Crane cost goes through the roof

With lead times approaching fourteen months, the shortage of mobile cranes in the GCC market is reaching breaking point. And all of this comes at a time when construction activity is at record levels. Zoe Naylor takes a look at the problem and finds an industry in desperate need of a quick solution.

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By  Zoe Naylor Published  December 10, 2005

Component manufacturers are blamed for problem|~|99prod200.gif|~|Mobile shortage: A Liebherr crane in use at Jumeirah Lake Towers in Dubai.|~|The cost of mobile cranes in Dubai has soared by up to 30% this year, while delivery times for some of the larger-capacity models have reached the 14-month mark. The demand has pushed up the price of second-hand kit as contractors and hire companies are willing to buy older cranes to keep up with demand. It is not only the rampant construction activity in Dubai and the wider GCC region that has prompted the shortage. According to a Dubai-based Liebherr spokesperson, the availability of components for mobile cranes is a major contributing factor. “The problem is getting the components in time, such as the engines, steel, hydraulics and tyres,” he says. “They are very specialised and are not made in their thousands everyday. “I don’t think the industry was expecting such a run on this type of components.” Hamid Summer, sales manager for mobile cranes at Manitowoc, agrees: “It’s not our inability to increase our production capacity; it’s our suppliers who are holding us back, along with the manufacturers of componentry.” The shortage of tyres for construction machinery is one of the biggest problems currently faced by mobile crane manufacturers: “These tyres are more or less hand-made; you can’t bake them like tyres for a car,” says the Liebherr spokeperson. “They need a lot of specialised production and a lot of manual work and are not fully automatically produced,” he adds. A compounding factor is that there are only two principle tyre manufacturers that make tyres suitable for the crane industry: Bridgestone and Michelin. “Goodyear produces the size but not the carry capacity, which is essential for the crane operation. Bridgestone is manufactured in Japan and Michelin in France —none are manufactured here in the UAE.” And it’s not just the Gulf’s construction industry that is suffering from a shortage of mobile cranes — the problem is being felt worldwide. “The same is happening in Spain, Portugal, the USA — and especially in the former Soviet Union and in the Eastern European countries like Bulgaria and Romania,” says the Liebherr spokesperson. “A lot of money is now flowing into these Eastern European countries, which leads to a rise in the level of construction activity.” The boom in construction activity worldwide has had a severe impact on the delivery times for mobile cranes. Here in the Gulf region, the wait has reached over a year for some of the bigger models. “Delivery times all depend on what you’re looking for,” says the Liebherr spokesperson. “We have some cranes where you have to wait 14 months or more. “Mobile cranes which are extremely big (eg 500 tonnes and above), you really have to wait for. The 200-tonne category is also very busy, as are the cranes in the 50 to 60-tonne class. For a 30-tonner you’re looking at two months for delivery, whereas 55-tonners are very much in demand and could take around eight months at the moment.” The market is so busy that Manitowoc is already assessing its machine availability for the next 12 months: “I think that by the end of this year and early next year we will have sold production of 2006 and will be talking about availability for 2007,” says Summer. “At the moment we’re looking at lead times of around six months,” he adds. “Traditionally it’s been two to three months, so it’s definitely longer and I don’t see it getting much better.” The trend towards using prefabricated construction components is also pushing the demand for mobile cranes in the region. “Mobile cranes are very fast in putting together prefabricated components, which are increasingly used throughout the Gulf,” says the Liebherr spokesperson. When the prefab components are delivered on low-loaders or jack-up systems, mobile cranes can be used to put them in place efficiently. “This is when you need cranes that can lift bigger loads on bigger radii, and mobile cranes are a very quick and easy solution.” According to Summer, there are noticeable product trends within the Gulf’s mobile crane sector itself: “The rough terrain product was historically the most popular out here because of the terrain,” he explains. But now he says there is a swing in the market away from rough terrain and truck cranes, and more towards the all-terrain mobile cranes with off-road capabilities and the ability to travel on the highway at 75 to 80 km per hour. The manoeuvrability of all-terrain cranes with all-wheel drive and steer allows the operator to crab the machine into tighter corners — if you can get closer to the lift you can use a smaller crane. The mobile crane market worldwide has witnessed a rapid surge in demand over the past 12 months — the shortage in Dubai in particular has been exacerbated with contractors coming from Oman, Bahrain and Qatar to hunt for cranes. One solution could be for the crane manufacturers to raise their production capacity; but according to two of the major players here in Dubai, this is not the answer: they believe much of the problem lies with component manufacturers. Whatever the root of the problem, the fact remains that lengthy delivery times for mobile cranes are making an impact on the Gulf’s construction industry. And in a region where construction projects are planned and executed to the tightest of deadlines, the pressure is on to find a quick solution.||**||

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