State of the mast climbing work platform market
Mast climbers, cranes and telehandlers
The last couple of years have been tough for all of us in the construction industry. Mast climbing work platform manufacturers have been hit particularly hard. A major part of the U.S. market development consisted of a strong mason contractor’s user base. With the volume of work drastically down, we have seen a massive number of used platforms hitting the market, due to contractors getting out of business or getting rid of equipment in order to get through the crisis. Contractors and renters both were hesitant to renew their fleets, due to the economic downturn and the fact that they could get their hands on good-condition equipment at a very low price.
Even though the volume of used equipment available is slowly declining, and we are starting to see slow improvement in the economy, most contractors still are hesitant to go out and purchase new mast climbing work platforms. One key element to increase business volume and profitability as the market picks up is to find the right balance between used, new and rental equipment without jeopardizing the short-term viability of the company.
Bigger contractors and renters generally have a targeted average fleet age, in order to keep some form of balance and optimize their return on investment. New equipment requires less maintenance and usually is more efficient, while older equipment often means increases downtime and maintenance costs but generates more profit as it is often paid for and amortized. A healthy mix of both worlds usually allows companies to maximize profit, while minimizing their risk.
During hard times, companies usually are willing to take the risk of keeping their equipment longer. They can maximize the return on their investment, while not getting the financial burden of adding new equipment to their fleet. Contractors trying to stretch their fleet age often have the tendency to also minimize preemptive maintenance. This will allow generating more profit in the short term, if the equipment doesn’t cause extra down time. This strategy often will catch up on you at some point in time but can be viable in the short term.
Let’s not forget that mast climbers are mainly used to the increase in productivity. An unreliable unit that causes downtime annihilates the advantages of the product, so investing in keeping units in good working condition is a short-term expense but a sound investment when looking at the global picture. This also keeps a higher market value for the products you own.
Besides the equipment that they own, contractors turn to renting equipment in order to answer needs during peeks periods. In harder economic times, masons rely more heavily on rental as they are not willing to take the risk of purchasing equipment that might be sitting after the next contract is over. This is exactly what the industry has been experiencing during the last years. Even though rental reduces the contractor’s risk, it also reduces its profit if the equipment could be kept busy enough during the year.
We are presently at a key point in time, when contractors are starting to position themselves to maximize their market shares in a slow and fragile growth. Already, we are seeing key players starting to position themselves. Some companies are starting to invest more in equipment maintenance; others have started purchasing equipment to renew their fleet. This should cause another round of increase in the used equipment availability, but also should cause the introduction of more new equipment in the market. We also are starting to see a small decrease in the proportion of equipment rented, versus equipment owned for contractors who are having more confidence in keeping their equipment busy on the jobsite in the longer term. It is clear that the contractors who will best handle their equipment needs will give themselves an edge that should help them grow faster and get more market shares in the upcoming years.
For smaller contractors, the market still is favorable to acquiring second-hand mast climbing work platforms to grow their fleets and increase productivity. It also can be an opportunity to introduce the product in their equipment fleet to better position themselves for future growth. Although there are some great deals out there, contractors must be careful when purchasing used equipment. Indeed, there are some key elements to consider in purchasing a used platform in order to optimize the long-term investment.
First off, knowing the equipment past history is important as it will allow you to know what you can expect for the upcoming years. Secondly, it is important to assure that parts are easily available for the product and that you can have manufacturer’s support in case of recall or any other problems. In the same line of thinking, being able to easily find compatible equipment, both new and used, should be an important element in the decision-making process. Finally, making sure that there is an authorized dealer in your area is key, when you need additional equipment, rental equipment, parts, support or training.
Originally published in Masonry magazine.
About the Author
Thierry Lachapelle is marketing and sales director for Hydro Mobile, Inc. For more information, call 888-484-9376, or visit www.hydro-mobile.com.