ACT's annual auction check-in
By Hannah Sundermeyer10 January 2019
These days you can order just about anything on your phone and have it delivered to your front door. So why can’t it be that easy for cranes and other equipment? It almost is. The world of equipment auctions is steadily improving alongside technological advances, even though many people still prefer to attend auctions in person. Whether it’s tuning into a live auction on an app or keeping it old school by bidding on site, auction environments are a proven way to acquire well priced and high quality machines.
ACT convened a panel of three industry experts to get their take on equipment pricing, online versus in-person bidding and equipment in most demand. Participants in our forum include Gina Kaktis, marketing director, Imperial Crane; Doug Olive, senior vice president pricing & valuations, Ritchie Bros.; and Luke Lonergan, vice president/CEO, Empire Crane.
How do you characterize the auction business for cranes and specialized transport trailers and trucks?
Kaktis: The auction business for cranes, trucks and trailers is an important component of our overall sales and marketing strategy. Auction companies like Ritchie Bros., with their acquisition of IronPlanet’s technology, focus and ability to thoroughly inspect equipment, compliments Imperial’s technology and internet focus approach to selling cranes. By advertising online with Crane Network, we can manage our sales pricing and reach a global audience. This allows us to get a pulse on the equipment demand and pricing. Throughout the marketing process we can then continue to reduce the pricing until we get to the OLV (Orderly Liquidation Value).
Olive: So far in 2018 (January-November) we have sold more than 1,100 cranes through our live onsite auctions alone, which is down slightly from the same time period in 2017, but prices have held steady year over year. Late-model, low-hour cranes continue to be the strongest sellers. In particular, we have seen strong prices for crawler cranes in 2018. Pricing for transport trucks has been strong in 2018, especially since supply has been hard to find. As expected, pricing is particularly strong for late-model, low-mileage units – they are hard to get due to manufacturer backlogs and high demand in the market, and as a result are bringing a premium in the marketplace. We’ve also seen solid pricing for specialty lowboy trailers this year.
Lonergan: Auctions are a great option for those hard-to-sell cranes, or if you have to liquidate your fleet. On the flip-side they’re also great for buyers because the prices are at their lowest and you can get a really good deal if you’ve done your research beforehand. Plus, it’s a different environment than traditional purchasing at the dealership; it’s much more fast paced and fun.
What are the challenges in buying and selling cranes/equipment at auction?
Kaktis: The number one challenge of buying cranes/equipment at an auction lately has been the growing demand for used cranes, driving up the prices and limiting our ability to find what we consider great deals.
Olive: Because of the high-dollar value of cranes, as well as safety and certification issues, crane buyers want to know as much as possible about an item before purchasing – most buyers want to do a full inspection of a crane before they place a bid. Our job is to make sure customers have all the information they need to make confident bidding decisions. The more confident they are in the quality of the item, the higher they will bid on auction day. With our live onsite auctions, we offer high-res photos and detailed information through our website and then buyers can inspect and compare cranes in person at the auction site.
Lonergan: For us, auctions are a last resort and are for the cranes that are just harder to get rid of. The prices are not as high as you can get selling them retail or directly through our salesmen. Great prices for buying! As a buyer though, you never really know what you could be getting into with an auction item, so you are taking a risk.
How does the online market compare to the “kick the tires” buyer who shows up at the actual auction?
Kaktis: The online market has been around now for over 20 years, and is the commonly accepted method for Imperial Crane and other companies to buy and sell equipment. The “kick the tires” buyer is most likely at the auction to network and socialize with his or her peers.
Olive: Online sales are a huge part of our business today. In fact, online buyers make up more than half of the total buyers in our onsite auctions on average, and sometimes that number can reach 60 or 70 percent. We are also seeing increasing number of bids and purchases through our mobile app – so far in 2018 we have sold more than $2 million worth of cranes through the app. No matter how people are buying assets – onsite or online, they all have the same need for information on the assets they are bidding on. The more info they have, the more confident they will be when bidding. For our onsite auctions, bidders can view detailed information and high-res photos online and then inspect and compare the assets in person. It’s important to understand that, even with the growth of online buying, most online customers still love to inspect items in person before they bid, especially crane buyers because their equipment purchases can be quite expensive.
Lonergan: For customers, it’s very easy to sit on your computer and talk to the seller via e-mail. You have a world of answers and a world of cranes at your fingertips. You have as much time as you need to shop around and make a decision without pressure. It’s a very different pace at the auction. You have to know your max price and exactly what you’re looking at. You are there in person; either you buy it, or you don’t. You aren’t there to kick the tires.
What are the most sought-after cranes? Trailers?
Kaktis: As a successful crane rental company it’s important to have a full complement of crane models across the board. That having been said, I don’t think there is any question: mobile cranes, both truck and all-terrain continue to be sought after because of their versatility.
Olive: The most sought-after cranes and trailers at our auctions are almost always late-model, well-maintained, highly-spec’d units. Crawler cranes have been achieving strong market prices – we’ve sold just 100 crawler cranes through our onsite auctions so far in 2018, down slightly from the same time period in 2017.
Lonergan: Right now, all-terrain cranes are the most sought-after cranes. We are quoting used all-terrain cranes all over the world every day and have sold many new Demag’s in our territory. To meet this need, Empire Crane purchased 15 new Demag ATs including seven Demag AC 45 City cranes, along with the 15 used ATs that we currently have in stock.