Cranes and Lifting recently sat down with directors Shawn Borger and Hermann Buchberger to discuss their venture and the current state of the tower crane market.
It’s been 12 months since Borger Cranes took a 50 per cent stake in Active Crane Hire and Hermann Buchberger was upfront in saying that the tower crane market has changed a bit over the last 12 months but was feeling optimistic about the future.
“It’s come down a gear or two, but that doesn’t mean we won’t be back at full throttle again in 12 to 18 months,” said Buchberger.
“The market has pulled back providing us with a chance to reposition our fleet. It’s fair to say we have to change and evolve to meet the challenges of the market. Up to six months ago, we needed every available hook in the air, now we can talk about possible trade-ins, maybe sell some of our older cranes and reinvest in what the market is asking for now,” he said.
Shawn Borger recognises the changing demands of the market needs to be reflected in the mix of cranes in the fleet.
“Over the last five to six years, you could have any type of crane in the fleet and it was always busy. But markets change and we have to ensure our fleet changes to meet new demands. Take the hydraulic electric luffing cranes in the fleet for example. Hydraulic electric luffers are a relatively new breed of tower crane to the market and they are flat out, whilst the utilisation of some of the more traditional cranes in the fleet is starting to slow down.
“It’s the same with our mobile crane business. We have 25 Frannas in the fleet and it has quietened down in the 20t market, but for the 25t, and now the 40t machines, the demand has really taken off and they are flat out. The market responds to the different types of available technology,” he said.
Borgers and Active Crane Hire recently ordered three units of the new Potain MCT 325 topless crane and Borger sees these as a positive addition to the fleet.
“The hydraulic electric luffers have been a very good decision, and I think this 325 class will be perfect because it’s not a big heavy crane to erect, it’s easily transported and it’s a natural progression. We’re not out of our comfort zone with this model – it very much fits our fleet. We see it as a ‘beefed up’ version of the MCT 205 and we’ve got 15 of those models in the fleet. The weights are different with this model, but the rigging sequence is the same and it’s a crane that enables us to quote on any job,” he said.
“I’ve always been a fan of ‘one crane does all’ because only one hook is needed. If the construction site has a large footprint and you are able to cover it using one hook on a crane with a 75m boom, it’s not going to be that expensive for the client. The MCT 325 is a good construction crane well suited for land projects, long bridges and applications like that, it’s going to be a good crane for us,” Borger said.
According to Buchberger, the market for the larger crane class is competitive.
“There are a number of companies representing various manufacturers and many of the crane hire businesses focus on crane labour as the main income stream. There’s not too much consideration given to where the crane comes from and you see sub-hire, from various outlets, subsidising the ‘real’ crane rental rate with ‘increased’ margins on labour.
“We provide a ‘real’ labour price and a ‘real’ crane price,” he said.
“Our principle from day one has been to understand what we require from the crane and setting the rental rate accordingly. If we do fluctuate on our rates, its only by a little and that’s always been our strength,” said Buchberger.
The expertise in the teams running the Borger and Active crane fleets help differentiate the businesses.
“Our aim is to completely immerse our teams in the business to the extent that when a crane operator isn’t working, they are working on, and servicing the crane. Understanding the machines means they can trouble shoot and fix issues on site compared to operators who see a light flicker and immediately call out the service engineer,” said Borger.
“The first 12 months for Borgers and Active has been excellent. We’ve found some positive initiatives in the Active business which we’ve initiated in ours and some of the changes we’ve made in the Active business have been driven from the Borger business. As we said earlier, labour is starting to come into the mix a little more and we’re now able to offer a bit more of a package to the right customers. The luffing cranes weren’t really anything to do with the Borger Cranes, but we can see it was a really smart move to bring them into the market and so far, they’ve been going great guns,” he said.
Buchberger looks to other global markets to understand what challenges could emerge on the domestic market.
“The success of the luffing cranes has been fuelled by the same issues relating to over sail, the same issues we witnessed in the UK. Over sail can put the hand break on other tower crane models and when you tell a customer we can solve your problem with a luffing crane, for an extra $500 a week, they are going to take it.
“In the current market, we are able to reposition ourselves and I’d like to see some of the resources tied up in our older cranes put into more luffing cranes. In a slightly corrected and more demanding market, customers will make decisions based on the quality, the efficiency and the diversification of the product,” he said.
Borger confirms the shape and size of the crane fleet is under continual review.
We need to be sure that our fleet is contemporary and we’re always asking questions about the make-up of the fleet like ‘Do we need 25 Frannas or do we actually need less pick and carries and more speciality cranes?’,” he said.
“The luffing cranes have filled a gap in the market, and with the 325 model we can shift into another gear. In busy times, you can hire pretty much anything, but in quieter times you have to be a bit more specialised. We are asking the market to think about the lifting requirement on their sites. It may be the case that a smaller crane can manage a project and when there’s a requirement for an extra lift, you can bring in a mobile crane. This will keep costs down. Unfortunately, many clients think they know what should be done and try to solve the problem without asking people who deal with cranes every day.
“Over the last 12 months, both companies have learnt a lot and the relationship is improving all the time. With our combined capabilities we are in a position to capture the complete job where we can provide a tower crane and also a supplementary mobile crane where required. Between both companies, we’ll be able to provide the right solution at the right price. This was our vision when we bought Active Crane Hire and Borger Cranes together,” Borger said.