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!
Tier III machines expected to hit USA Resale Market in 2018
It’s been several years since we’ve seen Tier III & older legacy machines on the US Resale Market in a big way, I see that changing in 2018. Contrary to what many believe, the US Export Market is not dead, it simply took an extended break due to supply issues, not a decrease in demand. Historical buyers found machines to import from other regions (mainly Tier II & III units from Asia) in lieu of their traditional US-based sources.
Tier III units in the US market produced/delivered between 2008 – 2012 will represent the bulk of this export opportunity. In my view the upcoming market will offer a large volume of this iron (trades, fleet buys, etc) beginning in Q1 2018 and extending a few years as significant inventories tap-out: it is a finite resource. Most “post-recession end-users” who held Tier III machines in lieu of purchasing Tier IV-interim machines in the 2011-2014 time-frame will move forward and out of those aged, higher-hour units as confidence in the United States Economy propels new machine sales.
For makes/models with historical overseas market acceptance, “pre-Tier IV machines” will again flow into the Latin American region and other parts of the world. Having a relationship with an experienced, bilingual/fluent and seamless connection to those customers will be crucial in capitalizing on this opportunity. Social Media & more contemporary Marketing Solutions will commonly be used alongside classic Email Marketing Campaigns. Overall 2018 should be a good year for US Machinery Exports and the annual milestone February Auctions in Orlando are just around the corner as a measure, stay tuned…Prospero Año Nuevo!
Exported: Volvo L350F arrives in Brazil
This Volvo L350F spent it’s “first life” in a Bio-Fuel operation in the Deep South, one of three (3) equipped with Wicker Logging Grapples: all over 16,000 hours. We took them in-trade, sold the first to another USA-based Dealer and the remaining two (2) units to this Brazilian customer who owns several quarries, produces huge granite slabs, polishes, preps and containerizes for export worldwide – one source for your fine granite countertops!
Volvo EC340DL De Tiering
Turks & Caicos (Summer 2016) – It’s brutally hot most summer days and sometimes unbearably humid in the Islands of the Caribbean, but the perpetual challenge for builders/developers is lack of dealer support on this outlying archipelago. While the dealer in the Dominican Republic was the “dealer of record” for this Island Nation, they have no brick and mortar operations there, and no Service Techs with VISA’s to enter the Country: we stepped in and filled the void.
Our customer needed to acquire a late-model machine to fulfill their dire need of a 30+ Metric-Ton excavator – we provided this Volvo EC340DL (Tie IV-interim) and the support required to ensure it would function as intended, thus our first “de-tiering” project was slated and planned.
The mechanical work was fairly simple, approximately five (5) hours by an experienced Service Technician: partial removal of original ex-factory emissions equipment, install of replacement parts, documenting the process, etc.
The process was only complicated by some on-site broadband and cell coverage issues, which were expertly managed and overcome by our team. Reprogramming of the ECU was then an easy final task.
One year on this “de-tiered” hydraulic excavator is working as intended and meeting the needs of our customer with no reported incidents…who’s next?
USA Lease Returns – Tier IV-interim
A rare buying opportunity is currently available with Lease Returns in the USA. In the past few years many contractors have elected to take advantage of the attractive leasing options offered by manufacturers and dealers all over the Country. As leases reach their end large volumes of machinery are coming available each month in the USA.
Inherently these lease return machines are Tier IV-interim and prices are depressed across all makes and models, presenting overseas buyers with an excellent opportunity to “De-Tier” these machines and the glut in the USA market. In my opinion the best-case scenario is exportation of such units to overseas markets needing good quality machinery at reduced pricing.
It is clear some customers are taking advantage as we have seen examples of contractors from Mexico, Central and South America obtaining machines through various sources, “de-tiering” and putting them to use alongside other machines acquired through dealer channels.
We are interested in hearing about your experience, that of fellow contractors in your Country and interest in this relatively easy process. Let’s begin the discussion!
De-Tiering Tier IV-interim Machines for Export – the Best of the Bunch
The Issue – Having experienced the arrival and implications of Tier IV-interim engines in the USA market I can tell you it’s been a game changer! Several years ago this was a conceptual discussion and today it is reality as used inventories across all makes and models become an issue for dealers, their rental fleets and contractors who purchased this machinery between 2010 – 2014. The historic flow of used construction equipment from USA-based fleets to owners mainly in Latin America and Africa has all but halted as weary international buyers avoid late-model Tier IV-interim machines with emissions equipment and require special low-Sulphur fuel.
The Solution: Conversion and Export – the best way to resolve the issue of bloated inventories is to convert Tier IV-Interim machines by removing the emissions equipment, reprogramming on-board computers and making them ready for use in traditional USA markets.
The best solution I have seen to date comes from Volvo and involves the complete removal of all emissions equipment “downstream” of the turbo, plugging the appropriate holes, installing a traditional muffler/exhaust pipe and finally, re-programming the computer to “tell” the engine it is now a “Tier Zero” capable of utilizing diesel fuels available in international markets. Why is this the best I have seen to date? In short because after conversion, the machines will “look and feel” like the same models being delivered to those markets by local dealers. Anything else would be met with skepticism and angst by mechanics on the ground. Currently Volvo promotes the conversion being performed by Volvo Dealers in the country of destination and use…for that matter, all manufacturers have the same message as they navigate the waters of compliance with EPA guidelines versus a strong desire to reconstruct the historic flow of used equipment out of the USA market.
Other manufacturers are not as focused on finding a solution as far as we can tell. Brands like Caterpillar and John Deere are staunch advocates of keeping dealers focused on “in-channel” solutions. Caterpillar in particular does not promote any scenario whereby a USA Dealer would be involved in the sale and use of USA-based equipment to another market: in the eyes of Caterpillar that job is for CAT Used Equipment Services Inc (CUESI). This leaves the de-tiering of these other brands in the hands of independent shops, “after-market” kits, and lacks the critical software required to re-program onboard computers. In my view not sound options as they could compromise the functionality and performance of the equipment.
What You Need to Know When Acquiring Machinery
“Value” should replace “Price” when it comes to acquiring machinery, here is what astute buyers should consider
- Original Quality – machinery which is built to last and well-designed on many levels is optimal. Aside from ease of maintenance, parts availability and dealer support – one major factor should be operator comfort – ergonomics – which serves owners well without increased production and a machine likely to be maintained well by a content operator.
- Acquisition Costs – the initial purchase price, delivery logistics and nationalization costs all factor when buying a machine for import into your Country. While currency exchange rates and local economic issues also play a role, buying assets when the “market of origin” offers special deals is key: be flexible and study the source economy and availability machines with your trusted source
- Intent and Use – The working application and expected hours the buyer will use the machine is critical when making intelligent choices. Machines of lesser “original quality” may be the best decision and justification for an owner who will use the machine sporadically. Conversely, a project or application implying high-usage in a production environment calls for a solid machine with a reputation for “uptime”
- Fuel Economy – on a daily basis owners observe and manage fuel and operating costs. Machines which use less fuel for the same work when compared to competitive models demonstrate quickly why upgrading to a more fuel efficient machine should always be a consideration. Many owners never consider that fuel economy can vary greatly. Research will show is does: the daily costs of fuel and even the act of refueling a machine in a production environment will affect overall productivity.
Considering these four components when researching machinery with assure the best value when your acquisition is made!
The ABC’s of Acquiring and Importing Heavy Equipment
For many contractors and other users of heavy earthmoving equipment, the prospect of acquiring a machine from a trusted source and importing into their country is a daunting task. Many customers choose to leave that to brokers domiciled in their own country or more broadly to third-parties in the USA where the machinery originates. This process of importing heavy equipment is not as cumbersome as one may believe and “doing it yourself” with the assistance of experienced professionals will usually garner a better value for the end-user. Here is what you should know when it comes to acquiring and importing heavy equipment:
- A) Quoting and Acquisition – while there are many sources it is my experience that buying used equipment from an authorized dealer rental fleet should be the first choice. These machines are generally maintained per factory specifications by such dealers and offer quality machinery with good maintenance history, documented. Whether one deals directly with a dealer or via a trusted USA-based broker, rental fleet units are generally superior to other machines in the marketplace or advertised on the internet and via other media.
- B) Freight Forwarding – to manage the transport of equipment from your “port of embarkation” or, “where it departs the USA” to the chosen port of entry in your country where machines will be put to work, the network of proficient agents is substantial. These “freight forwarders” have the expertise to manage the logistics, clear US Customs and even perform the same functions within your country and to your jobsite or final destination. Using established freight forwarders knowledgeable in importing heavy equipment is recommended in order to avoid pitfalls which may cause delays in delivery and spending more money on this process. I have some recommendations based on a long history of superior service and performance. Concord International, Energy Systems and Hansen Shipping are three companies I feel confident referring
- C) Customs Brokerage – handling the intricacies of “nationalization” and associated tasks for importing heavy equipment into your Country should be performed by local firms as they are much more familiar with administrative process and more agile when working through potential obstacles. It is common for freight forwarding and customs brokerage activities to be managed by one organization, this is the preferred provider; a firm which has an office and local personnel doing the job.
I believe that empowering buyers to manage their own search, acquisition and delivery of equipment is the next step in the natural evolution within our industry, and I am here to assist.