Buying in bulk
Used bulk handling equipment proves a tougher sell than container units, explains Alex Hughes
There has long been a healthy market for secondhand container handling equipment, given the high costs of new assets, but does that apply to used dry bulk handing equipment too?
Apparently not, according to Port-Trade, a Danish company mainly dealing in second-hand equipment for the Scandinavian market. It notes that it sells significantly lower levels of used dry bulk handling equipment compared to secondhand equipment for other markets, including containers.
Although demand is dictated by the markets cover and as Port-Trade target Denmark and Sweden there is a bias toward box handling. Additionally, ports that invest in used mobile harbour cranes tend to be covering a variety of cargoes, not just dry bulk.
“Every now and then a shiploader also come up for sale, but there tends to be long gaps between availability,” says the company’s John Muller. “Indeed, despite the fact that we have several examples of shiploaders on our website with ‘Sold’ prominently written across them, we do still receive enquiries for these.” He adds that shiploaders are often built for specific terminal dimensions, thereby making it harder to easily relocate them.
Another reason why such equipment is relatively scarce is that Scandinavia does not export a lot of dry bulk - the exception being grain - and those terminals active in this sector already have shiploaders in place. Others tend to prefer grab cranes.
Clients seeking used bulk handling equipment are often looking for a cheaper solution than buying new, however even the lower cost of secondhand units cannot always make some businesses profitable. Several iron ore mines in Sweden have had to shut down recently given the depressed prices in this market. The refurbished secondhand equipment that had been acquired to handle anticipated output at the docks remain idle since the businesses they were set up to serve never got off the ground.
Terex Port Solutions (TPS) sells Terex Gottwald conventional mobile harbour cranes, including portal and floating crane variants based on MHC technology. In the dry bulk sector, its MHCs are used to handle a variety of commodities, including coal, ore, grain and fertiliser.
“One of the advantages of MHCs is their mobility and the ease of relocating them. This not only makes them attractive, but also ensures that there is a healthy secondhand market further down the line,” says Peter Klein, the company's senior marketing manager.
In the secondhand dry bulk market, it’s the 4-rope grab cranes equipped with mechanical grabs that prove popular, says Mr Klein. He points to Spain, where several terminals acquired Terex Gottwald MHCs and where there is now an appetite for the buying and selling of secondhand units of this type.
“Indeed, we have seen this happening in respect of MHCs across various mature markets,” adds Mr Klein. Secondhand cranes of this type are often an option for start-ups and also for those terminals with either limited financial resources or which require very short delivery times.
“Nevertheless, currently, there is no big secondhand crane market, but there definitely is demand out there and we would assume the used cranes business to offer extended opportunities in the years to come.”
Asked why terminals dispose of dry bulk handling equipment that is still very much able to perform quayside lift operations, Mr Klein says that some terminals simply want, for example, to upgrade operations to achieve greater performance with newer cranes that can provide faster working speeds or offer advanced features.
“Operators like cranes equipped with the latest technology, since this will give them an advantage in terms of reduced operational and maintenance cost, as well as allowing them to have more environmentally friendly cranes,” he says.
How long used units can last in front line operation before resale depends on individual customer requirements and strategies.
“Many operators consider selling their cranes midway through their working life cycle. This is because, at this age, used equipment is still in good condition and can continue operating for some additional years. Crucially, there is a very attractive case to be made as part of the crane's total life cycle cost if it is sold on midway through its working life,” says Mr Klein. Nevertheless, many cranes acquired new for bulk operations are specifically built to meet very individual requirements linked to quay infrastructure, and this can make them more difficult to place when they are offered to the secondhand market.
In the case of portal cranes based on MHC technology, the crane is generally dedicated to particular port infrastructure – feeding conveyor belts, or allow trucks or rail wagons to be operated beneath the portal. Rail widths, portal heights and permissible rail loads therefore need to be taken into account by potential secondhand buyers. As a result, such cranes, in contrast to conventional rubber-tyred MHCs, are not so attractive to the used crane market.
“At TPS, we are asked to refurbish equipment that has been sold secondhand. As manufactures, we offer holistic solutions for secondhand cranes, including professional crane inspections, since such reports provide reliable information for perspective buyers with regard to the technical situation of the crane,” says Mr Klein.
“Based on this inspection, we can then undertake several different services: refurbishments and modernisations, operator training, and also formal commissioning in line with authority requirements. Indeed, we would consider undertaking any work wanted by the customer. I would add that we are used to being involved in the movement of equipment between locations, and can offer the buyer a turnkey solution in this respect.”
Asked whether TPS would undertake a buy out of its competitors' equipment and then sell that equipment on into the secondhand market. Mr Klein says that this would be the exception rather than the rule. However, the company has regularly bought up its own handling to allow a customer to upgrade, using state-of-the-art equipment.
“We buy up old machines and supply the customers with new ones, if they want to have the latest technology. But that is not the whole story, since customers do also buy used cranes directly from other operators. In these types of cases either party may involve us in providing support from our comprehensive portfolio of services,” he says.
FULL AND FRANK DESCRIPTIONS OF UNITS
There are normally no guarantees offered with Port-Trade's secondhand equipment. However, this doesn't mean the company tries to hide any defects the equipment might have; far from it, since it relies on its reputation.
“What we do is make it quite plain to the buyer exactly what it is that he is seeing and we are very careful not to raise expectations. The equipment that they are looking at, for example, will not necessarily do what it is that they want it to do. We also advise the seller what their equipment can realistically be expected to do if sold on,” says the company’s John Muller, who notes this means that the condition of the equipment is discussed in detail and possible problem areas identified.
“The previous history of handling equipment is also very important. From that, certain conclusions can be drawn by the potential buyer. Knowing how well equipment is maintained is also a key element in the sale. Indeed, many buyers want to speak to the owner and look at the maintenance records to get a feel of how the equipment has been used,” he says.
To find a market, adds Mr Muller, secondhand equipment has to have been well maintained, since only equipment in reasonable condition generally finds a buyer, given that typical transport costs of moving units are quite high.
Really old equipment that comes onto the market is invariably harder to sell, too, he remarks, as the older it is, the harder it is to find parts and components for it.
That said, “you can still find a buyer for a 20-year-old crane if it's been very well maintained.”
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