Interview: An easier way

More than sixty years of crane and transport industry experience between Jan van Seumeren Junior, John Casteleijn, Bert Timmer and Peter Bon is available to customers of Re-Move. The Netherlands-based company offers a range of services to the crane and heavy transport industry worldwide (IC October 2012, News, page 6).

“We have a new definition for Re-Move: we are a capacity provider,” explains Jan van Seumeren Junior, Re-Move CEO, “If you need capacity you can either lease it, rent it or buy it from us, without operators. You have the operators we have the capacity.”

Another important element of the Re-Move business is a pair of used equipment sales portals, www.Cranes 4Cranes.com and www.Trucks4trailers.com. Re-Move is also an authorised Huisman dealer for onshore ringer cranes, the first crane dealer for the Dutch manufacturer. It offers for sale the CRC range of super heavy lift ring-based cranes (IC September 2013, page 11).

“We are just in cranes and transport. Our target is equipment owners, rental companies in the lifting and transport industry, manufacturers and financial parties. A crane owner normally goes to a crane manufacturer to order a crane and to a bank for financing, in some cases with a buy-back. Then they rent it out, with an operator, to their clients. What you see happening is that the banks are less willing to finance due to all the new regulations and issues we have at the moment in the economy. They have difficulties because it is a capital-intensive business and valuing the equipment is difficult. So they are moving away from this, so that leaves us with our position in between.”

Asset management
On fleet management, in today’s business model buying and selling becomes more important because of low rental rates. “You need a certain book profit at the end of the day to make the whole economic life of the crane worthy of the investment. You cannot only live from the money in rental rates.” Selling your equipment in the right way at the best time becomes more and more important. Factors to consider include the engine issues worldwide and import and road regulations which change regularly, van Seumeren says.

“In the past you would buy a crane, depreciate it in eight or ten years and then sell it and order a new one. Now it can be better to sell it in year five. It used to be that you could have sold it anywhere in the world but now you have to look at which brand it is, what engine it has, is it built to the EN 13000 European Standard? All this will have a bigger impact in future.”

To get the best return on a piece of equipment, in addition to making the decision on when to sell it, other factors include where and how to dispose of it. Van Seumeren explains options, “Traders will buy the equipment far below market value. You can trade it in with a manufacturer but you may get even less, and you have to buy new equipment. Or you can sell it by auction. Auctions are a gamble – what will you get? You know that it will sell but you don’t know for how much and then you still have to pay a fee of 7 to 16 %.”

Another option is to sell it yourself by advertising it. “With advertisements you can get market value but you get hassle, as an owner – you have to have someone to produce the advertisements, use the internet, write quotations and raise letters of credit. Most companies don’t have the people internally to do all this so these are costs.”

Brokers are another option. They copy details of a crane for sale to their website, and start to phone around. A drawback for a seller is that they try to get the price down to increase their margin, van Seumeren says.

Time your sale
Then you have the Cranes4Cranes crane sales portal. “Your crane will achieve fair market value but you need time to sell it.” There is a no sale no fee principle and it is exclusive. “We sign an exclusivity contract so that the owner is not allowed to advertise it himself because we want to have a portal where what you see is guaranteed to be available. It is completely different from all other market places on the internet.”

Van Seumeren continues, “We have low commission of 2.5 %, and we have an incentive if we do well. This gives us pressure to always achieve the best price and it works.” An asking price and a minimum price are agreed and set with the owner. A point he emphasises is that if, for example, an owner wants an asking price of 200 and the market price is 100 he won’t take it on. “We want to be a fair market place, on both sides. We are interested both in the seller and the buyer.”

The experience of the team behind it is vital, van Seumeren emphasises, “We know the crane and heavy transport market. We go out and we actively sell, we don’t just wait for people to come to us. It is a combination of all aspects of our business, with our global network. We can take care of the whole sales process, for example, a letter of credit and arrange the shipping on behalf of the buyer or seller with our partner www.xxtras.nl. Also, commissioning, training, inspection and insurance. It is a matter of trust. That’s where it starts.”

What van Seumeren sees changing is that there will be a lot more buying online. “It will be the future but you need a reliable and trustworthy partner. We go for the market value and try to achieve the market value for the owner, which the owner needs in his current business model. Book value is always higher than the real market value of the asset. There is always a margin, a hidden reserve, that becomes more important for the owner since rental rates continue to fall. That is the big difference that we see happening now, especially related to the engine and the importation issues, everything has significant implications on market value.”

Market value varies widely by geography and may also not be related to the model. A 2000 model year 100 tonne capacity AT, for example, at the moment might be worth quite a lot of money in Asia but in some other parts of the world it is effectively worth nothing because you are not allowed to import it any longer because it is too old. These trends are also changing very quickly, van Seumeren says.

Agreed pricing
A key factor in his company’s model, van Seumeren says, is that the asking and minimum prices are agreed beforehand with the owner, after which an exclusivity agreement is signed so that it can sell for those prices. “You need time to sell a crane. Popular models can be sold within a week while less popular ones can take three to six or even 12 months. The next step will be for crane owners to put their equipment up for sale at the beginning of its life – making all of it available for the right price at any time.”

Another advantage of selling your equipment this way is that, unlike with other methods, you can continue to use it until it is sold. It gives confidence that the machine is operational.

“What we offer is a new concept in a quite conservative industry. It brings together several elements. The best proof of its validity is that we are selling cranes. Most of them are from Holland but the company is now going worldwide.