Rough trough

If you work in any part of the crane industry, you do not need to pick up Cranes Today to learn that demand for new cranes of all types has substantially collapsed. The financial meltdown that began with the subprime mortgage crisis in the USA in 2007 turned global in the last quarter of 2008. Few industries anywhere in the world have remained immune. And yet, the official crane industry statistics for crane deliveries have so far held up remarkably well. Behind these numbers, however, lays a rather more complex story.

The world market for new rough terrain cranes in 2007 was close to 5,900. Actual demand was, of course, even higher than this. Manufacturers were unable to meet demand. Distributors, facing rationing, inflated their orders yet higher. Backlogs reached record levels. Manufacturers raised their game with production expansion and efficiencies.

In 2008 sales of new rough terrains rose over 20% to more than 7,100 units. This figure would have been even higher, but for a slight fall in demand in Japan, where sales fell in the region of 1%. In North America unit sales were up by more than 35%; in Europe (a significantly smaller market for RTs) they were up by more than 40%; for the rest of the world the increase in 2008 was more than 20%.

Even into the first quarter of 2009, deliveries were still continuing at a steady pace as manufacturers continued to clear their order backlogs, despite many orders being cancelled.

What these numbers do not reveal, however, is the sudden and severe fall in new orders being placed. Deliveries may continue for the time being, but with new orders drying up in the fourth quarter of 2008, the sales figures are heading for a severe downturn.

One 40-year veteran of the crane industry, a sales director with a leading manufacturer, says this is the worst downturn he has ever experienced, because this time it has occurred simultaneously worldwide: “There’s just inventory everywhere,” he says. Orders will not pick up again until this inventory is cleared, he says, which will require rental utilisation to return to its record highs of recent years.

Some manufacturers hold their distributors to previously placed orders; others are more flexible over cancellations, not wishing to put them out of business. When the US market began to fall, US distributors were initially able to sell their stock overseas. Now there is no demand anywhere for them to exploit and iron is piling up in the yards of distributors and rental companies alike.

In response, manufacturers have begun slowing down output, with layoffs and temporary plant closures. Terex’s plant in Waverly, Iowa, for example announced 150 redundancies in January, followed by a further 114 in May, as well as shutdowns from 18 May to 19 June and from 3-7 August.

Rick Curnutte, Link-Belt’s manager for telescopic boom cranes, says, “We currently estimate the market will be down by roughly 50% from 2008 taking us back to levels seen around 2005.

“You’ve got to first put the 2008 rough terrain market in perspective; it hit record levels not seen for nearly 25 years. In fact, the entire North American market saw unprecedented growth each year from 2004.”

There are pockets of light within the gloom. “We are actually OK,” a Grove distributor in the USA reports. “There is a lot of dealer inventory out there. Our [rental] utilisation is off of what it has been, but we are not way over-stocked. We are seeing some activity. We are actually optimistic that we may have hit the bottom and there may be light at the end of the tunnel.”

He adds that although rental rates are down 15%, the prices of both new and used cranes have held up “better than I personally would have expected”. Of new cranes, he says, “There was a 2009 price increase we realised from the manufacturers. I know that we’ve seen some manufacturers that probably have reduced some prices, but overall they are not generally down. Used prices are softening a bit because of the increased inventory, but if you look at the auction results it looks like they have held up.”

Certainly life has changed for crane sales personnel this year. Where previously it was a case of sit back and answer the phone, assuming there was anything left available to sell, today “we have to go after each deal more aggressively than we did a year ago,” the Grove distributor says.

Curnutte says, “The demand for the cranes is still out there, the problem is that construction projects cannot get the financial backing needed. The wind energy business is still active although reduced from 2008 levels and the petroleum and chemical businesses remain relatively strong.”

Curnutte is another optimist. “The American Recovery and Reinvestment Act of 2009 should ease the flow of capital to the wind power sector. The combination of this and the National Highway Bridge Reconstruction and Inspection Act should be a boost for the lift business, especially for rough terrain, lattice crawler and even telescopic crawler cranes,” he says. “Just consider the fact that over 74,000 bridges in the United States are classified as structurally deficient. It’s going to take a considerable amount of time and resources to get these bridges back to the appropriate classification.”

Neil Hollingshead, Manitowoc product manager for telescopic boom mobile cranes, confirms, “Overall there has definitely been a drop [in demand], but demand for larger cranes is holding up better.”

In North America the focus of recent product development has been on these high capacity machines. Terex will soon follow its its RT 1120 (120USt) with a new 130USt rough terrain, matching the capacity of Grove’s largest model, the RT 9130E and Link-Belt’s new RTC-80130 Series II.

Terex’s RT 1120 and RT 1130 both have the same base carrier but the new model has a new US-made boom. Terex said, “An example of customer needs for higher capacities are with the RT crane product offering. There are certain applications within the wind turbine and bridge building industries that benefit from these higher capacities for lifting.”

The new crane will feature a 155ft fully hydraulic synchronous main boom, with a 55ft swingaway jib, capable of being offset at 0°, 20° and 40°.

Link-Belt officially launched its RTC-80130 Series II at the ConExpo exhibition in Las Vegas last year, although deliveries are only beginning in the second half of this year. “We already have solid orders for the entire 2009 production run and we will begin accepting 2010 orders soon,” says Curnutte.

The most obvious differentiating feature of this machine is that it has three axles, like the slightly smaller 100USt class RTC-80100 Series II. Curnutte says, “The greatest benefit of the three axle configuration is that it allows the overall height to stay under federal height mandates for highway transport. Like the RTC-80100 Series II, the RTC-80130 Series II transports without removing the tyres. The competition can’t make this claim. The payback to the customer is less setup and tear-down time.”

Both of Link-Belt’s three-axle RTs use hydrostatic drives. “The benefits are better maneuverability and reduced overall height.”

The RTC-80130 Series II has a pick-and-carry capacity of 44USt (40t) with the boom over the front. The five-section boom was co-developed for the RTC-80130 Series II and HTC-3140 truck crane.

While Link-Belt has had success pioneering the three-axle RT, Tadano has now gone one further. Unlike most countries, rough terrain cranes in Japan can actually travel on public roads, under certain conditions. Specifically for its domestic Japanese market, Tadano has introduced a new four-axle RT, the 60t capacity Crevo 700, which travels at 49km/h. Crane owners require permits for moving heavy vehicles and loads over certain roads and bridges. Having four axles instead of two reduces axle loadings by nearly 50% less than other cranes in Tadano’s range, which enables owners of this model to obtain travelling permits for driving routes that would otherwise be closed to them.

Although it has four axles, the Crevo 700 is just 500mm longer overall, at 12.815m, than Tadano’s other two-axle cranes in the 60t category, and with an overall width of just 2.78m, it is actually narrower than some two-axle RTs in this class.

Aside from the number of axles, another key feature of the new Tadano is the new “SACO” (standing for safety and compact) jib concept. The swingaround jib pins to the underside of the boom rather than at top and bottom. The lower position of the connecting pins removes the need to work at height, Tadano says, and also aids setting up on sites where space is restricted. The jib is then raised and offset hydraulically. The six-section U-shaped boom extends from 9.8m to 44m, while the jib offers an extra 8m to 12.7m of reach, to give a maximum tip height of 58m.

Compared to the Americas and Asia, Europe is not a big market for rough terrain cranes. The exceptions are Italy and, to a lesser extent, France, though it is never clear how many of the RTs sold in these countries actually spend their working lives there, because a significant proportion are taken by contractors and/or rental companies overseas, notably to North Africa and the Middle East.

Italy is a traditional manufacturing base for RTs, where Locatelli, Bendini (part of the Terex group since 1995, and now operating purely under the Terex Cranes brand) and Autogru Rigo are well established. Rigo’s presence in this market has now gone, however. The company was effectively taken over by Kato of Japan in 2007 and became Euro Rigo. Then in November 2008 the global recession prompted Kato to retrench and close its new European production base. Daniele Rigo, who was export manager for Autogru Rigo, says that the original family owners have a three-year non-compete clause to observe. At the moment, therefore, “Autogru Rigo is no longer a manufacturer of cranes; we sold the manufacturing rights and R&D department to Kato,” he says. Once the non-compete agreement expires next year, will Rigo get back in the game? “Who knows?” Daniele Rigo responds, suggesting that the current state of the market does not make it the most exciting prospect to think about just yet.

Locatelli, on the other hand, continues not only producing RTs but bringing out new products. Visitors to the Intermat show in Paris will no doubt have seen the company’s new GRIL 8500TL, the only new rough terrain crane at the exhibition. The significant difference between this model and the older GRIL 8500T from Locatelli, both of which are rated at 50t capacity, is that the new version has a longer boom (with TL standing for “telescopic long”). While the older version has a four-section 10.1m to 32m main boom and a maximum height under hook of 34.5m, the new TL version has a five-section main boom that extends full power, and partially synchronized, from 9.47m to 37.23m. Maximum height under hook is 40m.

Other new features on the GRIL 8500TL include a reclining cab for optimum visibility and ergonomic comfort and a new automatic outrigger control system, which Locatelli says eliminates the possibility of human error in setting up. The crane’s electronic system can also integrate a global positioning system if desired.

Terex is refreshing its entire Italian-made RT product line to increase commonality of components. In 2007 the 60t capacity A600 was replaced by the RC 60. This year has seen production start on the 30t RC 30, replacing the old A300. The RC 30 has a three-stage telescopic boom with a maximum hook height of 27.4m. The boom can be telescoped with a partial load.

Also new is the RC 34, rated at 34t, which was launched at the SAIE exhibition in Bologna last October. This has a four-stage boom that reaches 30m. It also has a different engine to the RC 30, using a Cummins rather than an Iveco.

Despite Rigo’s absence from the market, Locatelli and Bendini have not been left as Italy’s only manufacturers of RTs. Since 2005 Grove has been producing them at a plant set up next to its Potain tower crane facility in Niella Tanaro. According to Neil Hollingshead, the RT 530E and RT 540E have given Grove a real market presence in Italy for the first time. “We have had a lot of success in Italy,” he says.

“We have really entered the Italian market because of these two models. That’s been a big success story in Europe.” Both models are still produced at the main Shady Grove plant in Pennsylvania, USA as well. The only difference is that the Italian-built machines are CE marked.

More recently an indigenous Italian manufacturer has also begun production of a new line of RTs. TCM, better know for its truck-mounted cranes and specialty machines, began production at the end of 2008 of a 35t capacity RT, the RTCW 35. This year it has added a 55t capacity model, the RTCW 55. Both models have a maximum main boom length of 32.6m to give a maximum head height of 36m.

TCM export manager Antonio Pucci explains that what makes these RTs different is their full power boom that enables loads to be moved either using the winch or by telescoping the boom, even with the boom horizontal. Three units of the 55-tonner have so far been delivered to Russian oil companies, fitted with a special freefall winch and vibration hammers.

Pucci says that all the heavy-duty hydraulic components are specially built in house. “The engine, tyres and electronic device are the only components that we buy in,” he says.

Another 55t unit was shipped to rental company Santos Trading in Dubai in June. First deliveries of the RTCW 35 are expected in September, with two units booked for delivery to Doha, Qatar.

Pucci says that TCM does not expect to become a mass producer as the company specialises in non-standard equipment, but is targeting a production of 40 to 50 RTs a year. “We want a niche market,” he says.

As in North America, Asia is also increasingly looking for higher capacity RTs, says Sam Sim, Manitowoc Cranes sales director for mobile and crawler cranes in the region. “The return of RT sales to Asia (not including China) came in early 2006 fuelled mainly by the expansion in the regional infrastructural, shipbuilding and the petrochemical industries. The full range of RTs was sold, but the focus quickly moved to the larger cranes, from 45t to 120t,” he says. “The trend gathered pace in 2007 and early 2008, however like most of the capital equipment, the brakes were put on in the fourth quarter of last year. The sales for Manitowoc eclipsed the heyday of the mid-1990s in both units as well as the sizes. Our RT760E and the RT800 Series have really been great customer pleasers, with long booms and very strong capacities.”

While the global downturn has slowed business, Sim says he looks forward to these trends continuing once currencies and oil prices stabilise.