Renting worldwide

25 June 2018


Sotiris Kanaris visits Hovago’s headquarters in Dordrecht, the Netherlands, and interviews general manager Marcel Riemslag about the bare rental model, the business and the market.

Hovago, founded in 1946, is a member of the ProDelta Group and specialises in the international rental and trade of mobile cranes. Its current worldwide fleet amounts to nearly 250 mobile cranes—all terrains, rough terrains and large crawler cranes—that the company offers bare rental of.

In bare rental, the customer has full responsibility for the operation, regular maintenance, insurance, consumables, and any other normal operating costs. “We just provide the crane,” explains Riemslag simply.

He adds that bare rental has many advantages: “Customers are adding cranes to their fleet without adding them to their books. It gives them the chance to have a new crane in their fleet, as we buy a lot of new cranes every year.”

Riemslag says that sometimes customers come to Hovago when they need a crane immediately and the factory doesn’t have it available for a number of months.

Hovago offers a purchase option (RPO) after 12-24 months, under which part of the rental fee paid by the customer gets deducted from the purchase price.

“It means you build up some equity,” says Riemslag, adding that 85-90% of cranes are bought by the customer exercising their purchase option rights.

“We do this with ATs from 100- 750t. We also offer it for rough terrain cranes — of which the biggest is the Tadano three-axle model [the 160USt GR-1600XL]— and crawler cranes up to 1,250t.”

Having sent cranes all over the world, risk assessment is extremely important for Hovago. Riemslag says if they are approached by a company in a market where they have not done business in the past, they look at all financial but also legal aspects. Property protection has a high priority. The three pillars of democracy—legislature, executive, judiciary—are studied. “We start with the basic ‘how is the law, is it on the side of the owner of the equipment?’”

In terms of delivery, Hovago prepares a packing list and rates in collaboration with shipping agents, but customers can choose other methods if they prefer.

Riemslag says that proximity is not necessarily correlated to ease of delivery. “Shipping a crane to Houston is much easier than trucking a crane to Switzerland.

In Switzerland you need for every truck a special paper for temporary movement, multiple times more paperwork than other countries.”

He highlights the challenges of moving a crane within Europe: “Road transport is getting worse.

At the ESTA it is a continuous subject of study. If we want a crane delivered from Germany, sometimes we have to wait four weeks for a permit for it to be able to drive on the road to Holland. If you need to bring a crane through Belgium you need a permit, to send a crane to France sometimes you need to wait six weeks for a permit. In Holland you don’t need any permits for a six-axle crane but in Belgium you will be stopped and fined. It would be nice if the rules were harmonized.”

At Hovago they have recognized an increased demand for telecrawlers. “After a slow start they are getting more and more popular; we currently have nine in our fleet. It is mainly because of the wind industry,” says Riemslag.

“In the US and Canada, the bigger rough terrain cranes— like the 160t Tadano three-axle RT— are very popular. Five years ago, a 70t rough terrain was considered a big crane, now they reach 160USt.

The demand for these cranes was initially generated by the oil and gas industry, but now it has spread to other applications.”

Riemslag is optimistic about the next few years. He says the construction industry is recovering and the wind industry is here to stay. The business model of the company demands the identification of future trends in order for the company to order new cranes.

“We have to monitor the developments in the world continuously—what is required, what will be the needs for next year. There is a constant flow of information from manufacturers and customers. A couple of times a year we decide how we need to expand our fleet in the next period or year. We already placed large orders for 2019 with OEMs.”

At Hovago they are committed to maintain the quality of the service they have been providing for more than 70 years to customers around the world.

A Terex CC3800 from Hovago’s fleet
Technical operations manager at Hovago Paul Straps (left) and general manager Marcel Riemslag (right)
A Liebherr LTR 1220 from Hovago’s fleet