Boom truck market sets stage for recovery

Three hurdles are in the way of a boom truck market recovery: the presidential election, the Covid-19 pandemic and low prices and demand for oil and gas. While boom trucks are busy performing jobs in a range of sectors, their owners have delayed refreshing their fleets due to these looming uncertainties.

“First we have to get past the election,” said John Lukow, vice president, Load King, a division of Custom Truck One Source. “And then there’s the obsession with the Covid pandemic.”

While the boom truck market has not experienced a market this low in 20 years, Lukow said there are some positive signs.

“Market share reports show that new orders are substantially off,” he said. “But the difference in this downturn is that the part of the market that has remained is the larger tonnage machines, 40 tons or more.”

Typically, boom trucks have been mainstays in the oil patch and the power line market. Activity is down in both these sectors. Applications that are “taking up the slack” are HVAC replacement, steel erection and crane services.

“But we have had indications that the utility and power line transmission work is picking up,” Lukow said.

Lukow is a boom truck market expert. He ran National Crane for several years and is now helping Load King establish its boom truck product line.

“We are in a unique situation because we are manufacturers and distributors,” he said. “We don’t have the same dynamic as other OEMs.”

Boom truck vs. truck crane

Custom Truck One Source has one of the largest boom truck fleets in the country with more than 200 units.

“We have a long history in the boom truck business, back to 1992,” said Lukow. “I guess you could say it’s in our DNA. We mounted the first RO boom trucks in 1992. Our CEO Fred Ross is passionate about boom trucks. We knew we wanted to do more in the boom truck market before buying the Terex line.”

Lukow said when the Terex boom truck line became available it was fortuitous, but it was the right fit.

“Instead of starting from scratch we had a base that we were familiar with,” he said.

Higher capacity boom trucks have encroached on the truck crane market.

“The lines are blurred,” Lukow said. “The heritage of the boom truck was that they were small, cost-effective cranes that could move rapidly down the road. But the 50 tons capacity and up is a different kind of class of cranes with different controls.”

Larger capacity boom trucks need electric over hydraulics, load ratings at 10 feet, formed booms, longer booms, remote operation, operating cabs and bigger features that you get from bigger cranes, he said.

For the market to rebound, boom truck experts point to 2021 after the election, when a Covid-19 vaccine is available and oil and gas demand returns. When consumers get back on the road and traveling, that will be an instant shot in the arm for the market, Lukow said.

But the bottom line is that owners need to start refreshing their fleets.

“When I talk to crane customers, they are actually busy,” he said. “They are just in a wait-and-see mode as far as buying new boom trucks.”

Custom Truck One Source has been able to avoid substantial workforce reductions by moving personnel around and changing strategies.

“The same person building a Load King boom truck in March we’ve shifted to refurbishing some of our rental fleet assets,” said Lukow.

As well, Lukow said it is a good time to work on product development.

“The package we bought from Terex has a proud heritage, but it went a long time without enough investment,” Lukow said.

Most boom truck companies are working on product development so they can offer a fresh product lineup when the market recovers.

Evolving and improving

Boom trucks are constantly evolving and improving, according to Mike Knott, vice president of operations for Phoenix Crane Rental, located in Atlanta, GA.

“Stronger charts and longer boom lengths are removing the need for smaller truck cranes,” he said. “Boom trucks typically drive down the road better over cranes, so that is another advantage.”

His company’s market is fairly strong.

“We are constantly investigating new configurations to give ourselves the upper hand with unique industry driven needs,” he said. “I can only speak to what the demand is within my fleet. The largest boom truck we currently have is a 45-tonner. Nearly every boom truck in my fleet, from 15 to 45 tons, performs work every day.”

Boom trucks are roadable, reliable and offer quick set-up and easy-to-learn operating systems, Knott said. He said the only negative is they can be top heavy and axle configurations can be an issue if not planned properly. Phoenix will most likely start purchasing new models soon.

“When Covid first hit, we saw boom trucks and smaller crane work slow down because I think that many companies in that market were not equipped to quickly adjust to the new restrictions,” he said. “Georgia has been very aggressive with keeping the economy going and I would say we are at 90 percent of our normal small crane/boom truck workload. We are looking to purchase new equipment to improve our offerings to our customers, and recovery is well under way.”

Michael Heinrich, vice president of National Crane, agreed that economic and political uncertainty has meant less fleet replacement.

“When you look at the market, what we’ve seen across the board is a significant decrease year over year,” Heinrich said. “There has also been a change in buying patterns due to this uncertainty.”

In the past, a boom truck fleet owner will utilize X number of units for X number of months and forecast capital expenditures to replace those units every year or so, Heinrich explained.

“If you replace 50 percent of your fleet every year, you create a good rotation of fleet to keep it fresh and lower the cost of ownership,” Heinrich said. “But today people are bypassing the systematic replacement.”

Heinrich views 8 to 30-ton boom trucks as a fixture in the market, as the stalwarts.

“The stand-up market is pretty mature,” he said. “I think the larger swing cab units, the higher capacities, that’s really the emerging and growing market.”

Innovation and technological advances in higher classes have led to higher prices.

“Units that used to be $400,000 are now $800,000,” he said. “There is a lot of penetration into the traditional truck crane market.”

For the market to recover the buyer needs to have more confidence.

“At the start of the Covid-19 crisis, most companies stayed busy,” Heinrich said. “Utilization numbers were strong and high in the 70 percent range. But later in the summer, a lot of rental fleets took a pretty big hit. Utilization may have gone down to 50 or 60 percent but we are hearing that utilization is creeping back up. There was a lot of doom and gloom when oil prices went to negative numbers, but thus far, boom trucks that were supporting the oil fields have not flooded the market.

“We haven’t seen a rush of used equipment flowing out of this market,” he said. “In 2008 when we saw the oil downturn, we saw multiple units hit the market and proliferate. We have seen some isolated cases, but it is not widespread.”