24
ACT
OCTOBER2014
INTERVIEW
WHAT’S YOUR TAKE ON THE TOWER CRANE
MARKET?
We’ve seen the tower cranemarket,
quarter over quarter, increase for the
last year to year-and-a-half.We think
thismarket is steadily returning, steadily
gettingbetter.We’vemainly seen
utilization in thePacificWest andPacific
Northwest, largely aroundSeattle and
theBayArea and inSouthernCalifornia.
These are the three areaswe’ve seen
themost growthwith the tower crane
market. Itwill probablyonly get better in
thenear term.
LESS THANA YEARAGO, ERC ANNOUNCED
THE SALE OF SEVERAL CRANES IN ITS FLEET.
WHATWAS THE RESULT OF THAT SELL OFF
ANDHOW DO YOU CHARACTERIZE THE
MARKET FORUSED CRANES?
We took an aggressive approachbyusing
a sealedbid auctionwith the intent to
sell 5 to10percent of our crawler fleet
basedonorderly liquidation value.We
didn’t really get the reachwith the type of
customers for these cranes and the type
of bid activitywewanted to see.
A sealedbid is different and someone
doesn’t necessarilywin the auction at the
endof theprocess.We thought itwas a
safeway to test themarket. At the same
time, wewereworking to enhance our
direct sale approachusing thirdparty
brokers, our relationships in themarket,
international reach and tradeswith
OEMs and tradeswithother dealers.We
didn’t accept anybids presented tous and
chose topursue the othermethods that
we thoughtwouldproduce better returns.
Themarket for used craneswasmuch
WHAT ARE THE BESTMARKET SEGMENTS
FOR CRANE RENTAL, (INCLUDINGBOOM
TRUCKS, ROUGH TERRAINS, CRAWLERS
AND TOWER CRANES) INNORTH AMERICA?
TheGulfCoast and thePacificNorthwest
in terms of the overall geographies
have been the twobest regions.We
havehad somepower-relatedprojects
in theMidwest and industrialmarine
work in the Southeast. Additionally,
transportationprojects in thePacific
Northwest and general building and
petrochemical in theGulfCoast region.
When you look at the footprint of
Essex in theGulfCoast region, with
our facilities inArcola, TX (ahalf hour
southofHouston) and inAlabaster, AL
andTampa, FL, we are set up verywell
to serve themarkets in theGulfCoast
and those states of Texas,Oklahoma,
Louisiana, Alabama,Mississippi and
Florida.Our footprint allows us tohave
a lot of cranes available and the right
amount of service techs. And likewise
in theNorthwestwithourCoastCrane
brandwithour facilities outsideLos
Angeles and theBayArea and inSeattle
andPortland, we are verywell suited to
service theWest andNorthwest aswell.
platform.We are one company as ERC
with the twobrandswe serve, Coast
Crane andEssexCrane.
WHAT’S YOUR TAKE ON CRANE RENTAL
RATES?WHY DO YOU THINKRENTAL RATES
HAVENOT RISENAS STEADILY AS CRANE
PRICES?WHATWILL IT TAKE TO SEE A TRUE
REBOUND IN CRANE RENTAL RATES?
That’s a great question.H&EEquipment
had some comments related to rental
rates in their recent quarterly earnings
call, aswell. Fromour standpoint, we
think it’s really a capacity issue. There’s a
relativehigh capacity in themarketplace
and it hasn’t allowed rental rates to
meaningfully increase. In thepast, the
lackof capacityhelpeddrive rental rates
tohistoric levels.Wewon’t see this until
capacitydecreases.
A lot of the current rental rates don’t
justifybuyingnew cranes. It’s going to
require a lot of federal and state funding
and larger projectswith longer periods of
increaseddemand to get rateswhere they
need tobe to justifybuyingnew cranes.
We lag in terms of providing aprolonged,
sustaineddemand thatwill allow capacity
tobe takenout of themarketplace.
A Liebherr LR1100 and Grove RT700E
from the fleets of Coast Crane
and Essexwork at a University of
Washington stadium rebuild.
Matthews said Essex Rental Corp. and
its subsidiaries Essex Crane and Coast
Crane areworking to becomemore
customer-centric.
