Reporting on the crane industry is a constant and evolving learning process. So when Ritchie Bros. invited American Cranes & Transport to its big equipment auction in Orlando in February, I jumped at the opportunity. I had never been to a crane auction, or any type of equipment auction for that matter. This particular Ritchie Bros. auction is among the largest of the year and spans five days. The crane portion of the auction was held on Day Three, February 22.
Even though rain steadily beat down on the 100-plus cranes neatly lined up at the huge auction site, spirits weren’t dampened. Several trade press reporters were invited to the event, and we piled onto a big bus that took us to see the cranes and perform the proverbial “tire kick.” Despite the rain the cranes were in great shape, clean and some even repainted. Most crane classes were represented, from boom trucks to crawlers. There were more rough terrain cranes than any other crane class, and cranes from all over the U.S. were for sale, although most of them were being sold by companies located in the southeastern United States.
Due to the weather, the crane auction was held in an arena-like room that was jammed packed. The room seats 720, 300 in the bleacher-like stands and 200 chairs on the floor. Every seat was taken and lots of people stood in the wings. The crane auction lasted about an hour and a half. Generally they sell 100 lots an hour, according to Ritchie’s Ian Malinski, corporate communications lead.
Photos and information about each crane were projected onto a huge center-stage screen while the auctioneer chanted the prices and two “bid catchers” relayed bids to him. Model year and hours of operation seemed to be the biggest determination of sales price, especially for the rough terrain cranes.
The auction was like old home week for the crane industry, a virtual who’s who of our American Cranes & Transport ACT 100 list of crane-owning companies. Management team members from most of the major crane rental companies were there as were representatives from most of the major crane manufacturers. Some companies had as many as 10 people in attendance. The active buyers got there early and claimed the prime seats. It was apparent that many people were there to check out the scene, see who bought what and assess the cranes and the prices – a business field trip.
A social event
Ritchie Bros. purposely plans its auctions to be as much social events as business events.
“We realize these are very social events,” said Malinski. “We see competitors openly talking about their projects, their machines and business in general.”
A huge lunch room is open to buyers, sellers and visitors. After the crane auction, Malinski assembled the press group for a presentation by Jake Lawson, senior vice president of sales, for the southeastern and south central region of the United States. A long-time Ritchie employee, Lawson explained how adept the company has become at hosting auctions.
“As you have seen here today, this auction is a lot of work,” he said. “To survive in this business, we’ve had to diversify and bolt on some different assets to give customers more information and the services they want and need.”
Ritchie Bros., based in Edmonton, Alberta, Canada and with 40-plus locations globally, has assembled a suite of services to become a one-stop auction company.
“We can now offer asset and fleet valuations, financing and leasing services and shipping and logistics,” Lawson said. “We use local subcontractors for refurbishing equipment. All of this is a part of our strategy to develop a customer-first culture. We go deep with the customer and it’s a pile of fun.”
The company developed a wayfinding app for the Orlando auction that allowed a prospective buyer find a piece of equipment in the massive yard using GPS software.
Ritchie’s team has also discovered that their auctions generate a lot of data about equipment and the health of the construction equipment industry in general. Lawson presented a rather optimistic forecast for equipment sales in 2017 and beyond.
“The takeaways are that there’s a strong market for both buyers and sellers,” he said. “As future work moves forward from anticipated to actual, the need for high quality used equipment and trucks will continue.
Crane quality high
Ken Butz, general manager of sales for Tadano America, was impressed with the attendance and the quality of the cranes sold. Butz tries to attend at a couple of crane auctions a year to assess used crane pricing and market trends.
“Auctions are a good monitor of changes in market conditions and crane demand,” said Butz. “The age and condition of the cranes seemed a bit better than in the past. I was generally encouraged by the pricing compared to what we’ve seen over the past year.”
Butz talked with several crane buyers, who were there to buy cranes that they would put to work soon because the industry is coming into the “working season.” Of the sellers, he said they were right-sizing their fleets or selling old units that would be replaced with new or newer cranes for better productivity and safety features. The most compelling thing Butz noted was the “optimistic vibe.”
“I believe the upbeat vibe is the result of having the presidential elections behind us, and optimism over the new administration’s commitment to invest in infrastructure and major construction projects,” he said. “Also encouraging is that oil prices have been slowly rising over the past several months which can be a driver for crane demand on a global level.”