Still life in the old dogs2 October 2003
Checked the small ads lately? Used cranes can be a bargain and a shrewd purchase too. Will Dalrymple reports
When budgets are tight, customers might save money on buying a used crane. Although the market for second-hand electric overhead travelling cranes is not as developed as it is for used mobile cranes, it appears to be an increasingly popular option.
"We have seen that production cycles of cars or other industrial equipment are getting shorter and shorter. Therefore we see that companies who didn't buy any second-hand cranes 15 years ago are now really interested and welcome us," says Ralf Teichmann, CEO of German used equipment specialist Teichmann Cranes, which sells about 200 to 250 cranes a year, most of which range between 3t and 50t SWL.
Although some might feel that buying a used crane is just asking for trouble, the amount they save on the purchase price would more than pay for the price of services to counteract the risk, according to several used equipment vendors.
They say that with the judicious employment of third-party engineers to inspect the crane, perform test runs, and/or possibly by taking out a maintenance contract with the vendor, customers can offset the risk of purchasing an inadequate or antiquated crane.
What you get
Overhead cranes sold by German dealer Teichmann Crane average half the price of new equipment, says Ralf Teichmann. Willis Spencer agrees. He is principal engineer of Canadian firm WG Spencer Engineering, which specialises in mine hoists. According to JD Mitchell, principal of US consulting firm Crane & Hoist Engineering, used crane vendors are more willing to negotiate on price as well. "It is my experience that vendors often have more room to move regarding used equipment than they do for new. They are also much more likely to accept a lower offer for a used piece which is tying up capital, then for a new piece which isn't even into production."
The price of a used crane will also include modification and installation, says Teichmann. It may include a warranty, though it may not. It may include an offer of a maintenance contract. It may also include an estimate of the remaining lifetime of the hoist.
Teichmann says that his firm guarantees the lifetime of the hoist, following European FEM standards. "Hoisting is different from the rest of the crane steel, electrics for which you cannot give lifetime assurances."
According to Mitchell, these calculations also depend on what records are available. He says: "CMAA [Crane Manufacturers Association of America] and HMI [Hoist Manufacturers Institute] and others offer classes of service based upon load class and load cycles. If the usage history is available for the used crane or hoist, these standards can be helpful for calculating an approximate remaining life. Of course, the prospective buyer needs to determine what the required duty cycle is of his equipment before any idea of life can be projected for either used or new equipment."
There may be other economies in used equipment. Teichmann alleges that crane manufacturers cut corners in order to offer a product that will win the lowest-price bid. For the same reason, used cranes can afford to have more bells and whistles than new cranes.
Because crane refurbishers like Teichmann must have technical expertise to choose profitable cranes and repair them, they can install new technology on an old crane to create a product of higher value than new, he argues. Teichmann gives the example of German industrial conglomerate ThyssenKrupp, which was looking for a new scrapyard gantry crane, and turned to Teichmann after it found the proposed new crane design to be flimsy. For the same price, Teichmann supplied them with a used crane with much stronger steelwork and mechanical components, and with a new electrical installation, he claims.
After price, used equipment's second big benefit is speed of delivery. Because refurbished units are sitting around in a factory waiting for a new owner, delivery time is limited only by the need for modification rather than construction. Teichmann says it took his firm six weeks to modify the running height and running mechanism and install a completely new electrical system on a 50t casting crane.
There are two types of risks in buying a used crane: vendor and equipment. An unscrupulous vendor might sell a clapped-out hoist as good-as-new. Then there is the risk that a piece of old machinery, however sold, might give out.
Caveat emptor, of course buyer beware. Used hoists may cost less, but they take more work to verify that the product is as good as the vendor says it is. "Those that just spec new are usually either too busy to get other options or just do not understand how used equipment, if properly checked and
re-engineered, can be safely re-applied and used for an application," Spencer says. "These are the individuals that most likely got caught by going out on their own and getting the first thing that came along so now they will not entertain anything but new."
Vendors do claim it is possible to refurbish used equipment to a high standard. Says Spencer: "We find that all risks of using a used piece of equipment can and are eliminated if the refurbishing and re-application engineering is done correctly. In this case you end up with a machine that is just as reliable as new.
"The big trick is to find a group of people that know what they are doing and ones that are not just going to clean and paint the machine sometimes this is referred to as a DuPont Refurbish," Spencer says, in a reference to the paint manufacturer. "It is these types of jobs where the seller makes the machine look as good as new to cover up the weak points, and these are the cases that everyone remembers and thus thinks that re-using a machine is very risky."
There are tried-and-tested methods of checking out vendors. Mitchell suggests that prospective buyers should check out the vendor. "Bad vendors are very skilled at looking just like good vendors, so I don't believe there are characteristic differences that stand out. The best solution is to research the history of the vendor and the vendor's principals and to ask for a list of references, and then check the references thoroughly."
In other words, customers must be able to trust their suppliers not to mislead them. "You can only put these arguments [for used equipment] on a company that will hold this trust and which really is capable to certify and guarantee these refurbishments," Teichmann says.
Like Teichmann, Spencer also stresses that repairs of used equipment on their own are not enough. The company must be able to evaluate, and then stand by those repairs as well. "It is not risky as long as you have technical people working honestly to re-build the unit and properly test the parts to prove their integrity," Spencer says.
What may be true with the large, high-value mine hoists is not necessarily so with lower value kit. Even if an old hoist has been used infrequently, its working life can still be rendered obsolete by age, because of the manufacturers' product refresh cycle. "Packaged hoist manufacturers especially build in obsolescence into their product lines," argues Mitchell. "It is my experience that they will make a new product introduction which makes the previous product line obsolete every five to 20 years. Usually they will support the obsolete line for five to 10 years and after that the repair parts are difficult to get and/or very expensive. For these types of hoists it is important to know the date of manufacture and whether or not the hoist is still a standard model. On the other hand, custom built cranes and hoists are usually supported indefinitely as long as the manufacturer or its successors stay in business."
Checking the goods
The used crane vendor needs to reassure customers that the equipment can perform as expected. Mitchell says that there are three ways for customers to satisfy themselves: detailed inspections by qualified persons, test runs under expected operating conditions and provision for coverage of repair parts and labor through warranties.
With reference to his first point, a new standard of EOT and hoist maintenance available since April can help customers decide if an engineer is qualified to examine the machinery, Mitchell says. He quotes the US industry standard, CMAA 78-2002, which defines a qualified person as "a person who, by possession of a recognised degree, certificate of professional standing or who by extensive knowledge, training, and experience, has successfully demonstrated the ability to solve or resolve problems related to the subject matter and work".
Mitchell advises that the person who inspects the crane, who should be an expert with experience of this sort of equipment, should check the high wear components of the crane and the hoist. On the crane that would include: wheels and axles, electrification and controls, brakes, and cracks in the structure and welds. On the hoist that would include: motor couplings, gear trains, hoist cables (wire rope), sheaves and bearings, load brake, motor brakes, controls and limit switches, and rope guides. He warns that gearbox problems and control problems are going to be difficult to identify.
"It is my opinion that it would usually be in the best interests of the buyer to have independent third party evaluations for the purchase of used lifting equipment, but I do not see this as the standard policy for the majority of purchases here in the United States. I think this may be due to the feeling of the buyers that the process is not needed and is just adding unnecessary cost."
In Europe, of course, overhead cranes must be certified before they are used the first time, says Teichmann. Although this inspection is intended for safety, it will also flag up structural problems, he says. "If you have a safe crane in bad condition, it won't get the certificate." Teichmann guarantees that its cranes will pass this final examination.
There are two types of sale, according to Mitchell: "Used equipment is normally sold either 'as is' with no recourse for the buyer, or with some sort of a warranty of minimum performance based on inspections, testing and knowledge."
The advantage of a service contract is that it forces the vendor to act on its promises. Teichmann offers a standard three-month and optional six-month warranty, which includes parts and labour on non-consumable parts such as cables and brakes. He says that the guarantee backs up the company's claims of thorough inspection. "Only after completely dismantling the crane and checking it do we give a guarantee," he says. "If we didn't, and avoided the costs, and didn't check bearings, and something happened after erection, our costs would be so much higher to repair it."
No matter how good the used crane is, it is nearly worthless if chosen improperly. Cranes working outside their capacity will break down or be too expensive to run, or both.
Different skills are used to select a crane than to maintain one, argues Spencer which means that different people need to be involved. "The most common error that customers make when looking for a new used hoist is that they will send their head maintenance person out to look over the equipment," he says. "But this person is often not experienced in looking at different machines so they do not know what to look for on a hoist built by a different manufacturer." He advises: "Get your engineering group involved up front to help with the selection along with the site personnel."
Because overhead cranes are made to order, the bigger the selection of a vendor, the better the chances it will stock a machine that might work for the customer, argues Teichmann (who stocks anything from 100 to 150 cranes at any given time). This is one reason why used equipment is a specialised industry only one brand of cranes could not satisfy demand.
Engineers that work on a wide variety of hoists soon build up valuable expertise about different manufacturers and different models. "We know our hoists and how they are made," Spencer says, "so we know where the weaknesses are in the different units." Teichmann adds: "Different manufacturers have different weak points on their constructions." This on-the-job expertise with many different marques of cranes give these vendors a coolly objective viewpoint on overhead cranes which customers trying to choose the right product might find far more useful than the advice of a single manufacturer.