Cranes and heavy transportation equipment are as sought-after this year as they were last and according to some of the nation's biggest auctioneers, sales could even outpace 2011, reports Lindsey Anderson.
"The market we're seeing right now is actually not unlike it was at the beginning of last year," says Steve Simpson, chief sales officer of Ritchie Bros. Auctioneers.
"We came out of the gate of 2011 very strong and results we're seeing this year in 2012 are very similar, if not a little bit better."
In 2011, auctioneer Ritchie Bros. sold more than 1,000 used cranes in the U.S. market, the company says, and for 2012, they started out with 70 cranes for sale at its March and April auctions.
"So far this year we've sold over 135 cranes," Simpson says. "We're only in mid-March, so we have a long way to go."
Myron Bowling Auctioneers, Inc. is also on track. "General construction equipment demand is higher in the first part of 2012 than it has been in the past few years," says Greg Hengehold, managing partner of Myron Bowling.
"Attendance at the auctions is higher and selling prices are stronger than a year ago. As usual, late-model, quality equipment brings most at auctions."
Myron says most of its crane and heavy transport equipment is being sold directly to end-users and contractors. "We recently sold Grove, Galion/Dresser and Broderson 15- to 20-ton capacity rough terrain cranes in Texas," Hengehold says.
"The cranes brought well in excess of the anticipated value, mainly because of the geographic location near energy facilities that require these types of cranes. Hydraulic truck cranes are also in high demand [though, and] high capacity cranes are the most desirable."
With sales strong and momentum moving forward, Simpson says there's been a clear change in the economic climate across the U.S.
"What's noticeably different is the confidence by the masses of people that we deal with in the United States - it's significantly better," he says.
"I travel a lot and the optimism out there about the future, work picking up and more going on, in general it feels a lot better than it did 12 months ago."
This increased confidence Ritchie is experiencing has provided the company "great results," as it has Myron Bowling.
Specialized and heavy transport
"Demand is very strong for used specialized transport equipment," Hengehold says. "Though it was strong in 2011, demand continues to increase in 2012."
Myron Bowling has seen prices for this type of equipment grow 10 percent in 2012, with pre-emissions, heavy-haul tractors (such as four-axle, high horse power, heavy axles) in "especially high demand."
"At an auction in late November 2011, we sold pre-emissions 2008 Peterbilt 389 tractors for nearly 80 percent of their new price," Hengehold says.
"All trailers are bringing more at auction this year, even light trailers such as tandem axle flatbed trailers from the '80s that would have been scrapped in late 2010 or early 2011, they're now bringing in $4,000 to $6,000 at auction."
Hengehold says Myron Bowling is also seeing heavy haul trailers (50-tons or more), which are in short supply, bringing in 70 to 80 percent of their original selling price.
"Customers tell us that wait times for new trailers can be as long as three to nine months, which obviously spurs demand for used trailers when customers have jobs that need to be completed immediately."
Myron Bowling has an upcoming auction that's focusing on trailers used for hauling wind energy components. These wind energy transportation pieces are surplus to Badger Transport in Milwaukee.
Myron plans to sell 80-ton double schnabel trailers, 80-ton modular heavy-haul trailers, 80-ton perimeter trailers, windmill blade trailers and heavy haul tractors. "We expect demand to be high for this equipment," Hengehold says.
The same can be said for Ritchie, who is witnessing heavy haul trucks and trailers "bringing in great money."
Simpson attributes this increase in demand from positive economic signs and work picking up across some areas.
"A lot of the brand new stuff is quite spendy, especially with new technology, so I think people are looking for things that are a few years old; stuff that doesn't have a lot of miles or hours on it," he says.
"They think that might be a better avenue for them rather than stepping up and buying new."
According to Simpson, the strong demand for quality, later-model, nicely houred, well-speced equipment spurs from the downturn.
"A lot of manufacturers pulled back on building new stuff, so therefore a lot of brand new equipment wasn't made or sold," he says.
"The quantities of those years are not in abundance and therefore that's what's driving the later model (2005, 2006, 2007) equipment in the marketplace."
There are also owners who might have surplus assets they're looking to sell. "As they continue to see positive prices in the marketplace going up, that will either drive guys who want to get up and retire or downsize, and that will push them to think about selling," Simpson says.
Overall, the auction market is as hot as ever. With demand high, attendance up and prices strong, quality equipment isn't likely to last.