That was the year that was

Have crane, will travel
For months international headlines have screamed that the sky is falling on the Eurozone, and while market confidence has been unsurprisingly depressed, some believe the best days of the European crane industry could be behind us.

Gloomy forecast is piled upon yet another gloomy forecast, downgrades abound and our saviours in the East are looking less capable of rescue attempts than we first wanted to believe.

Ben Bernanke’s announcement last month that the Federal Reserve—backed up by five other major central banks—would help sustain liquidity in the world economy was supposed to be a much needed ray of light. The very next day it was overshadowed by news of China’s manufacturing sector contracting for the first time in three years. UK manufacturing output is on the decline going into Christmas, and Mervyn King has talked about a collapsing Eurozone ‘triggering a spiral that is characteristic of nothing short of a crisis to the entire financial system’. It would be easy to panic.

But the future for firms in Europe depends largely on whether you interpret what you see as a stepping-stone or a stumbling block. Europe is far from dead in the water. Crane manufacturers are seeing pent up demand increasing sales and are planning accordingly. Technological advancements mean more complex items being manufactured using more advanced automation, helping manufacturers streamline operations and reduce costs.

The pace of industrial development in emergent markets also provides hope for entrepreneurial spirits in the crane industry, such as ALE, who have relocated their heavy crane division to the heart of the action, and now stand poised to reap the benefits of a market performing well contrary to all expectations. While rental rates are low, joint ventures with firms in growth markets offer the means to higher utilisation that can offset lower returns, and many firms with the foresight to embark upon them are handling their business as usual, although against a different landscape.

In addition, for services such as international standards training, these markets provide a wealth of demand. So, as ever, European crane hire and manufacturing firms used to the three key principles of utilisation, mobilisation and cost-effectiveness are adapting to take advantage of opportunities wherever they arise.

And as the second dip of the recession rears its ugly head, industry firms are going to have to demonstrate what they have learned from their first go around the plug-hole of potential bankruptcy to return the European crane market to its former glory.

Kevin Walsh, features editor

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Letter from America
It’s hard to see this year come to an end. Not because “it’s just flown by” or any other sentimental, passage-of-time reason. It’s hard because 2012 is an election year here in the US, and if 2011 is a preview, we’re not looking toward 12 months of fun.

The year started out strong with many companies riding in on a wave of increases in late 2010. However, this summer, crane manufacturers and dealers alike reported hesitancy from their customers with making any big buys, thanks to the toddlers in congress who spent weeks squabbling over the debt ceiling and debt reduction without much of an accomplishment.

Despite the havoc in DC, and any slow down from earlier in the year, many manufacturers and dealers have since reported increases in the third quarter of 2011, compared to the same quarter of 2010. This is good news in the grand scheme of recovery; even with project delays the market has strengthened but it gridlock in congress derails sales and growth in the industry, we are superscrewed in 2012.

As Cranes Today goes to press, it’s amidst reports that the supercommittee—12 congressional members assigned the task of reaching a debt reduction deal that the rest of its colleagues couldn’t reach this summer—is unlikely to do so. It’s not a huge surprise.

There is an expectation for our legislature to succumb to a form of senioritis. Either they’ll be out campaigning in the run up to November, or they’ll be unmotivated to do anything because there may be a party change in the White House. If crane customers continue to hesitate in their orders off the back of this behavior it’s certain we’re in for a rough year in 2012.

Lest we forget what the Republican primaries have shown us in 2011—again, there is little for which to be excited. Saturday Night Live skits can only offset a certain number of obnoxious political television ads that will clog the channels. I suggest we start a book club.

Despite what it may seem, I’m not a complete pessimist. Here in Minneapolis one can’t go anywhere without spotting a tower crane. Head toward the University of Minnesota and you’ll be spoilt for choice thanks to renovations on campus and the nearby light rail project to connect the city with St Paul. Our state government is as finicky as any—it even shut down for a period this summer over a budgetary disagreement—and there are still projects moving forward.

Nicole Robinson, Americas correspondent

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Have some standards
Industry associations were the loudest voices this year when it came to improving standards. They called for tighter requirements in tower crane manufacturing. They also recommended that owners of mobile cranes, tower cranes and overhead cranes update their usage habits.

The revision of EU standard EN14439 now requires tower crane manufacturers importing to Europe to build towers with improved access to crane cabs, including railings, larger toe guards and rest platforms on tower crane segments. European manufacturers’ body the FEM pushed forward with position papers recommending against routine overload tests and using cranes for entertainment purposes.

Crane design standard EN13000 currently prevents operators overriding the rated capacity limiter, but the FEM is developing a revision of the standard to allow this in emergencies.

A new revision of the ISO 4309 standard for wire ropes was developed. The updated rope testing criteria gives rope testers new values for discarding ropes which take into account the slight stretching of ropes after the first loading cycle. A second measurement must now be taken after the first loading cycle and used for calculating the uniform decrease in rope diameter, and different discard criteria diameters used for different types of rope, e.g. fibre core and anti rotational rope.

Outside of regulations and standards, associations moved to improve tower crane safety. Following accidents in the UK, the Construction Plant-hire Association’s Tower Crane Interest Group published a series of best practice guides.

The Climbing of Tower Cranes guide describes good climbing practices for the benefit of both crane hire firms and contractors. Member firm Select Pant Hire has produced a DVD on tower crane safety and climbing, which it is distributing internationally free of charge.

Cristina Brooks, reporter

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Fuelling profitability
To the rational crane buyer, the only important question to ask is: “How much money can I make from this crane?”

There are numerous ways the profitability of a crane can be increased. The machine can be made quicker to set up, and perhaps by one person rather than a whole crew. It can be made more compact to access a wider range of job sites. The crane can be made easier, cheaper and/or quicker to transport to a job site. Examples from 2011 include the Terex Challenger 3160 and 3180 all terrains designed for one-person operation.

A cost outside of the control of the crane industry is fuel. This has become increasingly burdensome in recent years. Moves towards fuel efficiency, therefore, have a sound business basis. The environmental agenda is also driven by regulations that consistently tighten up on permitted engine emissions.

Developments in 2011 on the environmental front in Germany include Tadano Faun adopting the use of Mercedes Bluetec emissions reduction technology across its range as standard and Grove adopting the single engine philosophy for its new GMK 6400. Fuel efficiency features that are becoming standard on cars are also now coming to construction machinery, such as the engine automatically switching off when the vehicle is stationary. This is becoming normal on excavators. On cranes, Tadano in Japan has introduced a positive control system that reduces fuel consumption by 20% when the crane is in stand-by mode, by keeping hydraulic pump discharge to a minimum. When the crane is operating, the system controls engine speed to reduce fuel consumption by up to 30%. The LMI display also now has a fuel consumption indicator.

We can expect fuel efficiency to become as much a selling point for cranes in the years ahead as it already is for motor cars.

Phil Bishop, correspondent

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Economic storms shape the global market
Three years of bad economic news has left the West’s leading crane makers wondering whether the boom years of 2005-8 will ever return.

While 2012 should be somewhat better than this year, it’s not going to be a boom year. And while China too is seeing a bit of a slowdown in crane sales, most crane makers in Europe, the US and Japan would gladly exchange their recent trends in sales and profits with those of XCMG, Zoomlion or Sany.

Downturns don’t just mean reduced sales and earnings; they mean lay-offs of valued and qualified staff who may never return. They mean a reduction in investment and a diversion of focus on cost-reducing products and operations. Perhaps most importantly they mean a loss of momentum. And that’s the key. The Chinese manufacturers have enjoyed 3-4-years of strong growth, while the West’s crane makers have had to slow down.

Now the crane industry isn’t about to be turned completely upside down during this period but if you understand the ambitions and objectives of the Chinese crane makers, then this period is important. China’s new factories are amazing in terms of capacity and investment. New products are coming on stream at a pace without precedent. But there are quality and management issues. And there remain serious global distribution and product support challenges.

It’ll be a while before the Chinese all terrains can match the Germans. But in crawler cranes, rough terrains, tele truck cranes and tower cranes, that day is closer—a lot closer. And if the cost of a 100t Chinese truck crane is half that of a European all terrain, and everything else is about equal, then customers will start to think of alternatives. After all, a crane is (or at least should be) a tool to save or earn money. Let’s never forget that.

Stuart Anderson, consultant, Chortsey Barr