THE UPTIME APP
THE REFORMATION OF THE CONSTRUCTION EQUIPMENT INDUSTRY – PART TWO
OVERVIEW -> one of the most consequential liabilities present in today’s construction equipment sector is the lack of technology – broadly applied. As with most industries platforms exist to bring efficiency to our business activities, today they mainly focused on rental fleet processes, collections for damages, maintenance and parts & service fulfillment activities. Those commercially available technology solutions are becoming familiar brands and currently serve the low-hanging fruit of the industry by improving inefficient client processes & based on the provider’s revenue stream expectations. While a handful of savvy tech entrepreneurs have isolated “honey holes” – the industry remains behind the curve, fractured and ripe for holistic reformation.
The current landscape -> most scaled organizations employ state-of-the-art Enterprise Resource Planning (ERP, SaaS) solutions for their financials and “back-end” processes & tie-in third-party solutions specific to their needs. The tech newcomers in the equipment industry typically provide solutions based on “inspections and condition reports” with data entry (artificial intelligence assisted) on handheld devices & laptops, feeding their closed-source software: rightly so in “protecting” their time & financial investments. Then there are the “OEM Kingpins” serving their legacy strategy of vertical integration with solutions designed specifically for “in-channel branded assets” (ill-suited for allied gear) rolled-out to their Dealer Network – confining to say the least. As a practical matter, just try making sense of a CTS (undercarriage) report on a trade inspection for a CAT dozer, while viewing on another OEM’s proprietary inspection template – “rinse & repeat”, the examples are endless. Ultimately those who receive less, not more, are equipment owners & end users and those who attempt to arrive at fair and accurate asset valuations. The evolved tech providers are on the right track and should be keen to participate with a broader suite of solutions – meanwhile, the market deserves more, with the logical initial investment addressing the most basic space of “ongoing inspections and condition reports”. The roots of the platform will have an easy ride into the depths of the industry.
Conceptual deliverables & collaboration -> a robust app (iPhone/Android) solution will be developed with the breadth to document the complete and entire existence – original build, operational and commercial activity – of any construction equipment asset regardless of make and model. “THE UPTIME APP” is a cloud-based, neutral platform with an attractive premise: management of capital equipment assets, cradle to grave, regardless of make, model or category.
How the data is utilized will be driven by the market, and potentially limitless depending on the app structure, desire for platform standardization, QA/QC, management & monetization, sharing and/or licensing arrangements. Open-source software (OSS) or a workable variant would foster wide and accelerated acceptance versus a “closed-source proprietary” approach. The beauty of “open source” or “permissive-licensing (BSD-style)” solutions is unleashing the power of competition and innovation in an industry far behind the curve compared to others. While extremely important on many fronts, this area of discussion will be tabled – remain completely open – as participants and stakeholders chime-in with feedback and interest.
The UPTIME agenda delivers a comprehensive data-driven solution aimed at consolidating information typically residing in distinct locations & compiled by a variety of sources, many of which will be averse to sharing this critical data. As the use of UPTIME becomes embedded & required within lease contracts, insurance policies, end-user fleet and resale activities, etc, “the dominoes will fall” throughout the industry and replace (or assimilate) many of the current solutions in the fractured construction equipment space. Innovation requires conceptual thought, design based on experience & observation, acceptance and bringing new ideas to the market. The following commentary should be considered “do-able” as the winners will be our customers and the industry, regardless of certain resistance from sectors of the establishment.
What will UPTIME include and offer?
ORIGINAL CONFIGURATION DATA -> as machines make their way through OEM manufacturing facilities asset “build” data is uploaded to a file, consider a birth certificate for a machine asset. That data resides originally with OEM’s, of which the largest and well-known would not likely share outside their OEM Dealer network. Eventually, complete configuration data would become accessible downstream as machine assets are sold and the players involved in the sale & delivery (OEM Dealers, financiers, lessors, end-user/owners) would make the data available for manual input – UPTIME files will be populated with configuration data regardless of initial “pushback” by OEM’s, as each “Machine Asset Profile” (MAP) is created. Configuration specifications (SPECS) allow potential buyers in diverse geographical locations to ascertain the viability of any given machine for their use. All data is pertinent to the machine asset’s life cycle through varying phases of ownership.
LOGISTICS –> original OEM configuration data would include precise machine dimensions & weights (whole or broken-down) with options unique to each asset as defined by the “OEM Build Specs”. This “DIMS” data will allow inland and maritime freight organizations to accurately quote rates in a highly competitive space. “AI” generated transportation quotes will become the norm as the applied technology compiles and consolidates data, vessel availability, space & transit times, service options and rates for the global transportation sector. Much of the technology required for logistics exists or currently under development, simply needs to be pathed & interfaced.
ARTIFICIAL INTELLIGENCE (AI) -> basic machine configuration & DIMS data will be the standard by which future condition reports will be compared. When a machine asset undergoes modification implying changes to valuation, DIMS, etc – early UPTIME (Beta) will have “opinions” which will evolve to provide “reliable answers” – consider a dozer with “sweeps & screens” added, a truck with bias-ply replacement of original radial tires, or a loader/telehandler with “foam-filled” tires…value-added options & general marketability will be resolved via AI, neutral and relatively more efficient. Artificial intelligence will inherently play a vital role in the management & use of massive volumes of available data: from collection to compilation & analysis in a plethora of current and future applications.
MAINTENANCE & REPAIRS –> no data is more valuable for a machine asset than its breadth of available history, from replacing wear items to component exchanges & machine rebuilds. Capturing data varies as OEM’s have vertically integrated proprietary applications for their dealer network – historically experiencing significant falloff in reporting after original and/or extended warranties expire (typically 12 & 36 months respectively, limited by machine hours) and the OEM Dealer’s predominance fades. For example, it is common for sellers to tout “working versus idle hours” when marketing a machine early in the lifecycle, because that is when history is most accurate. Recognizing that OEM warranty periods run parallel to “OEM rules of infringement” (restricting sales outside a given territory) is important, and an understandable milestone for potential buyers expecting good historical data.
As machines become “used iron” and fair game for resale by all market traders, the secondary market (non-OEM Dealer) for technical service & repairs is composed of relatively few providers and applications, aside from the end-user performing routine tasks in-house (or not). Recall in many cases, machines are consigned to auctions by leasing companies, currently the predominant asset-owner class in the USA (see my article “Building Your Own Brand”, July 25th). QA/QC is influenced by provider competence, budgetary decisions & real outcomes in this phase and rife with blinders. As machines move through their lifecycles today, documenting complete and accurate data ongoing is precarious at best, making this functionality the most challenging to develop within “THE UPTIME APP” – while simultaneously providing the greatest commercial value to our industry, reflected in efficiency and cost savings, reduction in management hours and creating new revenue streams for users and service professionals up & downstream. Currently the availability of history for a machine with an expected life of twenty (20) years would inherently have little trusted data for more than half of that period. UPTIME will force drastic change in this area as part of “The Reformation of the Construction Equipment Industry”. A robust cloud-based platform for management of equipment assets, cradle to grave will be the “solution of choice” by addressing the void of historical data, thereby making well-maintained machines more valuable, longer.
DIAGNOSTICS & PARTS -> proprietary technical software and parts are controlled by OEMs and their Authorized Dealers, a subject that has been argued at the highest level, the U.S. Supreme Court. The “Right to Repair” movement – “If you own something, you should be able to repair it yourself or take it to a technician of your choice” – has resulted in legislation in some States but not yet resolved throughout the USA. UPTIME, over time, will drive the solution as grassroots market acceptance will force OEMs to respond to their customers’ desires and mitigate the risk of decreased resale values for their equipment. UPTIME will provide the tools to manage fleets comprised of various machine brands & models, mirroring the reality of end-user equipment fleets. Consider this issue & sharing of TELEMATICS data or access via third-party, subsets of the overall MAINTENANCE & REPAIRS cause and in the best interests of customers.
TELEMATICS –> networking communication platforms between OEM Dealers and End-Users of equipment assets. Capacity to remotely monitor machines in the field, detect abnormalities & alert clients, download ECU data (machine operation history) in reporting formats. The most favorable outcome for customers is a standardized transmission solution across all makes & models, avoiding the cumbersome and inefficient task of creating multiple software interfaces for something this simple. UPTIME can drive behavior to a resolution, with broad market acceptance based on leveraging the power of competition and innovation in the marketplace.
TRANSPARENCY – “THE DOMINOES WILL FALL” throughout the construction equipment industry as the OEMs and their Authorized Dealers who actively promote the sharing of information & data into the UPTIME solution will see resale values of their branded equipment assets increase relative to competitors who drag their feet in the face of market-driven evolution. Customers are much more likely to gravitate toward a used machine with easy-to-digest historical data, than one without…regardless of past preferences. “THE UPTIME APP” is a tool, long overdue, and only the next step in “The Reformation of the Construction Equipment Industry”.
How will UPTIME be used & who will invest in development?
MARKET CONSOLIDATION & CHANGE – the argument in favor of a user-friendly cloud-based app to manage equipment assets “cradle to grave” has been contemplated long before now, at least in other industries. The fact that sectors of our industry are being served “a la carte” where entrepreneurs have identified potential revenue streams speaks to that. Some of those entities may form part of UPTIME development, become assimilated or acquired as the UPTIME build-out serves more users and gains momentum. Detail and discussion of a predictable industry evolution – with foundations based on this conversation – will be addressed in the next article “FUTURAMA” (third in this series), outlining the continued migration of investment away from the classic “New Sales Model”, forward to the “Parts & Service Centric” model & inherently driven by original OEM Product Quality. Supported by a landscape of highly-competitive aftermarket service, customers will evaluate, choose & value their equipment suppliers on equipment reliability & innovation, service experience & responsiveness and overall cost of ownership – less on new sales promotion and staff.
MONETIZATION, SALES & MARKETING – the UPTIME platform will bring supply & demand together in an efficient, user-friendly manner. Players in new or reconstituted roles offering “added-value” to processes and operations will share in the revenue streams generated within the construction equipment industry, replacing the stagnant or unsustainable. Organizations and individuals providing efficiency, cost reduction and value will emerge as they liaise with operations and support construction equipment users in all aspects of project management dependent on equipment productivity. Used Equipment & International Experts will be key players as secondary markets increase in importance.
LENDERS & LEASING INSTITUTIONS – with most new machines being delivered into the USA market on leases, these organizations would benefit more than any other single user, in my view. Lease contracts would include required periodic UPTIME inspections in the condition clauses to track compliance and ready machines for resale long before assets are returned. Addressing the pervasive issue of “predictable conflicts” as leases end and reconciliation of “required versus actual condition” is required, often delaying the process and/or redefining final disposition of equipment assets (for in-depth discussion see my article “Building Your Own Brand”, July 25th).
OEM DEALER PARTS & SERVICE – RENTAL FLEETS, GENERAL CONTRACTORS – no elaboration required
SERVICE TECHS, INSPECTORS – monetization and sustainable income will drive participation. Notwithstanding the guidance of artificial intelligence, well-trained mechanics will be the ideal first choice for inspections and documentation of the work they have performed on machines in the shop or field – equipment owners will have the option to hire techs for UPTIME inspections and related services, a rating system will allow both tech and owner to rate each other on a variety of KPI’s.
SOFTWARE DEVELOPERS – with ample opportunities in a barren tech landscape, this group will thrive and enjoy employment for many years.
SUMMARY – when a confluence of readily available technology meets an industry rife with inefficiencies, something must give. For those with vast experience and a penchant for business development – currently defined by technological advance – it is incumbent on us to impart knowledge in positive, productive ways. This discission is only beginning, meant to provoke rational thought and preparedness through dialogue about what we can reasonably expect & embracing impending change.
*Look for the final article in this series “FUTURAMA” (December 2024) – addressing issues detailed above and further exploring how and where the industry will evolve in the next decade and beyond. Topics of discussion include Mega Equipment Centers (MEC), autonomous & remote-controlled gear, breakdown of traditional sales and retail behemoths and the ultimate dominance of parts & service providers.
It is my aim to forward the application of technology throughout all aspects of the construction equipment industry, regardless of scenario, partnering with organizations driven by delivering solutions and adding value to the client experience.
Contact: Bret Creech, Cell/WhatsApp# +1-813-922-9840 / Email: info@mistermaquinaria.com
BUILDING YOUR OWN BRAND (BYOB)
THE REFORMATION OF THE CONSTRUCTION EQUIPMENT INDUSTRY – PART ONE
OVERVIEW
“Building Your Own Brand” (BYOB) is a pillar of maintaining performance, productivity, market value and optimizing ROI for equipment assets. In the absence of an established brand and reputation (real or perceived), the prospect of achieving maximum returns on resale is diminished. This conversation is the first in a series of commentaries regarding “The Reformation of the Constructions Equipment Industry” – and focuses on actions equipment owners can take in response to a rapidly evolving market…
One year ago, the frequency of calls began to increase – voices of concern and distress at the malaise in construction equipment secondary markets – “how is your business?” Tones reminiscent of the housing market collapse and recession of 2007-2009. In an industry built on grit and egos, rugged individualism and hard work, it’s common for equipment owners to believe they can “gut it out”, when confronted with adversity – for the most part, in their experience, always have. What happens when they cannot, regardless of the reason or who they are?
To be clear, the concept of “equipment ownership”, has evolved over the last dozen years – a classic paradigm shift. While actual “ownership” was historically dominated by General Contractors (GC), Mines, Municipalities, OEM Dealer & Independent Rental Fleets – the landscape has changed. Leases have become the “quasi-ownership norm” of choice for several reasons: 1) month-to-month costs are far-less expensive than renting when coupled with the confidence of a solid projects pipeline; 2) leases offer limited financial liability on a manageable time-horizon, usually measured in two-year commitments; 3) CFO’s enjoy flexibility in accounting and options to extend usage to match project requirements.
In my observation there is a direct correlation between the dominance of equipment leasing and the recent and steady upsurge of “commodity-based” digital platforms in the marketplace: legacy titans, regional staples, new and rebranded online platforms – all responding to market demand with expanded services, competitive fee structures, claims of convenience and compliance with legal norms (auctioneers) associated with repossessions, disputes, court judgements, etc.
Today, the “Lessors” – commonly OEM Financial Divisions, Banking Conglomerates (Citi, GE, WF +) and an array of Rural Banks and Credit Unions – are the institutions “holding the paper” and legally the true equipment owners with a specific time horizon for earning revenue, followed by liquidation via sale into secondary markets -> rinse and repeat. While financiers are the new “dominant owner-class”, the end-user can usually exercise a buyout option (rarely used) based on the loan residual and/or current Fair Market Value (FMV). Financier Lessors prefer outsourcing operational management (maintenance, repairs, inspections, resale) of equipment assets, a difficult proposition considering the increasing volume of assets on their books. Intermittent market-makers currently fill the void, “Building Their Brands” with third-party equipment assets and digital content. Because “Financier Lessors” generally lack marketing infrastructure, brand recognition (BYOB), competent staff and efficiency to achieve maximum returns on resale – below average net proceeds are common and will remain an issue until an industry-wide reformation gains traction.
OEM Financial Divisions – the bulk of the “Financier Lessor” class – routinely experience delays in processing off-lease equipment for resale when “predictable conflicts” arise as leases end and reconciliation of “condition clauses” versus actual “returned condition” is required. These conflicts arise when maintenance and repairs on leased machines are sidelined by “End-User Lessees” during the final phase of the lease. Financier Lessors may require the inclusion of “Total Maintenance & Repair” (TM&R) contracts offered by OEM Dealers (Service Departments) within their lease documents, but those costs are often considered prohibitive by End-User Lessees, who balk & commit to maintaining the equipment themselves. Competent OEM Lessors mandate third-party inspections be performed approximately sixty (60) days prior to end-of-lease dates, allowing them to prepare for what’s just ahead. While OEM Dealers (executors of the OEM Financier lease docs) have no direct financial liability as machines are returned, they do have potential issues as they navigate, manage and mediate the reconciliation of equipment condition…consider the details –
1) For the End-User Lessee, the OEM Dealer is the “face of the brand”, for the equipment and disagreements about who eventually pays for “deficiencies” defined in the lease condition clauses – often resulting in customer threats to take their business elsewhere
2) OEM Dealer Service Departments (in most cases) would execute the work they quote (based on the pre-return inspections) to bring the equipment into compliance with lease condition clauses
3) A machine with unsettled disputes is parked on the OEM Dealer Yards (often for months, free of charge) awaiting resolution as the OEM Financial Division Lessor strives to be “made whole” on their asset and greenlighted to resell at a price based on the “residual value” calculation, a major component of the original estimated revenue stream – assets in financial purgatory are not a good look on an OEM Dealer Yard
4) Saddled with condition deficiencies, groups of machines “in-dispute” are often relegated to “sale at auction” by the OEM Financial Division “Lessor” (recall the legal recourse issue) – subjecting themselves & the OEM Dealer to sales results that could damage future retail sales opportunities of their OEM branded equipment
The collateral damage that can be done to an OEM Dealer’s reputation and brand is wildly unpredictable – all while never actually owning lease assets. Because the popularity of leasing is driven by customers, demand remains strong and does offer the OEM Dealer the benefit of improved market share in their territories. Expect little change in the near term.
Accurate as described, the scenario above is not exclusive to OEM Lessors, but highlighted first to demonstrate the vulnerability of a specific brand to this convoluted and inefficient process. Non-OEM Financier Lessors are exposed to the same off-lease delay scenario but generally apathetic to the OEM brand, ultimately providing more leverage to demand strict compliance to the “condition clauses” defined by their lease – they simply follow their End-User Lessee to the next OEM brand allegiance. The off-lease process model is flawed for all involved – a proverbial “elephant in the room” – which must be addressed throughout the industry, with a customer-centric focus.
Two distinct activities are in-play when an organization employs BYOB as strategy locally, at a distance, within the construction industry and on projects via asset management activities: 1) SHARING THE STORY, and 2) LIFECYCLES & TRADING IN EQUIPMENT ASSETS. Both should be considered “mission critical” regardless of business climate…as each complements the other creating rich organizational synergies. For example, if an equipment owner is listing their surplus equipment for sale on digital platforms pointing to their website, the traffic generated by potential buyers would inherently produce more “views” and surfing through the organization’s web pages -> BYOB -> possibly energizing a future employee, a contract for work or another quantifiable benefit. The discussion will focus on maximization of value, uptime and ROI of equipment assets from acquisition and utilization, through sale and transfer to future owners.
SHARING THE STORY – involves everything from signage & identifiers on equipment, vehicles, brick & mortar facilities and jobsites, hardhat decals, business cards, company logos and apparel -> to digital and social media, public outreach & recognition, association memberships & participation, advancement and hiring of employees, job postings, completed projects, etc. While enterprise success in execution and results vary, a holistic approach is key.
“Building Your Own Brand” (BYOB) in the public arena typically involves broadcasting the presence, reputation, ability to serve, mission statement and prowess of an organization, including but not limited to -> comprehensive value to the communities served, volunteerism and altruism (outreach, giving back), employee contentment and disposition, support of families, innovation and professional challenge, distribution of earnings, wages, industry leadership, skills development, peer ranking and perceived viability going forward. Observing trends over the last 5-10 years, it is clear “SHARING THE STORY” has become a more common and frequent activity in the construction industry, rightly so…backing it up matters! Allowing the public to share, witness and weigh the portrayal and messaging versus actual deeds can endear them to the organization, create synergies, sense of communal pride – even soften a blow when a reputation is challenged.
Large organizations tend to have established, in-house marketing & messaging activities assigned to Sales Divisions, HR or even C-Suite Executives with ultimate oversight and guidance – executed by staff immersed in company culture. In my experience, the most common “unforced error” at this level is subcontracting “BYOB” to marketing agencies that have little or no experience in the construction industry, organizational culture, and even require written “copy” from company staff to produce ongoing unique content. While nice graphic design and cool drone footage are welcome, exciting and fun to watch…void of compelling “storytelling” by a culturally savvy insider, the frills grow stale and eventually diminish desired impact in the marketplace. Established businesses often outsource missing pieces (i.e. graphic design, digital presence) and utilize an experienced industry consultant to manage & expedite BYOB projects to fruition, just as the contractor would rent machines to fill gaps in equipment packages needed for earthmoving and construction projects. For large organizations the goal of “Building Your Own Brand” (BYOB) should focus on “self-reliance” and driving traffic to their own media platforms, managed by internal staff. Maintaining a limited bench of business consultants and media production contractors is a good strategy for specific needs.
Medium and Small firms are prone to struggle more with “justifying costs” of BYOB, often assigning marketing & messaging activities to staff ill-equipped to take-on more tasks, lacking the skills, interest or time to be effective. Simply “throwing another log on the fire” can be detrimental to those charged with additional responsibilities, and ultimately the organization. None of these challenges change the inherent need to promote the organization in the public domain with adequate investment, talent (in-house or contracted) and ownership’s commitment to the cause. Competent and skilled graphic artists can be contracted or even found as temps via college intern programs. Having knowledgeable personnel dedicated to driving & developing or managing & approving unique messaging content is critical to success. Contracting an outside Project Manager to guide and assist in the initial design and implementation of the required platforms is a good option – very common – when they don’t have the talent and competence internally.
In the “Digital Era” communications platforms are either inexpensive or free, and required by our emerging leaders in the construction industry as future mediums of commercial activity. Organizations choosing to ignore clear trends risk becoming less relevant, less patronized by their customer base and miss potential for growth. Costs associated with “Building Your Own Brand” (BYOB) can be substantial – however, once a website, social media pages and email marketing engines are designed and built, monthly costs are quite reasonable and the technology easy to manage. Once an employee(s) is identified (aptitude) and trained, they usually enjoy their role, become immersed and highly motivated to learn as they liaise with others in the organization: contributing professionally, socially and even financially with new revenue streams.
At this point ownership and management must consider “team building” versus “outsourcing”, and the inherent value of each to the organization. Hiring a consultant to manage the project – initial assessment, design, buildout, training, testing, launch of BYOB platforms & handoff – is ideal, while removing the burden on staff and delivering results on time. In my view, paying a third-party monthly fee into perpetuity to maintain media platforms and manage content is nonsense. As third-party contractors move to their next projects, they naturally become less connected to your company culture and “the daily” – if you like an individual, retain them as a consultant or offer them a position on the team! Developing and maintaining internal ownership is best practice, creates organizational synergies and properly leveraged, will deliver payoffs for the enterprise.
LIFECYCLES & TRADING IN EQUIPMENT ASSETS – considering elements of “Building Your Own Brand” likely exist in some form (webpage, social media) and the relatively low-cost of enhancing or adding platforms – recognizing the value of earning goodwill in the public domain (locally and regionally) is already apparent. “SHARING THE STORY” offers a micro view of the organization and current footprint. Now we consider expanding viewership and geographical reach with the intent of “adding-value” (earned or perceived) to equipment assets by marketing to a larger audience far beyond the home-turf where the core business operates. The most significant and quantifiable payoff of BYOB lies in the discipline of trading (buying and selling) in equipment assets. Consider this…wouldn’t most people expect an industry leader (defined by excellence in execution of their core commercial activity) to maintain quality throughout all aspects of their business? Yes, they would, until or unless they have reason to believe otherwise. Recall the organization has been built on a vision to reach defined goals and deliver quality, rooted in perseverance, grit, rugged individualism and hard work. Adding effective, proactive marketing tools to your BYOB toolbox is the next step.
In my experience, one of the most common and egregious errors equipment owners make is overdependence on marketing platforms which build “their” brands and businesses with the equipment assets and digital content of actual asset owners, while owning none themselves – collecting fees and commissions essentially for project management and marketing. Most equipment owners are very familiar with the costs and lack of control associated with these service providers.
Online listing services, auctioneers and commodity-based marketing platforms have played critical roles in our industry for decades and added value in the process – no doubt that will continue – but those platforms and services should be considered only enhancements and components of the equipment owner’s resale strategy, not pillars. A common argument is “they have a critical mass of potential buyers” (valid) which sounds impressive…but how impressed should you be? How many of those potential buyers are redundant across several well-known platforms? How many of the platform users are truly considering your equipment asset at any given time? After signing-up, how much time and marketing effort will your high-value asset receive once it becomes a data point, part of a larger, homogenous offering? In my experience it is best to utilize only the equipment listing platforms as they tie-in easily to the proprietary website you have built, and where you intend to drive traffic.
Crafting an effective marketing strategy & achieving success includes the creation of esthetically pleasing online listings & posts with quality images, accurate condition and configuration detail – reliable delivery platforms capable of handling high traffic – seamless communication between buyer & seller – responsive and knowledgeable staff available for customer engagement. These are the essentials of “Building Your Own Brand” once the enterprise commits to trading in equipment assets and establishes “buy-in” throughout the organization. For most media services and consultants providing “SHARING THE STORY” support services, the “TRADING IN EQUIPMENT ASSETS” aspect of the business is “beyond scope” primarily due to lack of industry experience. Again, experience dictates the “equipment-owner, end-user”, develop and manage their own daily engagement with potential buyers – outsourcing does not get it done.
The equipment owner with well-maintained equipment inventory, in average or better condition, will employ BYOB to extract a higher return on investments (ROI), redirecting financial outlays back into their enterprise, reaping the rewards of DIY in managing their equipment assets. Be advised -> engaging potential buyers from different time zones requires flexibility and dedication – this is not a “9am-5pm” job responsibility – fortunately, most “first engagements” with potential buyers can be handled quickly on a handheld device. Allow your team players to innovate and perform uniquely within your organization under agreed terms: hybrid schedules, cross-training, remote work, incentives, freedom to create new business and be duly compensated.
Having been directly involved in these specific activities for two (2) decades inside top tier OEM Dealers (CAT, Volvo), the world’s largest equipment auctioneer and now my own brand for over six years – learned what it takes to build successful marketing infrastructure & sell equipment domestically and worldwide. Consider some of the following potential benefits of “Building Your Own Brand” as an equipment owner and entrepreneur ->
- Control and manage your equipment assets, maintaining value and ROI
- Market & Sell equipment on commission for others who do not
have the capacity and skills - Engage in business development leading to new incomes streams
- Become a magnet for pre-Tier-4 equipment (< 2012), sell into
international markets - Offer inspection services to “Financier Lessees” with leased
equipment in your region - Be a compensated storage option for “Financier Lessees” (they pay
their bills) - “Build Your Own Brand”
in markets where you may someday operate - Maintain a keen awareness of market trends allowing proactive
moves before others - Improve your own fleet with situational awareness, picking-off
good deals on equipment - Attract skilled talent into your team from everywhere, keep them
offering opportunity - Develop a team who thrives on professional challenge and
opportunity - Network with industry peers you otherwise may have never known
- Maintain an entry point for new employees to be assessed for
future roles - “Build Your Own Brand”
where you currently operate and fortify organizational strengths - Stay current and innovative as an enterprise, become a leader in
applied technology - Be prepared for the future and ensure enterprise viability
*Look for the next article in this series “THE UPTIME APP” (Q4/2024) – addressing issues detailed above and furthering the outlook for the industry, implications, recommendations
Mister Maquinaria LLC – is a version of the marketing engine detailed in this discussion, now in our seventh year. The next phase of our business development is consulting into the “equipment-owner, end-user” space delivering BYOB via Project Management. Our methodology is based on embedding ourselves with the client, at their direction, demonstrating best practice and training client staff with our platforms as models. Clients define their goals, we feedback with ideas and framework. Projects typically range from a few weeks to six months, or more, until agreed goals are achieved.
Contact: Bret Creech, Cell/WhatsApp# +1-813-922-9840
Email: info@mistermaquinaria.com
Rebuilding Venezuela – Opportunity & Path Forward
It is clear we are nearing the end of the Chavez-Maduro era: the “starting bell” is now ringing for organizations yet to establish an exploratory group tasked with assessing commercial opportunity. For those planning to participate in the recovery and reconstruction of Venezuela, it’s time to consider historical context, make reasonable comparisons (pre-Chavez vs now) regarding transformation of local cultures, current societal realities (in-country & diaspora), and focus on what comes next.
What organizations should know regarding opportunities and expected duration –
- Venezuela is a founding member of OPEC and possesses the world’s largest known oil & gas reserves, approximately 20% of the global total
- Chavez Era production peaked in 2008 at 2.4 MM BPD, currently production hovers around 700,000 BPD and declining
- Oil & Gas required annual investment = USD$15-$20 Billion, medium-term (5-10 years) – predominantly from private sources – with expectation of three (3) years to increase production to 1.5 MM BPD – per Francisco Monaldi*
- Agricultural Equipment required annual investment = USD$5 Billion, during next 5-8 years – per Hiram Gaviria*
- Transportation Infrastructure estimated annual investment = USD$10 Billion, next 5-10 years
- Electrical Power Grid investment requirement = USD$1.5 Billion – next 3 years
Who are likely candidates from the USA? We begin with Oil & Gas Exploration companies and their classic support network (Chevron is currently operating there under a US Govt waiver). Engineering, Procurement & Construction (EPC) firms: Bechtel, Foster-Wheeler, Fluor, others, and their competent sub-contractors – teams capable of handling projects broad in scope: oil & gas facilities to transportation infrastructure, water systems, electric power plants/grids and likely some expansive agricultural/farming infrastructure. Original Equipment Manufacturers (OEM) of earthmoving, mining, construction, power generation, agricultural, pipeline and associated machinery. Manufacturers & Suppliers of Construction Material. USA-based Service Partners engaged in rebuilding high-value capital equipment and spares for heavy industry – in Venezuela these networks, contractors and service providers have been depleted and are currently unreliable.
In my opinion, an irreversible process leading to change in government consistent with the demands of the political opposition lead by Juan Guaido, National Assembly President, will likely commence within sixty (60) days, and certainly by the end of 2019. Criteria as follows –
- El Cese de Usurpación – End of the Usurpation of Power (by Nicolas Maduro)
- Gobierno de Transición – Transitional Government based on Plan Pais model*
- Elecciones Libres – Free and Fair Elections within 9-12 months
Involving oneself in “nation building” is not a typical career discussion; however, my unique experience and strong ties to Venezuela & Latin America require a sharing & transfer of knowledge intended to accelerate relief for a traumatized population and commence a complete rebuild of their Country. Déjà vu, all over again…what happens next has been foreshadowed by what transpired two decades ago during Venezuela’s brief, and sole period of Oil & Gas industry privatization in the last 43 years.
Upon arrival in Venezuela (April 1996), I was an ExPat “operations manager” for a coal stockpile & loading facility on Lake Maracaibo: receiving product (predominantly from Colombia), sizing and loading oceangoing ships with tugboats, barges and clamshells into the holds: a process built on archaic technology, as was the reality for many sectors of society. Coincidentally, a longer-term opportunity was just ramping-up under the administration of President Rafael Caldera: Venezuela’s “Apertura Petrolera”, a privatization effort inviting multi-national companies into the Oil & Gas industry via partnerships with PDVSA and other government entities. Oil & Gas revenues were in decline following twenty years of “nationalization” (1976-1996) which left production infrastructure poorly maintained and dilapidated due to endemic corruption.
The first round of privatizations began in January 1996, and structured to leverage the capital, experience and technology investment of international partners. Bidding packages were presented on specific oil field “blocks” via long-term production leases, usually 20 years – with the government taking royalties after partner-operators met a measurable threshold, defined by unique agreements. The clock started when a partnership deal was signed. At the time, Venezuela was exporting crude at approximately 2.8 MM barrels per day, sourced mainly from mature fields on Lake Maracaibo, Cabimas and several others in Western Venezuela. By mid-1997, the vast, previously unquantified reserves in the East of the Country (Orinico Belt, Anaco, Jusepin, El Furrial, Dacion, Pariaguan, etc), were undergoing significant expansion on the shoulders of the new “private sector partners”, increasingly managing operations, exploration and refinement of the Country’s vast petroleum and natural gas deposits.
Chevron, Conoco, ENI, Total, LASMO, ExxonMobil and a multitude of other “internationals” were participating, mainly building new facilities in Eastern Venezuela with experienced, domestic contractors executing the civil works and mechanical builds under project management by competent international contractors – a classic Oil & Gas boom. The Venezuelan Government was “having it’s cake and eating it too”, overseeing a revenue-earning model with much needed investment financed predominantly by international corporations.
Enter President Hugo Chavez in February 1999, with a socialist agenda including the re-nationalization of Oil & Gas exploration, extraction, refining, and other natural resource industries: most notably coal, gold, iron ore mining and processing. Fortunately for Venezuela’s petroleum industry, three years into the front-end investment significant completion of upgrades and new facilities construction had been executed by the international partners, most were in early production mode. Over the next few years President Chavez methodically began the “buyouts” of block concessions granted under the “Apertura Petrolera”, and the Country was again subject to the “culture of corruption” that had precipitated the decline of production experienced several years prior. Chavez also had a popular revolt on his hands in response to aligning his government with Cuba. Venezuela became polarized as dissident businesses, politicians and individuals were marginalized – property and commercial interests were confiscated and placed under the management of Military leaders and Chavista loyalists. Capital flight and a “brain drain” ensued, finally capped with currency controls instituted in Q1/2005. Once again, the mismanagement, inexperience, ineptitude, corruption and lack of maintenance in the Oil & Gas sector – responsible for 85% of export revenue – set the table for another decline in production and revenues.
The similarities between Venezuela “then & now” are clear – so are the stark differences. Expectations moving forward require the recognition of a “new reality”: a country void of technical experience, competent general contractors, heavy machinery, materials and social stability. For the next several years, direct investment in Venezuela won’t be for the faint of heart, while the upside could be strong and sustained for decades.
Demand for the human capital required to competently manage the massive slate of projects will far exceed short-term supply. In my view it is naïve to expect educated and experienced Venezuelans in exile to return in large numbers, at least not quickly. Plan Pais*, a Venezuelan Exile’s think-tank based in the United States, estimates only twenty percent (or less) would consider such a commitment. They would have to see an indisputable level of national unity, reconciliation and public safety to consider repatriation. An influx of Ex-Patriot talent will be required for a minimum of several years.
Painting an accurate picture of what Venezuela will be initially must include known current challenges and expected conditions on the ground based on experience – including, but not limited to the following:
- Humanitarian Relief – immediate needs to be addressed by Governments and NGO’s while economic reconstruction is simultaneously planned and executed – expect many private businesses coming into Venezuela to include staff for community outreach and quasi-NGO activities
- Original Equipment Manufacturers (OEM) and Dealer Networks – international companies complete with physical presence to support the rebuild of Venezuela – example: Caterpillar currently has no in-country representation as their long-standing Dealer Agreement with Venequip, was recently voided – expect a boom of new machinery imports, all types
- Offshore Service Support & Equipment Sourcing – due to the mass exodus of Venezuelan contractors and support business in the 2003-2006 time-frame, “outsourcing” with USA-based (and other international) businesses will have representatives deployed to manage local administration & logistics serving heavy industry and others using their products – expect massive imports beginning with second-hand machinery of all types
- Engineering, Procurement & Construction (EPC) Contractors – as with the “Apertura Petrolera”, large contractors (complete with equipment fleets) will be required to execute the construction of facilities in all sectors: Oil & Gas, Mining, Agriculture, Water Systems, Power Generation, Health Services, Education, etc – long-term operating contracts with guarantees will be required to mitigate risk and entice investment
- Oil & Gas Exploration and Production – international companies will arrive in droves to bid on long-term contracts in this industry and other infrastructure projects – natural resource wealth will serve as collateral for direct foreign investment, crafted with financial instruments to guarantee performance of all parties
- Dollarization of Economy – happening now (by necessity) and likely to become an interim policy for the transitional government, remaining until economic stability is achieved
- Security, Public Safety & Bad Actors – upon regime change Nicolas Maduro, top level political cronies, Venezuelan military brass and security forces, Cuban influencers will depart, be taken into custody and/or fracture into formidable elements bent on survival until they are dealt with depending on agreements, reconciliation attempts and public sentiment. Under Hugo Chavez, many private businesses were expropriated and handed over to military brass, thereby politicizing the armed forces and empowering leaders to manage graft and their own enrichment – Colectivos, Cuban-style civil obedience enforcer groups will be disbanded and disarmed – Colombian guerilla groups (FARC) operating in Western Venezuela on the Colombia Border and (ELN) profiteering via wildcat gold mining mainly in Eastern Bolivar State, likely dealt with via limited military incursion
- Military Rank & File – lower level officers and their subordinates will be needed in restructuring the National Guard and Security Forces loyal to the transitional and future governments – prior to the ascension of Hugo Chavez, the armed forces were a neutral body, expect a future Constitution to restore that status
- Socio-Economic Inequality – fighting corruption and inequality (not socialism) were the principal planks of Hugo Chavez’s original campaign in 1998: a winning message resonating with the vast-majority of the population, desperate for relief from the scourge of corruption and perpetual relegation into poverty – no solution can be considered “long-term” without addressing these issues in a way which instills confidence and trust within the disenfranchised
- Chavismo as a Political Force – Hugo Chavez was a charismatic phenomenon, and a logical human response to many decades of poor governance and disregard for the masses by the “connected elite”. To that end, Chavismo will never die in Venezuela because it represents “gained ground”, hope and true representation for those previously marginalized. Much like the FARC peace accord of 2016 in Colombia, a “reconciliation with reality” is required to lend legitimacy and empower the political voice of those who subscribe to the fairness principles of the Chavismo vision
- Culture of Corruption & Descension into Criminality – a sensitive issue in any country, but very real and thriving in Venezuela decades before the emergence of Hugo Chavez, the Socialist rhetoric and grandiose projects during the early years (perfect with abnormally elevated crude-oil prices) fueled even more opportunities for graft by cronies and a newly politicized military elite charged with managing confiscated private businesses. By the time President Chavez was diagnosed with pancreatic cancer (2011), he was already surrounded by a close-knit group of beneficiaries and enablers who were so entrenched and enriched via their corruption, there was no breaking their grip on power: enter Nicolas Maduro (2013). For the self-proclaimed “Son of Chavez”, hapless to prevent the downward spiral of institutionalized corruption & criminality, finding new revenue sources was a priority. In the last several years, wildcat gold mining, the drug trade and “refuge for protection” deals with Colombian rebel groups have provided much-needed cash flow, as have massive loans from China and Russia based on repayment via natural resources yet to be extracted. Ineptitude, greed and a willingness to remain in power “at all costs” has ensured a recovery cannot succeed under the Maduro regime, and led to US Sanctions (August) currently stifling all forms of trade and designed to force imminent change
- Crimes Against Humanity – repression and Human Rights abuses on a criminal scale have now been officially documented (July) by the United Nations OHCHR* – including 6,800 “resistance to authority” killings in 2018 alone – leaving many in the highest circles of power petrified of their likely fate and seeking to make eleventh-hour deals – when the boxes are checked for outside forces to take action in recovery of a failed State, this ranks highly
- Organization of America States & TIAR* – last week the OAS convened to discuss and approve the request of the Venezuela Interim-Government, led by Juan Guaido, to invoke the “Inter-American Treaty of Reciprocal Assistance”, allowing for military intervention into Venezuelan Territory – this does not mean it will happen, but now serves as another pressure point on the Maduro-Chavista regime. In my view Colombian Armed Forces will cross Venezuela’s Western Border (at some point) in pursuit of FARC guerillas who receive safe-haven there – current political rhetoric out of Colombia alludes to the threat
- Plan Pais & Institutional Change – identifying the need for rebuilding Venezuelan institutions across all sectors – public & private – this organization’s roadmap serves as the basis of public discourse by National Assembly Member & Interim President, Juan Guaido, and on behalf of Venezuela’s opposition government. The most contentious and complicated issue, without question, will be the reversal of private property and business confiscations, a common policy tool of the Chavez Regime in the 2002-2008 period
As I position my company to participate, lead and partner in reconstruction efforts, it’s critical we share relevant experience, cultural knowledge and recent events to assess opportunities and create realistic expectations. Contact me at your convenience to discuss your interest and how we may partner.
*Links and References –
Francisco Monaldi (Plan Pais event, Tampa, March 23rd) – https://youtu.be/zZ2ioUHQgds
Hiram Gaviria (Plan Pais event, Caracas, February 1st) – https://youtu.be/rCNbMPS2L7A
Washington Post (September 15th) – OAS Treaty Invoked https://www.washingtonpost.com/national-security/fears-of-military-conflict-between-venezuela-and-colombia-as-tensions-over-maduro-government-escalate/2019/09/15/c2a4ff88-d621-11e9-9610-fb56c5522e1c_story.html?noredirect=on
Bloomberg (August 2nd) – US Blockade/Quarantine – https://www.bloomberg.com/news/articles/2019-08-02/u-s-headed-toward-blockade-of-venezuela-trump-official-says?utm_campaign=socialflow-organic&utm_source=twitter&cmpid%3D=socialflow-twitter-politics&utm_medium=social&utm_content=politics
Wilbur Ross (August 1st) – US Commerce Secretary – https://www.reuters.com/article/us-usa-venezuela-reconstruction-idUSKCN1UR4GS
United Nations Human Rights Council, OHCHR Report (July 5th) – https://news.un.org/en/story/2019/07/1041902
Plan Pais – Tampa Event Summary (March 22nd – 23rd) – https://www.planpais.com/segmentos2019.html
Venezuela’s Future & Plan Pais
As we monitor the ongoing political power-struggle, humanitarian crisis and breakdown of basic public services, one thing is clear: Venezuela will require a massive rebuild of their government, financial and oil and gas sectors, transportation infrastructure, water systems, food production capabilities, among others. The Country’s “opposition in-exile” has developed a plan to remove the current government from power and address the complex array of challenges facing their population – the organization is “Plan Pais” and they have a conference here in Tampa, March 22-23, 2019 – take a look…
Website: https://www.planpais.com/
Wikipedia: https://en.wikipedia.org/wiki/Plan_País
Facebook: https://www.facebook.com/planpais
While Plan Pais has existed as an organization since 2011, “Interim President” Juan Guaidó brought it to the fore in late-January, and, addressed staff and supporters at a Plan Pais news conference in Caracas on February 1, 2019. Mr Guaido references the strategies of the organization regularly in his public speeches with thoughtful detail, while self-exiled Venezuelans manage international support from the United States and dozens more Nations around the world.
Notwithstanding recent events, change will come, and soon Venezuelans will be faced with a “complete rebuild” of their economy and social structures as they navigate the “undoing” of twenty years of administrative mismanagement under the Chavez & Maduro regimes. Prior to the Plan Pais news conference in Caracas (February 1st) a reporter interviewed Hiram Gaviria, National Assembly member and career agronomist. Explaining the critical need to reconstruct Venezuela’s ability to feed its population, Mr Gaviria stated the estimated requirement for agricultural equipment in Venezuela to be US$5Billion annually for the next 5-8 years (https://youtu.be/rCNbMPS2L7A). Expect that budget to be multiplied many times over in both the Oil & Gas and Transportation Infrastructure sectors.
Mister Maquinaria will be represented at the Tampa conference this week and seeks discussion with global partners who recognize this unique opportunity to take part in the stabilization, recovery and expansion of the Venezuela society and economic engines. Having lived, worked and married in Venezuela (1996 – 2002), I am keen to be a part of the reconstruction of the Country specific to my experience in the oil and gas sector, transportation infrastructure, and other sectors based on priorities established by Plan Pais. Please contact me with interest and let’s have a chat!
Construction Equipment Outlook 2019 – North America & Export
Industry news has been conflicted regarding the economic outlook for 2019. As a company who is in the “trenches” daily working with industry leaders and equipment users worldwide, we believe there is a significant need to reestablish export channels into reliable secondary markets outside North America. Over the last several months OEM Dealers, Trade Association Members and other owners have increasingly expressed concern over their limited options for expected and orderly liquidation of equipment inventories.
Starting the 2019 New Year with the effects of increased Federal Reserve rates, the nuisance of a “Trade War cloud” and record partial shutdown of the US Government: this year is unique to say the least. The United States GDP annual growth through Q3/2018 was 3.5% and reflected a red-hot construction market widely believed to be unsustainable going back to last summer. Currently, most financial analysts anticipate a pullback this year, nuanced by volatility of consumer confidence and continued uniformity of the pessimism regarding the United States and broader world economy. We agree, believe the US Economy has strong fundamentals and anticipate a soft-landing into a 2.0-2.5% GDP growth range.
The Construction Equipment industry is a leading economic indicator and much has changed since the “malaise of 2007-2011” brought on by a collapse of the US housing market – but much has also remained the same, mainly options. Secondary markets for used construction and earthmoving equipment continue to be limited to the domestic playing field, mainly due to the expensive & cumbersome bureaucracy of modifying Tier IV machines (engines) for export and use internationally with locally available fuels. The “world region model” that characterizes current OEM behavior does not lend to changes, and manufacturers won’t purposely enable their North American Dealers to engage in this activity. Void of the historical “safety valve” for exportation of used machinery into Latin America/Caribbean, Africa, the Middle East and elsewhere – owners have a looming problem.
Some aggressive OEM & Independent Dealers are actively fortifying their capability for international trade via acquisition of non-EPA Compliant machines (Tier II, III) from other regions, shipping them to Free Trade Zones (FTZ) within the USA with intent to resell internationally. These players are setting themselves up for future throughput by ensuring their export sales activities are adequately staffed, supported and ready for an increase in business. In lieu of “de-tiering”, they are currently playing the only game available to them as OEM Dealers
Ritchie Bros Auctioneers (RBA), an industry bell-weather, covered 2018 sales targets domestically due to a strong US economy. We expect their marquee event next month in Orlando will marginally eclipse the record-setting US$278MM of a year ago, which was their first February event post-acquisition of “IronPlanet”. As a market-maker, RBA has yet to introduce a solution for Tier IV (interim, final) machinery being refitted for export, and thus, shares the experience and consequences of limited international trade in their core asset group.
Meanwhile, our industry continues to suffer as existing trade platforms remain outdated, fragmented and generally inefficient compared to other industries. Fee-based tools and websites which emulate and facilitate age-old behaviors have taken some shallow roots, but it’s not enough. End-users need complete platforms which simplify direct involvement and control in the trade of their equipment (usually their largest single capital expense) at a reduced cost. Expect “new players” to emerge, challenge and compete in the sale of quality used equipment currently being relegated to local brokers, auction houses, and via trade-ins on the sale of new machinery – options which relinquish significant value as owners do not perceive better solutions.
The next phase of our economic cycle will be the first real observance of a market dominated by Tier IV machines entering secondary markets in North America. We anticipate equipment owners will seek solutions in a new landscape which include an international component. The low-hanging fruit are machines produced prior to 2012, or, “pre-Tier IV” machines, which generally require no engine modifications for use overseas. Tier III machines (2007-2011) are perpetually in high demand in a very diverse international market, as are the Tier II predecessors. With our first-hand experience in the “de-tier for export” process at the OEM level (CAT, Volvo), we are increasingly being approached for discussion by organizations throughout the industry. Necessity is the “Mother of Invention” on the “de-tier for export” front, and solutions outside the OEM channel do exist.
To learn more about our export and other services click here
Venezuela’s “Tsunami Politico”
A seismic-shift is underway in Venezuela, with myriad implications worldwide. This is “Cuba on steroids”, with the titanic exception of a population “who once had everything” in a globally connected society, then “lost everything” under exceptionally poor governance, all while continuing to preside over unparalleled concentrations of natural resource wealth.
For those who understand the culture, society and follow events in Venezuela, the current situation and accelerated demise of President Maduro’s “Chavista” regime has a ring of finality – an overdue outcome to witness, study and document. Venezuela’s “next government” and entire Western Hemisphere, must have a cohesive plan moving forward. It appears the early chapters of transition were already written, now playing out coinciding with significant historical, recent & upcoming events:
· January 5th – Juan Guaidó chosen to lead the Venezuela National Assembly, an elected body widely recognized as the only remaining entity with a mandate from the people
· January 10th – President Maduro’s inauguration for a second, six-year term based on a rigged-election in May 2018, and boycotted by the opposition
· January 23rd – mass demonstrations across the Country and embassies around the world to coincide with this date in 1958 when a civilian-military movement overthrew the government of the Country’s last dictator, General Marcos Pérez Jiménez
· January 23rd – Caracas, Juan Guaidó, speaking to tens of thousands of supporters at the main opposition rally, declares himself “acting” President of Venezuela (referencing a clause in the current Constitution to legitimize the action) – his claim quickly recognized by the Organization of American States (OAS) and several governments, including Argentina, Brazil, Canada, Colombia, Ecuador, Peru and United States
· January 23rd – President Maduro (now disputed) announces cutting diplomatic ties with the United States: all embassy personnel ordered to leave within 72 hours; subsequently, “acting” President Juan Guaidó requests the United States diplomatic mission remain in the Country
· January 26th – deadline looms per “disputed” President Maduro’s call for all United States diplomatic personnel to depart Venezuela
· February 2nd – in eight days-time, the 20th anniversary of the first Inauguration of President Hugo Chavez – for “Chavistas” and opposition followers, a significant date
It is clear Venezuela’s “opposition in-exile” had a plan developed to remove the current government from power, finally set in-play by a convergence of events favorable for launch. Today, confrontations loom as “acting President” Juan Guaidó has stated “demonstrations and rallies will continue until liberty is achieved”. The current situation is complex but not surprising – if scripted, a compelling end to the “Chavista Era” would culminate with Nicolas Maduro standing down at the recommendation of the Armed Forces, “acting President” Juan Guaidó addressing the nation on February 2nd, calling for national peace and reconciliation, detailing the structure and actions of his transitional government, addressing the current humanitarian crisis, plan to stabilize the economy, and announcing a firm date for fresh elections later this year. The appearance of a democratic path for a peaceful transition per the Venezuelan Constitution has allowed increased international pressure which, in my view, will become overwhelming for the Maduro Regime.
President Maduro must have received the message that violent suppression of opposition dissidents at his direction, or otherwise on his watch, would bring dire consequences to himself and his “Chavista” cronies. In fact, the International Criminal Court (ICC), has a pending request by six neighboring Countries to initiate an investigation on crimes against humanity allegedly committed in the territory of Venezuela since February 12, 2014. The rank and file of Venezuela’s Armed Forces have no stomach for committing atrocities domestically, nor defending “La Patria” from regional military forces (supported by the United States) whose abilities dwarf their own experience, competency and power. Colombia comes to mind, Venezuela’s neighbor to the West and “cultural sister”, as a Peace-Keeper of good will.
Nicolas Maduro – uncharismatic, weak, inept – was always a strawman for the corrupt political beneficiaries enabled and entrenched by Hugo Chavez. The legacy and cohesion sustained under Chavez died with him in March 2013, and the fuse lit for the regime’s eventual demise.
Regardless of imminent events, change will come, and soon Venezuelans will be faced with a “complete rebuild” of their economy and social structures as they navigate the “undoing” of twenty years of administrative mismanagement, squandering of natural resources, embezzlement, fascism, thuggery and corruption. Having lived in Venezuela “before-during-after” Hugo Chavez’s ascension to power, my experience suggests there will be a powerful and admirable effort on the part of those who remained behind (a majority with no other choice) and those who fled & return quickly, to work for peace and reconciliation. National unity is another matter, a longer-term goal that is required before many others who departed – Venezuelan Nationals, business partners, etc – will feel secure enough to return.
3-2-1…Lift-off for “Mister Maquinaria”
As a “Space Race Brat” born to Parents who lived in Brevard County, Florida & were employed in the Space Industry fresh out of high school (late-1950’s), those insightful parental tech nerds made it my business to engage and leverage technology from an early age (see photo at Pad 39A and Apollo 11, I’m in red). In hindsight, the habitual application of technology has been a fruitful gift.
While Technology, the Digital Age & Social Media have changed most aspects of life as we know it, the construction equipment industry is a prime example of “old habits dying hard”, when secondary markets and participant behavior are considered. The current landscape is painted with auction houses, dealer-to-dealer networks, antiquated websites, poor marketing platforms and even locals attempting to DIY on Craigslist – as with the “late adopters” of the Space Race, the current state of our equipment industry demonstrates collectively we are some of the last to understand it and use it to it’s full potential.
The fact is, most equipment owners/users are not equipped to manage the marketing and sale of their used iron – they wisely invest their time in estimating, bidding, winning and executing projects, as it should be: but something is missing. At the end of the efficient life of machinery it is common to accept low trade values, sell machines to intermediaries and auctions: all paying/netting typically 65-80 cents on the retail dollar. The lack of in-house staff and supporting network charged with creating increased net worth for machinery assets affects competitiveness for contractors and other owners/end-users.
Mister Maquinaria has now “gone live” with our website and set to leverage the power of our global database for email marketing, extensive use of digital and social media platforms & iPhones that have more computer power than Apollo 11 when it launched in July 1969.
Contact us at your convenience to discuss your specific needs – let’s launch a partnership to increase returns on your equipment!
Ritchie Bros Orlando sets records across the board in February
The final result: US$278 Million in gross auction sales, all unreserved – Ritchie Bros Auctioneers did it again and set market values across 12,500 lots of construction equipment over six days.
As expected late-model, low-hour gear was in high demand for domestic end-user’s as the US Economy remains strong – sellers have the advantage in the marketplace on all platforms as supply is squeezed.
Latin American, Caribbean and other International players showed a resurgence of this buyer-base, swarming the Tier III gear, rarely being outbid during the week.
Ritchie Bros has some tweaks to make – it comes with the territory – but considering the impact last year’s acquisition of Iron Planet had on sale volume they pulled it off well, congratulations on a great event!
Mister Maquinaria is ready to assist international buyers in locating and purchasing the machinery from reliable sources in the USA – contact us and let’s talk machinery and exporting!
Ritchie Bros Orlando taking it to the next level after IronPlanet acquisition
Three weeks ago we were onsite checking out the iron and the gross sale estimate was $195MM, now that’s been obliterated with the latest estimate rolling in above $275MM – apparently RBA & IronPlanet are “Better Together” as the early media tagline suggested. If the primary goal is volume then this should be no surprise, be ready to reset your marks as the previous high was $203MM in 2012.
Who will be there and what should we monitor to better understand our market?
Late-model, low-hour gear will serve to quench the domestic end-user’s appetite as the US Economy remains hot, providing sellers the power position in the marketplace. We believe prices will be retail (as is typical) and the spectacle of the environment will certainly provide some bidding behavior of note.
Expect to see Latin American, Caribbean and other International Buyers swarming the pre-Tier IV gear, rarely being outbid: a resurgence of this buyer-base.
During the sale and after the dust settles a hot topic will be the simultaneous sale of iron sold “as-is” with descriptions on the RBA Orlando Yard versus the online offerings of remote equipment complete with IP-style inspections. Suffice to say Ritchie Bros will intensely monitor the results, attitude of their clients and trends – as will we.
Look for Mister Maquinaria staff all week and let’s talk machinery and exporting!
Mining Rebuilds: CAT 789 Trucks – Chile to Tampa to Australia
Securing the deal to rebuild 6 x CAT 789, 240-Ton Capacity Mining Trucks several years ago was a satisfying professional experience – to date these remain the largest machines ever rebuilt by Ring Power CAT. Freight from the BHP Mine in Chile was expertly handled by an experienced logistics group, leaving the beds behind – rebuilds from the frame-up across all units were complete in about five months after some change orders – they sold to Queensland, Australia in Q2/2012 – let’s do that again starting with mining components!