The emerging trend of established family-owned crane companies closing the yard gates and selling their assets continues. James Chauncy, Pickles Auctions National Sales Manager, Trucks & Machinery has seen similar trends in other industries. He provides some insights.
“We experienced a similar trend a few years ago in the transport industry, where founders of family owned businesses reached the age of retirement and began examining the next stage in their lives. The decision was to sell the assets and retire comfortably.
“Over the couple of years, we have seen a similar trend emerge in the crane industry where the owners of a number of small and medium-sized crane companies have simply said, ‘You know what? We’ve been in the game for a long time, we love the industry, but we need to hang up our boots.’
“They’re making these decisions based on the back of strong asset prices. With the cost of new equipment increasing dramatically and with lead times blowing out, they know they are getting a good return if they’re selling now,” said James.
Pickles Auctions has handled a number of crane related auctions in the last few months.
“With the auctions completed recently including J&J Crane Services and TOLSAF, the owners tell the same story, they are looking for their next step in life. JJs wanted to spend more time with his family and mates as did TOLSAF.”
Rob Medill, was the owner of J&J Crane Services, he confirms his reason for closing the yard gates.
“It’s been a tough few years and while we’ve battled through it, the tipping point was a continued lack of quality staff.
“We couldn’t compete with the big companies poaching staff by offering above their worth.”
“Training is critical in this game and because staff shortages are so wide, it became obvious to me that filling a gap had become more important to some than having qualified staff. That’s not how we wanted to do business.”
“I would have loved to have the J&J Crane name continue; but I didn’t have a succession plan as my boys had left the business.”
“Pickles understood how I was feeling about the business and the industry and helped me work through what my path to retirement could look like. Pickles was there at every step and made the sale so easy,” said Rob.
“The value Pickles provided went beyond delivering a sale price. They took the time to ensure I was across everything that was going on and why certain decisions were being made. It felt like a true partnership.
“There comes a time when you need to bite your pride and say enough is enough. Life’s too short to be battling the same battles year-on-year. We are in the thick of a national asset shortage,” he said.
“My advice to other owners is to speak with Pickles Auctions – they’ll help you realise what your future could look like,” he said.
James goes on to discuss his views on how the industry will accommodate these changes, with new companies emerging and existing players getting larger.
“It is obvious that some of the larger businesses are going to get bigger and there’s a new guard emerging including individuals who have been working for these family businesses and deciding now is a good time to back themselves.
“We are seeing this change in other states and there seems to be a lot more happening on a regional basis.
“Industries need to go regenerate, it’s a process that provides opportunities for the younger generations as the older generations take a step back and away from the industry,” he said.
James adds the buyers of these assets are not necessarily crane hire companies.
“We are seeing a lot of the assets being purchased by engineering companies, mining services companies, heavy manufacturing companies and businesses in the quarrying sector,” he says.
“The buyer base is not what you would envisage from a selling perspective.
“The selling base is crane companies, but it’s not just crane businesses buying,” he says.
“This trend is probably as a result of businesses wanting to control their costs of hiring cranes in.
“The one-off investment in owning your pick and carry or all terrain, means they are not having to hire cranes in, and they’ve got the crane at their disposal, all of the time.
“It’s also about reliability too. Some of these businesses are working in remote areas and to hire a crane in is not easy.
“Due to inaccessible roads or bridges, you might have got to float the crane 500km and it’s just not worth it. Handling their cranage in house make total sense,” he said.
Even with his experience across many industries, James isn’t sure when this transitional period for the crane industry will end. He explains there are a number of factors at play.
“It is a difficult situation to judge because there are a number of factors influencing the industry. This transition will definitely slow and stop when asset prices stabilise, but I can’t see this happening over the next 12 months to 24 months and even beyond.
“When you consider the price of a new crane today, compared to two or three years ago, it is now 30% to 40% more expensive. That’s a huge increase and that’s having a massive impact on the used market.
“As long as people are ageing in this industry and they want to get out, the transition won’t stop for the next two, three or four years.
“We saw the same with the transport industry. It started with COVID when everything got tough for everyone. We are now three years since the start of COVID and the transition is just starting to slow down,” he said.
Pickles Auction has handled a number of large crane auctions in recent times.
“Over the last four to five we’ve had a lot to do with the crane including some big auctions like Fullers Mobile Cranes, Sergi and Wagga Mobile.
“We are good at finding buyers for the equipment we are auctioning. We operate active and targeted databases, we are regarded as a trustworthy marketplace, we provide the right advice based on our extensive experience and our ultimate goal is to get the best return for the vendor,” said James.
Pricing of assets is dependent on what type of equipment is in demand at any given time, he added.
“Asset classes are really dependent upon what works are currently happening or in the pipeline for the industry,” James said.
“For example, one month bidders will be aggressively chasing a 60 tonne capacity all terrain, and then two months later they’re ringing us for a 100 tonner. It’s about supply and demand and what used cranes are available in the market.
“Demand has been from all corners of Australia; Tasmania, WA, as well as the East Coast, and bidding is coming from a regional and also a city base. It seems the domestic market will happily pay more on them at the moment, due to the current lack of supply. With some of the older cranes, we’re seeing a fair bit of demand over in the UAE, India and even Egypt,” said James.