A Young CTL Market Heats Up Again

By Frank Raczon, Senior Editor | October 23, 2015
A Young CTL Market Heats Up Again

After a decade-long ascension interrupted only by the Great Recession, the compact track loader (CTL) is once again a hot machine category.

Manufacturers are seeing a healthy market with sales spurred by the CTL’s versatility, particularly over the skid steer loader.

Cost of Ownership

Oper. Weight Avg. Price Hourly Rate*
To 700 $24,515 $15.38
701-975 $25,560 $17.99
976-1,250 $36,338 $21.39
1,251-1,350 $40,352 $29.33
1,351-1,600 $42,623 $28.34
1,601-1,750 $47,493 $32.67
1,751-2,200 $53,354 $35.55
2,201 & over $66,987 $40.76

*Hourly rate represents the monthly ownership costs divided by 176, plus operating cost. Unit prices used in this calculation: diesel fuel, $3.46 per gallon; mechanic’s wage at $52.33 per hour; and money costs at 2.125 percent.

“The CTL market appears to be up right now,” says Ashby Graham, global product manager for skid steers and CTLs, JCB. “The skid steer loader market is relatively flat, but CTL sales have risen by approximately 30 percent. We feel that CTL sales are up because customers are finding more ways to use these machines in the field, and that gives them better return on their investments,” she says. “We’re still seeing good demand for both tracked and wheeled machines; however, we are currently selling more CTLs than skid steers.”

Data from equipment managers reveal CTL acquisition and management trends.

Though it may be hard to admit for OEMs who have made a living selling both categories, even a newcomer to the market sees the trend.

“We are seeing the CTL market continue to chip away share from skid steers,” says Brent Coffey, product manager, loaders, for Wacker Neuson. “Contractors are seeing additional advantages of the CTL as a versatile machine that can operate on paved surfaces, in the dirt, in sloppy conditions, and on turf. The take rate continues to gradually rise for the CTLs and comes at the expense of the skid steer loader.”

Dave Steger, product manager at Takeuchi, agrees. “Generally, the market is up, due largely in part to housing starts. The CTL market continues to grow, and at a greater rate than skid steers. This is due to the single machine versatility and performance offered by the track loader.”

Kubota, which entered the CTL market before tackling skid steers, seems to have adjusted its strategy to market realities. “We’re just now getting into the skid steer market, but we expect our skid steers to complement our compact track loader line in terms of price point, weight and size,” says Jorge De Hoyos, senior product manager and a veteran of both categories from his New Holland days. “Our SSV65 and SSV75 are priced below our compact track loaders, of lesser weight, and of shorter widths.”

John Deere Construction & Forestry skid steer and CTL product marketing manager Gregg Zupancic reports that the industry for CTLs over the last 12 months is almost 40,000 units, barely eclipsing skid steers, but, more notably, putting both categories at a 1:1 ratio for the first time. “If you had asked me even as little as three years ago, I’d have never thought we’d have achieved a 1:1 ratio between the two because of the extra expense versus a skid steer,” Zupancic says.

Case Construction Equipment brand marketing manager Warren Anderson thinks the skid steer’s collective bleeding may have stopped. “Industry CTL sales for 2015 are currently up 20 percent from where they were at this point last year. The difference this year is that they are not cannibalizing from skid steer sales,” he says. “Skid steer sales remain flat for 2015, whereas they had been down each of the last two years as CTLs gained more interest.”

When it’s time to make a purchase decision, managers will find more than a dozen manufacturers to sort through, as well as varying sizes, specs and features, not to mention continued temptation from the skid steer.

“Once you’ve narrowed down the machine based on some basic specs such as width, height, weight, lift height and capacity, consider what other features would help make the operators safer, more comfortable and more productive.” says Caterpillar’s Kevin Coleman, senior marketing engineer. “These can include a rearview mirror, rearview camera, a high-back, heated seat, one-piece sealed and pressurized cab, operator-specific machine settings, ride control, and return-to-dig.”

De Hoyos feels power is important—now and for the future. “Engine horsepower is a key consideration when purchasing a track loader,” he says. “Also, it’s important to select the machine that will not only manage the needs of current applications, but one that ensures enough power and capacity for future growth. Consider that on average, a CTL with a 5,000-pound lift capacity requires 70 or so horsepower.”

JCB’s Graham hones in on applications and size. “Fleet managers should consider the different types of applications for which their CTLs will be used and the weight of the loads the machines will be required to handle,” Graham says. “A machine can always pick up a lighter load than the one for which it’s rated. But, if you try to pick up a load that’s too heavy, the CTL can become unstable and unsafe. Upsizing to a larger machine allows operators to carry heavier loads—and more material at once—and run larger attachments. This leads to jobs being completed faster. Operators who can perform jobs in less time can perform more jobs overall, ultimately leading to greater profits.

“That said, a larger machine with a higher rated operating capacity will be more expensive,” Graham continues. “Fleet managers should also consider any towing issues and job site limitations. Larger machines may require an investment in a dedicated trailer to haul it. And, if the machines will most often be used in smaller areas, like backyards, larger models may not be able to squeeze between buildings and fences.”

Anderson suggests a clear line between the CTL and skid steer choice.

“It’s all about the surface you’re working on,” Anderson says. “As with any machine, the bulk of its costs will be wrapped up in the undercarriage. CTL undercarriage owning and operating costs increase significantly when those tracked machines are operated on paved or concrete surfaces. The vibration and abrasion on those tracks is a killer and can be costly over time. If you are a fleet manager tasked with buying numerous machines, take a 30,000-foot look at how those machines are utilized. If 80 percent of their use is off-road and 20 percent of their use is on paved surfaces, consider splitting your purchase up between skid steers and CTLs. Focus the skid steers on pavement, the CTLs for off-road.”

How managers react to the daily grind of off-road work is the key to controlling costs.

“Whenever possible—at least once a day—clean mud and debris such as rock and gravel out of the machine’s undercarriage to minimize unnecessary track wear,” says Gregg Warfel, district sales manager for Terex. “The undercarriage is the most costly part of any tracked machine. It can make up almost 20 percent of the machine’s purchase price and nearly 50 percent of its maintenance cost. Such valuable components should never be neglected. It’s extremely important to keep the undercarriage clean. This helps to ensure longevity of its components and keeps operating costs down.

“Check the track tension with a walk-around or inspection, and tracks should be tensioned according to the operator’s manual,” Warfel says. “Running a track too loose can lead to damage or possible derailment, and running a track too tight can lead to premature wear of other undercarriage components. Tracks that are too tight can cause excessive roller and idler wear and can tear the tracks.” Managers also need to be aware that individual operators can have a big effect on CTL wear, and subsequently, costs.

“The most common cause of premature machine, particularly the tracks, failure is from operating technique,” according to Warfel. “Many operators run their compact track loaders as if they are skid steers—skid steer operators do a lot of counter-rotating and spinning the tires to get the bucket filled to maximum capacity. Compact track loaders have enough traction that the tracks do not need to spin to fill the bucket. If the tracks are spinning, and the machine is staying still, the loader’s track life will be greatly reduced. This comes into effect even more when contractors are operating on a rough underfoot condition.”

Warfel offers these operating tips for managers to impart to their operators: Utilize three point turns to produce minimal ground disturbance; on inclines, do not make sudden changes in direction, move slowly, and always carry loads low to maximize machine stability; maintain a 90-degree angle with a transition, such as a curb or a ledge, and make sure that both tracks are fully supported by the ground; and keep material in front of the loader—work the pile from the sides and then the middle to reduce the amount of material getting into the tracks.

Also, don’t forget about fuel, even though today’s diesel costs are down and CTLs are small machines. “Encourage operators to turn off the machine or lower the engine throttle when they are waiting,” says Christopher Girodat, Bobcat marketing manager. “Over the course of a day, this time will add up and lead to significant fuel savings for managers.”

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