The ups and downs of the RT market

It’s been like a roller coaster ride. That’s how Bob Renegar, president, Renegar-Driggers Machinery, described the rough terrain crane market over the past couple of years.

Renegar Driggers is a Terex Crane dealer that sells Terex cranes in Tennessee, South Carolina, Florida and the Caribbean islands.

“We saw the first part of 2013 as pretty productive with RTs and then in the summertime it kind of slacked off,” he said. “I guess you could call 2013 overall as so-so. I felt we had a more productive year in 2012. But 2012 was basically the comeback year for RTs. We saw sales go up considerably in 2012 and then the first half of this year they kept on track with increases, and then the market leveled off.”

Traditionally, rough terrain cranes endure a lot of wear and tear out in the field, which means they are often replaced at quicker rates than other cranes.

“The big rental companies see the need to replace these cranes and to add to their fleets,” Renegar said. “Some of this activity is the driving factor for the market. Rental houses are starting to feel a little bit better about the economy so they are now willing to start renewing their fleets.”

In terms of size, higher capacity RTs are more in demand than the smaller machines.

“We used to get several orders a year for the 30-tonners and now that’s not the case,” he said. “It seems like the entry-level for RTs is now the 55 to 65-ton classes. The 80-ton class is really popular and we are seeing a growing interest in the larger cranes. The new 110-ton Terex Quadstar has sparked a lot of interest as has the Terex RT 130.”

Rough terrain cranes are a mainstay in the fleet of Phoenix, AZ-based Southwest Industrial Rigging.

“For the last couple of years, the market for RTs has done extremely well for us,” said Mike Madge, general manager, Southwest Industrial Rigging. “The market slowed down a little in 2013 but I think it will pick up in 2014.”

Madge said the majority of work for his company’s RT fleet has come from power line work in California, Oregon and Arizona.

Is bigger better?

“We own one of the largest RT fleets out west,” said Madge. “We have several 130-ton machines and we’ll be getting the new 160-ton RT from Tadano. What makes these cranes so versatile is they can go to work anywhere, climb up mountains and they have the large, long booms.”

Southwest Industrial’s RT fleet is about 75 percent Grove models and 25 percent Tadano models.

Madge has been impressed with the attributes of the higher capacity models, including the 150-ton Grove RT 9150 and now the new three-axle Tadano GR 1600XL-2.

“We mostly bought the higher capacity Grove RTs but now Tadano has this 160-tonner,” he said. “We were the first to buy it. It will be our crane at the Tadano booth at ConExpo.”

The longer booms on the larger capacity RTs are a draw, Madge said.

Rick Curnutte, product manager of rough terrain cranes for Link-Belt, said his company’s range of RTs is on the mark; however, the market has been flat.

“There’s been good utilization from dealer rental fleets but most end users are continuing to rent instead of buying for now,” he said. “Volume-wise the 80-90 ton is our best class for RTs, followed by the 50-65 ton class.”

Most RTs are going to the bare rental market, he said. And, there’s more interest in larger capacity RTs than ever before.

“The trend is that we are seeing longer booms with the larger capacity rough terrains,” he said. “Transport is just as important for Link-Belt as evidenced with Link-Belt’s hydro-static machines, the RTC-80110 and RTC-80130.”

Strong utilization

Michael A. Herbert, director of product planning/marketing, Manitowoc Cranes, North America, said rental fleet utilization has been a bright spot.

“We’re seeing strong utilization in the rental fleets,” Herbert said. “Sentiment in the market is that 2014 will be a good year, on pace with 2013. Oil and gas projects, especially along the Gulf Coast, are keeping this segment busy.”

For Manitowoc, demand centers in the 80-90-ton classes. “The utility of the equipment and the types of projects being worked on, especially infrastructure and oil and gas work, as well as refinery maintenance, lend themselves to this crane class,” Herbert said.

In general, he said more users are choosing to rent versus buy equipment until their confidence in the overall economy and long-term projects improves.

Larger capacity RTs are a cost effective way for customers to pick large loads that they would have done with other types of cranes in the past. For this reason, Tadano America launched the largest capacity on the market, the 160-ton capacity GR1600XL.

Catering to energy markets

“We continue to develop larger RT products and believe that we are the market leaders for the larger tonnage RT classes served,” said Ron Dogotch, vice president and general manager of sales, Tadano America. “We just launched the largest RT crane available in the North America. The basic design criteria was to build the highest capacity crane with the longest boom possible that could easily be transported. Our self-removing counterweight and outrigger system allows the crane to be easily disassembled to a transportable weight.”

Dogotch characterizes the market for Tadano RTs as pretty strong, especially in the energy sector along the Gulf Coast.

“RT sales activity in North America has been strong since 2010,” he said. “Tadano has enjoyed record sales years in 2011, 2012 and again in 2013. This has primarily been driven by the energy sector. We see the energy sector remaining strong and we are also aggressively working to increase our exposure to other markets and opportunities.”

Dogotch said sales are coming from both big customer projects and fleet replacement.

“The energy sector activity has brought on a lot of major projects,” he said. “At the same time, while our customers are taking advantage of retail sales opportunities, and renewing their fleets with new orders they are also looking to grow their fleets of Tadano RT products.”

Jay Barth, RT product manager for Terex Cranes, said that RT sales have waned since the first of 2013.

“While it would be nice to say that the market for RTs is in a strong recovery mode, there is not sustainable evidence of this type of activity,” Barth said. “If one were to generalize you can say the market is good, but not great. The purchase of cranes for large infrastructure projects is not yet a consistently strong portion of the market. It will be a benefit to both contractors and manufacturers when this happens.”

Barth doesn’t point to one class of RT that is selling better than another.

“There has been activity in the larger cranes and smaller cranes alike,” he said.

But he does see interest in larger capacity RTs.

“In the market above 100 tons, we currently offer two models, the Quadstar 1100 and the RT 130,” he said. “The RT 130 has been the large anchor in our line and the Quadstar 1100 was the result of a focus on improving our existing line.”

He said that large RT sometimes face transportation challenges in terms of assembly/disassembly, locating truck equipment for hauling, and physical size on the jobsite.

“They are typically used for maintenance and assembly of mining equipment, which requires their higher lift capacities and where they are onsite for extended periods of time and are typically not limited in the amount of space they have to maneuver,” he said. “The larger units are beginning to approach the point where they are evaluated against all-terrain cranes.”

Manitex International’s Badger division is making its mark in the RT market at the smaller end of the spectrum, according to T.A. Lee, director of sales.

“We are in the small segment with our 15 and 30-ton capacity cab down RT,s” Lee said. “The market we have been chasing is the rental market and the refineries in the Gulf Coast area.”

Refineries like the 15-ton Badger, Lee said. “It’s got pick and carry capabilities,” he said.

“The competition used to be the Galion crane, and it’s no longer being made. We have the replacement for it. The technology we have is state of the art. These machines have joy stick controls and meet all the strict OSHA requirements.”

Another draw is the ergonomics of the cab. “With this type of crane, you used to have to climb in over the tires,” he said. “We brought in customers and said what do you want in this type of crane? We now have that crane.”

Lee said sales have been strong in the fleet replacement category.

“Most of the units we sell are replacements for the older Galion units,” he said. “We have a new machine for a new generation of operators.