Renters and Buyers Keep Telehandlers Flying High

March 25, 2016

Telehandlers stand out among the mobile machines Construction Equipment covers in that they are rented much more than owned (and may be spec’d differently), but there are common threads among rental operation purchasers and contractor buyers that keep manufacturers on their toes.

JCB reports that upward of 70 percent of all telehandler sales have gone into rental over the past 3 years. That figure includes both independent rental companies and dealer-owned rental fleets.

Cost of Ownership

Size Class (MTons) Avg. price Hourly rate*
To 2.1 $58,850 $28.34
2.2-2.70 $70,216 $29.37
2.71-3.0 $85,018 $36.52
3.1-3.5 $100,211 $44.46
3.6-3.9 $105,464 $44.81
4.0-4.4 $107,228 $41.40
4.5-4.9 $126,289 $49.33
5.0 and over $185,499 $76.61

*Hourly rate represents the monthly ownership costs divided by 176, plus operating cost. Unit prices used in this calculation: diesel fuel, $2.78 per gallon; mechanic’s wage at $52.33 per hour; and money costs at 3.75 percent.

Caterpillar product application specialist Mike Peterson offers similar numbers. “For the North American market in any given year, the industry is approximately 80-90 percent rental and 10-20 percent retail,” he says.

“The telehandler market in North America remains strong and active even with the downturn in the gas and oil industry,” says Steve Kiskunas, product manager, telescopic handlers, Manitou Americas. “Rental companies continue to replace equipment in their fleet to reduce the average age of their equipment following a hold on new equipment purchases during the economic downturn. This re-fleet process has continued over the last four years. We also see signs that construction activity overall will continue to be at a high level through 2016, which we expect will also support telescopic handler demand in rental and retail.”

Stuart Fox, JCB’s material handling product manager, cites a possible downturn in rental operation purchasers.

“The market is largely flat year over year, which should continue for 2016 with a good chance the rental market comes down as a result of mass replenishing of fleet over the past couple of years,” Fox says.

Pettibone’s product manager for telehandlers, Bob Mayo, uses specs to point out what he sees as the most popular size classes. “The lift capacity and the reach, the market continues to favor 8,000 to 9,000 pounds with 10,000 to 12,000 pounds capacity a close second, as well as slightly heavier. The 50-plus-foot lift height tends to be a big mover,” Mayo says. “Considering standard palletizing, the reach and lift heights are important, but they’re not the only driver in buying decisions. With standard palletized loads, the 4,000-pound capacity at those lift heights and 2,000 pounds at reach, are key.” Pettibone launched three new Tier 4-Final models in February, joining two released in 2015.

Uncertainty over Tier 4-Final emissions technology and its maintenance could still influence buyers of any stripe. As the industry has seen with backhoe loaders and skid steers, a number of telehandler manufacturers have repowered or introduced specific models to occupy the 74-horsepower niche—the level at which engines don’t need DPFs and accompanying regeneration. Skyjack and Genie introduced such machines at World of Concrete and The Rental Show.

“We also expect that with Tier 4-Final in full bloom we will see some customers reluctant to dive into the new technology right away,” Fox says. “However, we do expect a solid year for housing starts, which may force rental companies to add to their fleets to meet the demands of their customers.”

Manufacturers stress there are some differences between rental customers and fleets purchasing telehandlers outright.

“Our rental customers are looking to maximize their ROI with their machines, therefore they tend to order machines absent of bells and whistles, whereas you’re more likely to see owner-operators among contractor buyers, and these customers tend to appreciate more features in their machines,” Fox says. “Contractors also tend to be more brand loyal, so gaining new business among these customers can be more challenging than the rental customers who like to diversify their fleets.”

Brian Boeckman, JLG’s global product director for telehandlers, agrees. “Rental buyers are focused on acquiring assets that have high utilization rates and offer low cost of ownership throughout the life of that asset. Some contractors are owner-operators and they may desire a higher level of product specification to suit their particular needs, or to provide them with a greater level of comfort throughout the day.”

Last year, for the first time, JLG made air conditioning an OEM option on its SkyTrak brand.

“While each of the buyer’s needs align with handling and placing a load, contractor buyers tend to use the telehandler as a critical piece of their production, thus depending on the local dealer to a greater extent for the ability to provide parts and service support,” Peterson says. “As projects often cross dealer coverage areas, we’ve found that contractors appreciate a certain level of consistency in the responsiveness and support they receive.”

Anders Mantere, engineering manager for Terex Aerial Work Platforms (Genie), breaks buyers down a little further. “There’s a difference between owners, as well. You have owners of large construction companies that buy machines, they’re looking for similar things that a rental company looks for. If you’re an owner-operator, that’s a different story. They’re looking for comfort as well and not just reliability. You’ve got to distinguish the owner operators from the general owners, as well,” he says.

“Universally what they’re looking for is a machine that has value throughout the life of the machine. They’re looking to compare acquisition price, maintenance costs, service costs, and residual value,” Mantere says.

Regardless of the type of buyer, certain features and attributes are hot.

“Within the last few years, more and more contractors are using telescopic handlers with suspended loads,” Kiskunas says. “[Manitou brand] Gehl has provided the option to add boom-tip lifting hooks to all our current production telehandlers above the RS6-34 size. In addition to providing the physical hook with a positive retention method, operators’ manuals are updated with the correct procedures for suspended loads.”

In 2015, Genie made lifting shackles standard on its machines. “What that allows you to do is sling or rig a load, which wouldn’t be allowed if you had a standard carriage,” Mantere says. “We’ve elected to put our lift shackle right underneath the quick attach, in the very front of the machine. If you take off the carriage, it essentially becomes a miniature truss boom.”

Caterpillar’s Peterson says rear cameras and reverse object detection have been areas of interest for his customers. “Regardless of whether it is the high-boom pivot design popular in North America or the low-boom pivot design that is standard in the EU, visibility to the rear of the telehandler can be challenging,” he says. “These two options increase the capabilities of the operator to have a clearer understanding of his or her surroundings, and to operate the telehandler in an efficient manner.”

As Caterpillar is transitioning its C Series models to the D Series to accommodate Tier 4-Final, it is offering a rear camera and reverse object detection system as options.

JLG has also seen the trend. “Our reversing camera and reverse sensing systems are becoming very popular options,” Boeckman says. “These systems provide operators with a greater level of confidence when operating the telehandlers and provide owners a means to limit damage to equipment and materials on the job site.”

Genie also has introduced a rear proximity alarm, with visual and audible alerts, as an option for 2016.

As operators are getting more creative with telehandlers, attachments are another growing trend. “Manitou Americas offers over 42 different types of attachments,” says Kiskunas. “These attachments range from tire handlers to three-hook jibs and below-grade work platforms. One way to look at the usefulness of a telescopic handler is to view it as a self-contained four-wheel drive all-terrain power plant with outstanding range of reach for whatever work tool that is needed for the job.”

 Both rental operations and fleet managers looking to keep operating costs down should key on maintenance.

“This may sound like an ‘old school’ answer, but as much as construction equipment has changed over the years, one thing still remains the same,” Kiskunas says. “Telescopic handler owners interested in keeping their equipment in top operational function and safeguarding their investment from unplanned equipment failures need to have an active preventive maintenance program. This is the most important thing that owners can do to keep their equipment running in top shape.”

Genie’s Mantere concurs. “Maintain your engines in good working condition, especially with Tier 4-Final engines,” he says. “With the emissions controls in the systems, you have to maintain the machine; you can’t skip oil-change intervals, and it’s really important to make sure your fuel stays clean. Boom maintenance is also important. We have wear pads in the booms. Make sure you check them. If you run them down, you risk damaging the boom with downtime as a result.”

Because telehandlers are highly maneuverable machines executing lifts at height, they add unique safety concerns to the job site. Manufacturers have added many features and safeguards over the years, but they’re not done.

“As manufacturers, we are always looking at ways of making our machines more safe, and that will never change,” JCB’s Fox says. “Potential safety features we may see become more prevalent in the future include load moment indicators—which is load-sensing boom lockout—required technology in Europe that may make its way to North America, boom nose-mounted camera systems, remote-controlled machines, and interactive digital load charts.”