Manufacturers and large rental companies in the crane industry have always operated safe in the knowledge that innovating to building ever-larger capacity cranes meeting global standards of the day will hit the sweet spot of low competition from rivals and high returns.
Constantly improving modularised building methods have helped to accomplish feats previously thought impossible, such as the building of the 30-storey T30 skyscraper in Changsha province at the end of last year in just 15 days. Despite the skepticism espoused by some regarding the building’s safety, it stands as a sign of what is possible with current modular building methods, and the trend towards larger prefabricated modules can only be good for crane men.
On refineries and power stations being constructed around the world large cranes in excess of 2,000t are the great moneysaver, with massive tonne-metre ratings covering large swathes of the site and capable of over-sailing obstacles on even the most densely packed site.
However, some are now concerned that with the growing number of companies manufacturing super-heavy lifting cranes, even with the number of projects requiring such cranes in emerging markets so large, supply could soon outstrip demand for these cranes.
Temporary Overload
At present the number of super-heavylift cranes built and ready for work, or indeed already at work, is nearly into the double figures, with that number looking set to double over the next year or so with a number of number of manufacturers sizing up the market.
While UK rental and transport firm ALE’s director of the crane business and projects, Paul Sands, agrees the risk of oversupply could become a real problem, his firm’s recent release of its second 4,300t AL.SK190 crane and rumours of an imminent debut project for the SK350 show it is not weighing too heavily on his mind.
ALE’s first AL.SK190 has already been used for successful lifts on the US and the UAE, where it’s most recent lifts on the site of a refinery expansion project in Ruwais required it to lift loads of up to 1,900t.
Sands explains that the superheavylifter’s relative rarity on the market still gives it the edge when tendering for jobs, saying: "The crane is working to the maximum capacity, which gives a premium on the crane compared to a crane built to do a job that is competing with something else on the market."
Speaking to Cranes Today in December 2010, TNT Crane and Rigging’s Michael Appling commented that as companies such as ALE step up to meet existing demand for cranes of these capacities, situations such as the reduction in nuclear power plant building in Europe and the US could result in the industry reaching oversupply of these machines sooner than expected.
"I could see a situation where they’re back to getting overbuilt, and somewhat grossly overbuilt, because there are so many companies that build the really large cranes and there were a lot of people focused on purchasing those for the nuclear industry.
"It just does not appear that there will be much of anything in development in nuclear, and I don’t know about worldwide, but I know in the States I would not say that that’s going to be a large source of capacity growth for power generation going forward."
In Europe at least, crane manufacturers seem to regard this as a little more than a temporary blip. Sands says: "In the UK nuclear will be delayed two to three years [due to the concern surrounding] Fukushima, but it will still proceed in my opinion."
Echoing this view, Terex product marketing manager for crawler cranes, Guntram Jacobs, says: "It will delay demand before new projects begin, because of safety concerns, a lot of things are being reviewed, so it will delay demand.
Versatility is key
However, for the 3,200t CC 8800-1 TWIN the firm says this is less of a problem than for most. The ability to use the TWIN kit with the CC8800-1 to double the 1,600t crane’s lifting capacity and easily revert to its single boom form for jobs with lower lift capacity requirements adds a level of versatility that is vital for high utilisation, hence return on investment.
Jacobs explains: "Let’s say you have a contract that could benefit from a super-heavy lift crane. If the numbers fit with the return on investment for that project then they may just buy a specific lifter, but if you have crane that you can also use for other things afterwards and its transportability allows it, that can also play a role in the decision.
"The TWIN you can also use it as a CC8800-1, so basically you take half the parts away and basically you still have this crane that’s half the size and half the capacity. Anything that is made specifically for one purpose is less flexible. It’s the reason why we have four of them.
"Everything comes down to the return on investment, and there are many areas, flexibility is one, then if you can break down the machine to be transported easily by standard transport sizes then that’s another aspect, and that’s another aspect of the TWIN."
Terex’s approach certainly allows more cautious customers a highly flexible way to ensure good utilisation, something which the company claims is the reason all four of its units are currently on jobs while high profile project cancellations and buyer hesitance continues to trouble super-heavy crane manufacturers.
But even with the big manufacturers developing cranes moving further and further up the load charts, rental companies’ focus on specific projects means the largest super-heavy lifters, predominantly ring-based cranes are still being manufactured by these firms.
Workhorses for courses
One of the biggest advantages large ring-based cranes have over megacrawlers is that the ground pressure exerted on the jobsite is considerably less than it is for crawler cranes. This improved weight distribution gives greater flexibility in where they can be set up, as often on nuclear sites for instance, contractors need to be mindful of underground storage of hazardous waste materials or utilities underlying the site.
Sarens UK general manager, Jon Dailey, says: "We have to develop these super-heavy lifters because the manufacturers simply don’t make them that large yet.
You’ve got to look at the market. We do a lot of analysis of the market to see what way it’s heading. You can generally see what projects are on the boil in advance through feasibility studies. When you look at it you can get a bigger hit in a short frame of time and cram more into a year.
"That’s where the bigger machines pay off, because you can get larger returns on it versus getting small returns on a lot of little cranes. You can generate significant amounts of revenue over a short period of time."
Sarens’s SGC-120 has been available for over a year and has had a good workrate, recently completing a high profile job in Chandler, Arizona in the US for Intel constructing a new $5bn microprocessor factory.
Dailey continues:"There’s always going to be that market out there if you can design something and get it in front of people, that’s the big thing. It may be slow on the initial pick up but eventually it becomes the norm.
"When I was at Mammoet we had the PTC, that was considered a big machine at the time, and now it’s kind of in the middle of the pack. 1,600t was quite a big lump in the past, now 3,000t is where you’ve got to be at and it’ll continue until there comes some limit somewhere. Someone will eventually say ‘well actually, we can’t move it’ or there’s no benefit for the economy of scale on the fabrication side, and that I think is when the industry will cap off, when someone will turn around and say there’s no economic benefit to going any bigger with a module or a reactor."
While crawler cranes such as the CC 8800-1 TWIN have an advantage in being able to serve the super- heavylift market while simultaneously addressing the needs of customers looking for high capacity crawlers, competition in these capacity classes is still markedly stronger, and as with rental rates across the market, a good return on investment is harder for customers to achieve.
Booming innovation
What can help to set rental companies apart, and is increasingly important in times when the level of competition is high is ownership of additional pieces of kit that give a technological advantage over competitors.
Liebherr have concentrated on just that for the higher end of the heavy crawler market with one of its latest innovations, the PowerBoom. The manufacturer is currently testing the PowerBoom, which uses standard lattice boom components to dramatically improves the cranes lifting capacities throughout its load chart, with its 1,350t LR 11350 and 3,000t LR13000 cranes.
Combined with the ability of crawler cranes to move around site with the load, this innovation greatly improves mid-boom capacities and flexibility for Liebherr crawlers.
Developments like this are particularly apposite in the current financially precarious rental market, as Dailey explains. "Now it’s more about consolidating your position and really focusing on what you’re doing and whether you are doing it the most efficiently. That’s probably been the biggest change recently, it’s been less about investment and growth, and more towards refining the way you do business and trying to find efficiencies and how you can do stuff better and then increasing your margins that way, rather than relying on the market growing and revenues.
"Because of the global economy rates went down, the amount of work went down and obviously as that continues competition heats up and everybody starts competing trying to get the job on a price basis.
"You are looking for an advantage technically, have you got a piece of kit that nobody else has got that can do the job better? That’s the first part you’re looking for. If you don’t have that then you’re looking at a very competitive situation where you’re trying to compete against two or three people for a job.
"At this point everybody is fighting over the same job and it becomes like a Dutch auction where eventually the only one who wins is the client. At that point the rates go down so you have got to try and improve efficiencies internally by improving your procedures to become more cost effective."
This kind of advice has always been heeded by manufacturers, believes Liebherr Ehingen managing director, Cristoph Kleiner, who notes that manufacturers have long dealt with the market for cranes using a three-pronged approach. The leading crane manufacturers work in three fields: extending the program with new and larger crane models, adding new attachments to existing models — rising capacity or boom length — and replacing older models with new design developments in a certain tonnage class."
However, with Liebherr’s LR13000 still in testing, as with some other large manufacturers, it cannot yet address the super-heavy lifting market on these terms. This gives the appearance of a two-level market at present, one for capacity-enhanced conventional crawlers built by the manufacturers, and one for the super-heavy ring-based cranes addressed by the larger rental firms.
Sands says: "It is two separate markets, as I say the PowerBoom is a good concept, it gives you better duties, mid-range long boom. Where it has got the ability, instead of being a long boom, say a 100m boom, and lifting at mid-range radius of 30m, where you were lifting 4-500t you can now lift 700-800t. But these cranes do not and cannot compete with the super heavys, they’re just thousands of tonne-metres different. The physical capacity of the crane cannot be increased, a 1,350t crane can’t lift any more than 1,350t."
So while most agree that current demand is strong enough for around five new super-heavy lift cranes each year, with chinese manufacturers XCMG, Zoomlion and Sany entering the fray, the question is how long will that remain the case?
