The project is for the removal and replacement of eight large box girder, radio/cab-operated bridge cranes in the NYC rail car facility: four 30 USt and four 30/5 USt, box girder, 64ft span, Class D bridge cranes with special Class 12 hoist gearing, all with VFD controls and radio and cab back-up.
“We competed with all the major crane builders on the east coast and were awarded the contract after an extensive review of our fabrication facility and the NYCTA having checked our past performance on similar projects,” says David Caputo, sales manager of Capco.
Capco is now well advanced with the design and engineering on the bridge cranes of the NYCTA project and submitting its approval package. This involves completing a turn-key installation of the eight bridge cranes, replacing the power bar electrification in the existing runways, conducting a runway rail survey and installing anti-collision devices on the new bridge cranes.
“Apart from the review and performance check, this project had a bid bond and performance and payment bond requirement,” says Caputo. “As the project is worth more than $2.5m, obtaining a bid and performance and payment bond is no small feat in this economy. But we passed the financial and other requirements with flying colours and secured the required bond.
“Even in a challenging economy, the best companies, like ours, are still competing and winning the most coveted and valued contracts, with reputation for past work being a key factor,” he adds.
It’s a good news story that’s very welcome in the industry because, although many firms are starting to anticipate an upturn in their business, with quotes actually being turned into orders, they are also reluctant to admit they’re out of the doldrums yet. As Gerd Berger, sales/marketing and support manager for Hetronic Malta, says, “the market is still very unstable and forecasts are almost impossible.”
So how are companies fulfilling orders in the current economic climate? Hoist asked five others—manufacturers and suppliers of cranes, hoists and remote controls—how they are converting initial interest into commissions and installation.
Like Capco, industrial radio remote controls supplier Cattron finds itself coming under closer scrutiny by potential customers. Competition is definitely tougher than it was a year or two ago, reports Ian Martin, general manager of Cattron Theimeg UK. “Our customers tend to be heavy industry users—car-makers, steel manufacturers and ship-builders,” he explains. “One difference we’ve found recently is that whereas potential buyers—the engineers, usually—used to have the authority to make the purchasing decision alone, it’s now subject to much greater scrutiny by the procurement department.
“For an initial enquiry to be converted into a sale, it has to have either a safety benefit or a cost-saving return on investment. We actively work with our customers to illustrate that our radio controls provide payback in the savings they give over time. For example, energy is very expensive, and any project that can reduce consumption is likely to be approved.
“We’re currently involved with projects to remotely turn off lighting towers in steelworks. Lights are often left on when not required, and energy wasted, and with RRC one person can turn them off, giving the user a huge energy saving, and therefore early payback on their initial investment within three to six months.
“In this challenging market, businesses are examining what they’re really good at,” Martin continues. “We’ve always specialised in giving the customer a fully engineered turn-key solution. That’s important because, with cutbacks, many companies no longer have an engineering department and rely on outsourcing. Rather than just sell an RRC system, we will visit the site and work with our customers to offer a quotation based on their individual requirements. By being specialists, backed up with excellent after-sales service, we’re actually reducing the amount of competition we have to face.
“For us, the downturn started around two years ago,” says Martin. “I would say the quotation to order ratio was always around 20 to 30%—it was then, and still is. The main difference is that the volume of enquiries was far greater two years ago. We’re receiving fewer now, but those we get are generally of a much higher quality—there’s real interest there—so less time is spent on dealing with enquiries that come to nothing.
“With things being tight economically, a lot of companies are making staff cuts. That’s where radio control systems can help as they generally reduce manpower requirements—so adversity sometimes gives rise to new opportunities.”
Hetronic provides radio remote controls to many industries, with more than 300,000 global installations worldwide. Gerd Berger believes that competition is still becoming stiffer and costs continue to be driven down.
“As a radio manufacturer with plants on four continents, we have always watched our costs and monitored them against actual market prices and profitability. Our policy has always been to drive down costs, but we’re also investing in new technology more then ever before. Our highest growth rates have been achieved with state-of-the-art radios and customised radio controls in the top price range. Such models are expensive to develop but give our customers new (future) technologies that other RRC manufacturers can’t offer. So our way forward is innovation and the incorporation of RRC into the actual machine.”
Not everyone is finding that costs are still dropping, however. Andrew Pimblett, managing director of Street Crane, is among them. “Internationally, there’s no doubt that costs and prices have been under pressure but it doesn’t necessarily follow that prices to end users will be lower,” he says. “This is because raw material costs, particularly for steel, are increasing rapidly now from the very low point they reached at the depth of the recession.
“Overseas, we principally supply hoists, travelling equipment and controls, and our foreign partners tend to be other regional and national crane builders who can fabricate their own structures more competitively locally,” explains Pimblett. “The huge fluctuations in exchange rates over the past 12 months have also affected materials and components cost and product prices in both directions, depending on the currency of the transaction.
“All the indications are that the market bottomed in 2009 and we’re now seeing recovery in most markets including the USA, Canada, Australia and most of the Far East.
“The Euro zone is still having a tough time, but we’ve had a successful campaign to recruit new distribution partners in Europe since the launch of our new ZX Hoist range and are seeing significant sales growth in this most difficult of markets,” he continues. “Nevertheless, all leading brands will continue striving to reduce costs by product development and more effective sourcing. There is already a balancing of supply and demand since many crane producers have massively reduced capacity. Taking the UK market as an example, the closure of the crane manufacturing facility at Morris has boosted Street’s home market sales because many customers want the reassurance of working with a local manufacturer and there is now one fewer competitor.”
Now more than ever, it’s important that the crane industry works closely both with the manufacturers of components such as hoists, crane kits and other major electro-mechanical sub-systems and with the suppliers of sub-components including specialised engineering components such as wire ropes, motors, remote control devices and the electronic components in the control systems.
“As in any other manufacturing sector, price pressure is passed down the line and this can sometimes be a creative process if suppliers are innovative and offer up more economic designs and processes,” thinks Pimblett. “Of course, everyone is looking for alternatives and new suppliers get opportunities they might not get in better market conditions. This pressure to look at alternative solutions in tough times has worked strongly in our favour as many crane builders saw Street as the ‘new kid on the block’ in the hoist and crane kit market.
“In good times they were slightly outside their comfort zone at the idea of switching from long-established partners. Now overseas crane manufacturers are more open to seeing us as a supplier of hoists and electro-mechanical kit. We’ve recruited 15 major manufacturers as partners in the past six months, all of which previously worked with long-established competitors for many years.”
Cooperation with component and sub-component manufacturers is also increasing for Hetronic. “They are now involved at a much earlier stage than in previous years,” says Berger. “Their research and development departments work closely with ours and share costs.”
Any one crane may use wire rope, hoists, remote controls and drives all supplied, originally at least, by different sources. To what extent are suppliers tied to specific manufacturers or builders?
When it comes to supplying remote controls to the industry, few crane manufacturers are tied to only one supplier, says Berger. “In most cases, the control is still considered to be a retro-fit solution, but the trend is towards serial interface solutions that require identifier (OEM-specific) software, as well as being able to take over the whole management system of a crane, for example, overload systems or the black box to store data,” he says.
“The effect of this is that OEMs have to have their specific supplier where all information can be shared internally as well as externally with the supplier.” This creates the challenge of all parties needing to follow the same goal, priorities having to be aligned and commitments as well as costs having to be shared. “But a strong relationship between all parties can overcome those difficulties,” says Berger. “They monitor each other on a daily basis and follow market trends to stay ahead of the competition. In that new business module, the end user is the winner. It’s a purchaser/user market again and not a seller’s market as in previous years. Customer satisfaction is top priority, prices are lower and end users surely welcome and benefit from that.”
Pimblett strongly believes independent crane manufacturers benefit from buying a complete crane kit from a single source. “We offer kits that consist of everything except the crane beam(s) with all electrical equipment terminated by plugs and sockets for easy connection,” he says. “The partner needs no design or manufacturing overhead and simply builds the beam to our drawing and plugs in the components. In terms of achieving the highest gross profit per hour worked, this method wins out compared to building a ‘bitser’ by shopping around for a hoist here and a control system there, with all the indirect costs of making them fit and work together.”
One challenge this may present for the independent manufacturer is that some of the crane kit and component suppliers also compete for end user business. “Like a number of other internationals, Konecranes, for example, competes in practically all world markets for end user crane business and at the same time for hoist and kit business from local manufacturers in those same markets under other brands,” explains Pimblett.
“This is what marketers call channel conflict; they’re trying to sell into both the whole crane and the component markets at the same time. Local crane manufacturers may view some international suppliers with suspicion. This is our opportunity, because markets are saturated with the same product sold under their various brands and the local crane builders have no exclusivity in the parts and service markets.
“This ‘me too market’ drives prices down because there is nothing else to differentiate offerings. Street decided a long time ago not to play this game and we offer good partners exclusive territories in which we agree not to compete or sell to third parties. This creates partner loyalty and allows local crane manufacturers to offer customers something different and to build a strong after-sales service and repair business.
“End users want and need choice. In a free market there will always be those who seek world domination but equally customers will always seek competitive alternatives, and will benefit from competition.”
Street Crane has introduced a number of innovations to help it win new overseas business—for example, the ZX series hoists, which will meet all needs up to 50t safe working load (SWL). It was conceived from the outset as a product for world markets. The hoists are modular and feature standardisation and inter changeability of many components. They are easy to ship in kit form and for the end user to assemble and customise to their needs.
Hoist UK manufactures and supplies lifting and handling equipment to the industrial and entertainment market sectors. Director Paul Jordan says that last year, despite the recession, the company managed to grow its business through the diversity of its products in both its core marketplaces.
“Competition has always been strong within the lifting industry, but the economic situation over the last year has increased the rivalry between manufacturers and suppliers,” he says. “However there is only so far that costs can be reduced without compromising quality and therefore safety. It’s very important for end users and trade companies to select good and well-established products and service providers and not let price be the deciding factor but rather quality, service and back-up.
“Generally component manufacturers will offer crane kits, for instance with components to produce the crane apart from the actual steel work and installation, with the selection of the ‘kit’ being paramount in getting a fault-free system. For example, we offer a full plug and play crane kit from Verlinde which includes all the cabling with simple plug and socket connections, eliminating the need for electrical engineers to be involved, and cutting down on installation time and hence costs—which in turn generates more business.
“Being tied to a specific manufacturer or builder isn’t generally a good idea, even when trying to reduce costs, both for the compatibility of a system and, probably more importantly, a liability and warranty issue,” says Jordan. “Although shopping around for the cheapest supplier of each individual item may give you the best price in the market, when it comes to warranty there are conflicting issues with manufacturers of different items saying their component is fine and the fault must be with another—making the end user’s breakdown a nightmare. Again, using one well-established supplier will make life much more bearable at little extra cost, especially in the long run.
“This is the appeal of the crane kits we supply to the lifting trade, as they give other trade companies access to the best possible price levels using a kit which is complete and ready to be assembled in the minimum time, all from one supplier. To help some of the smaller lifting equipment companies which don’t normally build cranes, we offer a full technical design and support facility.”
Lift Turn Move, of Birkenhead, supplies an extensive range of lifting and handling equipment to industries ranging from theatrical and leisure to logistics and material handling equipment. For managing director John Jones, winning orders comes down to putting a lot more effort into customer service. “We’re having to do a lot of cold calling, visiting, and phoning back a couple of days after receiving an enquiry, to ask if they’re happy with the quote and whether we can give them any more information,” he says.
“We’re doing much more of that than we did two to three years ago. We had become complacent. There was a period of 10 years when things had become very, very easy. Everyone has learned those days have gone. Maybe they’ll return, but we have to do a lot more work now to get orders. As we emerge from the recession, the expectation is that you’ll be able to get the equipment quickly and there won’t be any shortages. But the truth is that people down the line have been de-stocking. We’re seeing now that when someone needs a large stock, it may take six phone calls to get it. The cost is immaterial—the important thing is just to see what’s available and to pay what’s demanded.”
Hoist UK’s Paul Jordan concludes: “In essence, we believe the way to translate initial interest into firm orders in these difficult times is to offer good quality products which are fit for purpose at competitive prices, and to support your customer throughout. There’s a lot of choice in the market, and the selection process today may involve the accounts department rather than the engineering or maintenance department. Selection on cost can save money in the short term, but in today’s economic climate a more long-term approach should be taken.”
Lift Turn Move
Lift Turn Move (LTM) and Litestructures, a specialist in creative aluminium structures, were commissioned to supply a staging, rigging and lifting/control package to Manchester Central Convention Complex as part of the venue’s £20 million redevelopment programme.
The rigging package consisted of over 240m of Litestructures’ LitePro 520mm trusses, orientated in six longitudinal runs down the hall space. The company worked with LTM to specify a computerised hoisting system to minimise working at height within the Central Hall. Utilising 54 LTM Loadguard 1,000kg chain hoists to BS7906: Part 1- Category A standard allows the grid to be moved to a number of positions within the hall without the need for secondary restraint when rigged.
The control system utilises an LTM configured IBEX positional control and integrated load monitoring system on all hoist locations, creating a reliable user interface to embrace the varied requirements of the hall’s users.
