Thrift or quick lift

Terminal operators worldwide buy a certain amount of pre-owned handling equipment to supplement new purchases. Some do it for reasons of thrift, others because they need an immediate productivity lift, albeit at a reasonable cost.

Manufacturers, for their part, cannot always keep up with demand during boom periods, while economic downturns can often force terminal operators to re-think purchasing strategies.

Hinrichs Flurfördergeräte GmbH & Co, which is also known as Hinrichs Forklifts, has been active in the buying and selling of used container handlers, reachstackers and forklift trucks since 1991. The company is based at Oldenburg, in Germany, where anything up to 200 units are held in stock at any one time.

Managing director Marco Levermann says it is difficult to give an accurate profile of his customers in terms of terminal size, but notes that typical purchasers tend to use the machines for less than one shift in a normal working day, thereby making secondhand equipment more than ideal for their needs.

“In general, our customers tend to be either container terminals or freight forwarders,” he says.

Wide portfolio

Operating in a broadly similar market is Bendezu Port Equipment (BPE), based in Malaga, Spain and with an outlet in Hamburg, Germany.

According to company director and owner, Andrés Bendezú, BPE’s client base is very diverse, ranging in size from very small companies to large terminal operators. “We have clients from container terminals, multi-purpose terminals and dry bulk terminals, since we sell and purchase new and secondhand port equipment from different sectors. So, our portfolio encompasses elements such as harbour cranes, ship-to-shore cranes, hoppers, grabs, and so on. As a result, we don’t focus our business on a single customer profile,” he says.

He adds that there is currently less activity in the secondhand sector than in previous years but there is still business to be had as each client has a different budget. At the same time, there is a lot of interesting used equipment available for purchase at the moment, he says.

In contrast, Hinrichs sees little change in current demand compared with the historical situation of the market. “It tends to be booms, rather than recessions, that drive sales,” Mr Levermann says. Mr Bendezú sees no notable differences in sales between recessions and booms. He points out that, if clients need second hand equipment, they will acquire it, irrespective of the economic situation.

“As for whether we sell more yard equipment or quayside cranes, I would say that there is parity between the two,” he says. Hinrichs specialises in yard equipment, with both reachstackers and empty container handlers generating similar levels of sales. Nevertheless, there is a definite ranking among manufacturers when it comes to customer preference. Kalmar is top, followed by Linde, SMV-Konecranes, CVS Ferrari, Hyster, Liebherr, Fantuzzi and PPM, in that order.

With regards to the optimum age, Mr Bendezú believes there is a market for any used equipment and that age doesn’t necessarily have to put people off. As an example, he cites a company with a restricted budget: “It still needs an opportunity to purchase port equipment, which might mean it will focus its interest first on older equipment, since this is much cheaper. If it is still in reasonable condition, a secondhand unit will still be able to fulfil tasks asked of it correctly,” he says.

Sold as seen

As a rule of thumb, BPE will not normally refurbish secondhand equipment prior to resale. If a unit is working correctly, it will be sold as is. However, if a customer asks for it to be refurbished, or something needs repairing in order to secure the sale, then BPE will do this. Nevertheless, Mr Bendezú says that this will normally be something like repainting or undertaking a minor repair, rather than an extensive overhual.

It is a similar situation at Hinrichs, where units are supplied as seen by the customer, although all are eventually delivered following a service and also repaired, if necessary.

“We often get asked for secondhand units that we don’t have in stock,” says Mr Levermann, although requests can often be fulfilled. “We work together with all the big manufacturers and buy most of our equipment directly from the suppliers. In general, given this close relationship, we don’t have too many problems in getting hold of good quality secondhand units.”

At BPE, requests also come in from customers for pieces that it doesn’t have on its books. “These requests tend to be made because our customers already trust us, which means they prefer us to seek out what they want first, before going to other suppliers. Given our contacts and supply partners, we can often find what our clients are looking for,” he says.

As for whether BPE can also pick up the quantity of secondhand equipment that it would like, Mr Bendezú stresses that the overall market is very mixed and demand is changing a lot. “Much of what we do depends on a whole series of factors, including equipment breaking down or being renewed, while big, new orders mean that older units get displaced to the secondhand market. “If there is more work, terminals might decide to hang on to older equipment for longer. Conversely, there are also times when good purchasing opportunities present themselves at very interesting prices. “At the end of the day, there are sales to made in each sector and customers can be found for most units,” he says.

RUNNING INTO THE GROUND

Terminal tractor manufacturer Mafi doesn’t see many of its units finding their way on to the secondhand equipment market. Gino Cherradi, global sales and marketing manager for Mafi, states that, globally, there are only about five to ten of the company’s terminal tractors that have been sold secondhand.

“From our experience, when a customer buys one of our machines, they run it into the ground, using them until they die. They don’t tend to sell them on. Our tractors therefore have to be reliable and, indeed, we have many units that entered service in the 1980s that are still working,” he says.

In place of secondhand sales, there do tend to be displacements within terminal operating groups, with state-of-the-art machines replacing older units in heavily-trafficked terminals, allowing these, in turn, to be released to less instensely worked facilities.

“Because there is only a very limited market for secondhand terminal tractors, we don’t design ours with a resale value in mind. Today, given market uncertaintities, customers don’t want overly-engineered products; they see terminal tractors as disposable items,” says Mr Cherradi, pointing out that nobody can nowadays predict what the container handling market will look like over the next decade.

He adds that the price terminal operators now get for handling a container has dropped so significantly in recent times, it makes no sense for them to invest heavily in a tractor, because it is only moving a container from A to B, and providing that type of machine isn’t really rocket science.

“If somebody could forecast what the market for containers would look like in 5-10 years’ time, terminal operators could probably justify higher investment in tractors. However, the lack of stability means that, if we were to produce a revolutionary new model, it can’t cost more than the model it displaces.”

Asked why there is such a bouyant market in other yard equipment, such as reachstackers and FLTs, Mr Cherradi explains that this is a function of how that type of equipment tends to be financed. Whereas cheaper (€70,000-€80,000) terminal tractors tend to be bought outright, more expensive reachstackers and FLTs, which can cost €350,000-€400,000, are often leased. Whenever there is a strong leasing market for equipment, there is also a secondhand market.

In the case of FLTs, these often get leased by logistics operators in large batches, where unit availability is the most appreciated factor. Since these types of operator want the best – in other words youngest – machines there are to ensure that reliability can be maintained, the secondhand market benefits from an ongoing supply of older machines.