Bought a counterfeit crane through LinkedIn?
If there’s one thing we can say with certainty about the internet, it’s that it has made life a lot easier for scammers and fraudsters. In the world of heavy equipment, that can mean sellers of counterfeit machines and non-genuine spare parts. This can apply to any segment of the construction equipment industry, but the crane sector is a big target, since the items are high-cost and lower volume. And it’s precisely the market segment where safety is most important, which is the main thing compromised if buying counterfeit equipment. Practices vary, but all take advantage of lower manufacturing costs in Asia and the ability to build products to order. One popular practice in the past was so-called ‘cut and paste’ machines, where traders went over to Japan, bought scrap cranes, imported them back to China and rebuilt them with inferior parts and materials, while keeping the original serial number plates and passing them on as original used machines. “These cranes were a massive problem in the market, because of the damage they do to prevailing market rates on genuine machines in the second-hand market,” says Mark Turner, founder and CEO of IndooGoo. “But I don’t think they are as prevalent in the market now as they were and certainly the market is much wiser today, though you’ll still find loads of them advertised on certain sites. “The genuine Tadano and Kato cranes, in particular, are hard to find in the second-hand market. The cranes are so good and hold their value so well, so the first giveaway should be a cheap price shouting out. It’s definitely a case of ‘No such thing as a free dinner’.” In the tower crane segment there is a danger, because counterfeiters can target buyers of mast sections or smaller components, such as bolts or anchors. And while counterfeiters may have access to design plans, allowing them to make their products appear genuine, in reality there will be a host of problems, including sub-standard low grade steel, poor quality welds and a general lack of manufacturing quality control. Counterfeit tower crane components are a serious safety hazard on a construction site, and are often not detected until after an accident. To avoid the possibility of contaminating their stock with counterfeit parts, buyers should stick to recognised suppliers, including the manufacturer, and avoid buying parts online from unknown suppliers.
“We sold a large selection of construction and rental gear this year, and prices exceeded our expectations. While at the auction, we saw bids coming in from Latin America, the Middle East and all over the United States for our gear. Ritchie Bros. has the ability like no other to reach buyers from all around the world.” As one of the oldest industrial auctioneers, and now the largest, Ritchie Bros. has seen its percentage of online buyers rise steadily. Last year, it attracted record online bidder registrations and sold approximately $1.4 billion of equipment, trucks and other assets to online bidders, making up 37% of its total sales of $3.8bn. This year the company celebrated reaching $1bn in online sales in September, a month earlier than in 2013. There is no doubt that the internet is a growing presence in our lives, and usage in the Middle East is growing faster than anywhere else in the world. But as far as purchasing goes, while we may be comfortable buying books on Amazon or searching for used exercise equipment on Dubizzle, second-hand construction equipment is something different. Inspecting second-hand machinery for wear and tear, checking oil for impurities and looking for tell-tale signs of repair work are vital parts of the buying process. Most buyers want to climb under a machine and get their hands dirty. IronPlanet is an online-only auction house for construction equipment. It was founded in 1999, which makes it part of the internet’s old guard – older than Facebook, LinkedIn or YouTube. Jeff
Jeter, President of IronPlanet Americas, told CMME that the site has spent a significant amount of time establishing a large “buy-base” – the base of bidders and buyers necessary to ensure sellers receive a competitive price, which in turn attracts more sellers. It’s something which doesn’t happen overnight. “The two have to work in tandem. You have to bring up both simultaneously to bring good pricing.” Their solution to the off-line problem of machinery inspection is to employ a large number of inspectors (more than 200), who thoroughly examine equipment at a seller’s location and then publish the inspection reports with photographs. Inspectors can take wear-related measurements and even oil or fluid samples for lab analysis. For inspected machines marked “IronClad Assurance”, if a buyer finds that the machine doesn’t match its inspection description, they can make a claim for a refund of the machine price and transport costs, or receive a settlement (though there is a excess for registering a claim, and it must be done within one day of receiving the machine).
IronPlanet Americas President, Jeff Jeter, believes that the company’s solution of inspecting the machines and providing an assurance for the published inspections has been a key differentiator in the market place.
November 2014
CONSTRUCTION
MIDDLE EAST
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