crane customer can rest assured the machine has been properly maintained by a Manitowoc/Grove distributor and overhauled to peak functionality.
Lonergan: The biggest thing is trade-ins. We're not going out and looking for surplus machines. In the past, when the demand for used machines was higher, we went out and actively pursued good late model cranes from fleet owners.
Are you seeing any encouraging trends for used cranes?
Autry: The used crane market seems to be headed in a positive direction. After 2007, many high quality, newer used cranes at terrific prices hit the market due to the recession. That used inventory has been shrinking as the economy gets stronger, so new crane purchases may be the trend in the next couple of years.
Forepaugh: The demand continues to grow for used cranes as new prices climb. Cleveland Crane & Shovel customers can generally get the same rental rate out of a used crane purchased for $600,000 as for one that costs upwards of $1 million.
Lonergan: I have a lot of friends with all-time highs for used inventory. That's not an ideal situation for them, but it does give someone looking for a used crane more choices.
What does your company do that sets it apart from competitors that sell used cranes?
Autry: As a factory authorized dealer for the leading crane and equipment manufacturers in the industry, we proudly offer the client all of their crane purchase options under one roof. We offer complete service and maintenance programs and factory direct parts for all of our used and new cranes. We put our used cranes through certified inspection and testing to ensure they will perform at their optimum levels. We can do in-house upgrades or accessory modifications to equipment per clients' requests. Our factory trained and certified maintenance technicians make up one of the most experienced crane service teams in the industry.
Forepaugh: Cleveland Crane & Shovel is one of the oldest original Manitowoc dealers in the United States, and we've always maintained our Elite Dealer status. Being awarded the Grove dealership in 2008 expanded our ability to offer our customers the most innovative and advanced lifting equipment available.
What really sets us apart is our employees. They provide the same high-quality service to every customer 24 hours a day, 365 days a year. To give you an indication of the quality of our staff, we have a Grove 8.1 Certified Technician for GMK cranes that scored a 99 on the written test taken at Grove's plant in Shady, Grove, PA. That's the highest score on that test so far.
Lonergan: Empire Cranes represents many well-known lines, and we are the authorized distributors for the complete line of Terex Cranes, Tadano-Mantis Cranes, Grove Industrial Cranes and Manitex Boom Trucks. That lets us buy OEM parts at the best possible prices and pass along savings to the customer. We have certified third-party crane inspectors on staff. Empire Crane has a full sales, parts and service facility located in Central New York, with branches in Boston, Massachusetts and Metropolitan New York/New Jersey and offers over-the-road service to all locations. We also continue to serve all corners of the world for crane sales and parts and service support. If you buy a used crane from us, it will be in top-notch condition, and we'll work with you to keep it that way.
Source: ACT Magazine, October 2013 Issue