A Year to Reload

The small machine business was an ominous equipment sector in 2009. The skid steer is the bedrock utility machine in the North American compact equipment industry (popular in markets from general construction and landscape to municipalities and farmers), but brands from Bobcat to Volvo had a tough time selling new loaders last year. 

Almost 18,000 new skid steers were sold year-to-date up to October 31, 2009, and that figure was 51 percent lower than at the same point in 2008. Most indicators and forecasts point to further declines in 2010 unless the housing market experiences a strong turnaround.

Most of the manufacturers we surveyed (Volvo, Bobcat, Caterpillar, New Holland, Komatsu, Case, Terex and Gehl) noted that final 2009 numbers would probably be in the 22,000 range for skid steers sold in North America, with sales numbers expected to be flat in 2010. Most think about 9,500 compact track loaders (loaders with dedicated track undercarriages) were sold in North America in 2009 (with a hey day of 22,000 sold in 2005); track loader sales numbers are expected to be flat in 2010 compared to 2009 as well.

Last year was tough for manufacturers and contractors alike (no argument there), but 2010 is the time to start looking forward. The American industry has 14 strong brands of skid steers and track loaders — Bobcat, Caterpillar, Gehl, Mustang, New Holland, Case, Komatsu, Terex-ASV, Volvo, JCB, John Deere, Rayco, Takeuchi and Thomas Equipment — and that’s a sign of a robust and healthy sector. Traditionally, skid steers would sell 50,000 to 65,000 units a year, making it the American choice for compact loaders and tool carriers, with an enormous amount of versatile product offerings. Today more than ever, companies are creating expansive product lineups, high-tech features, unique attachments, luxury cabs, extra services and great financing options for contractors looking to buy a skid steer or compact track loader.

“It’s no secret businesses are struggling to survive these tough economic times. Many businesses are taking some time to reevaluate their current strategies and develop new ways to grow while saving money,” explains Greg Warfel, divisional manager at Terex Compact North America (now the owner of the Terex-ASV line of track loaders). “We continually work with our distributors to better understand the customer’s needs and put together financing and sales programs that meet those needs. In 2009, we offered seasonal financing programs, such as the Snow Sales Program and the Customer Choice Program, that were very popular. We plan to run financing programs in 2010 that offer similar benefits to what made our 2009 programs so successful.”

When times are tough, companies aim to create a product and service so good that people will pay for it even with hordes of competition, in a bleak recession. In 2010, manufacturers in the machine world are ready to convince customers, more than ever, that their product is the singular choice in a big sea of potential players. That’s good news for you — the contractor.

Over these next five pages we will not only discuss the ins and outs of the skid steer and track loader markets, but we will also detail the products of key brands while giving advice and insights into the major market players in the little loader industry. Because this downturn won’t last forever, 2010 is the time to start calculating new moves in successful contracting.  

“As the business climate starts to improve, it would be worthwhile to evaluate how you will meet your equipment needs as work starts going again,” muses Todd Lynnes, product solutions manager for compact construction equipment at Caterpillar Building Construction Products. “Rental may be a way to meet equipment needs while minimizing capital outlay and risk as the work load increases to a point a machine purchase makes sense. Properly maintaining your equipment can significantly reduce operating costs and improve resale values of your equipment. Talk to your dealer about customer support agreements and maintenance programs they offer and about different financing options and leasing programs aimed at conserving capital or improving cash flow in 2010.”

The Compact Loader Lowdown

After 50 years, the skid steer is one of the most recognized pieces of equipment on the construction site, landscape project, farm or rental yard. Skid steer loaders and their track loader cousins have a multitude of models, power configurations and size categories. With their ability to use hundreds of different attachments on a universal quick-attach plate, skid steers and track loaders have become the prototypical “tool carrier.”

Today’s loaders are categorized by rated operating capacity. For skid steers, operating capacity is calculated by considering 50 percent of the tipping load (tipping load is the capacity at which the rear wheels lift off level ground); compact track loaders are calculated at 35 percent of tipping load because of the their track undercarriage. Today, operating capacities for skid steers range from 600 to 3,700 lbs (track loaders range from 500 to 2,660 lbs). Typically, bigger units over 2,000 lbs are considered “heavy lift.” AEM recognizes nine classes of skid steers worldwide. Today, the most popular class is the 1,750- to 2,200-lb size machines (in the price range of $25,000 to $29,000).

“Customers have been slowly migrating to larger size loaders, with more power, performance, lifting capacity and lifting height — ideally to get into larger trucks today,” says Kelly Moore, product manager for Gehl (who has nine models of skid loaders and four models of track loaders). “Customers are looking for more performance and also a comfortable operator station.”

Many of today’s skid steers and track loaders are much larger than their previous counterparts, engineered with longer wheelbases, bigger cabs and more powerful engines. The first 1000 Series skid steer from Mustang Mfg. barely boasted 30 hp. Today the largest Mustang skid steer — the 2109 — boasts a 99-hp diesel engine and a whopping SAE-rated operating capacity of 3,850 lbs. Sister company Gehl Co. also manufactures that same model as the 7810 Gehl skid steer — the two models are the largest skid steers you can find on the market today.

Along with bigger and more powerful units come a variety of small and medium size skid steer models as well. Take Bobcat for instance, which has seven models of track loaders to choose from and 13 models of skid steers, including its tiny but tough subcompact S70 unit, which is only 6 ft tall and 3 ft wide — the ideal size for scooting through narrow doorways, corridors, aisles, alleys and gates, and for working under low ceilings. Terex ASV offers an exclusive track loader only lineup with seven models (the most in the industry), including the company’s PT-100 model with its 99.9-hp diesel engine and Posi-Track suspended undercarriage technology; there’s also a special forestry PT-100 engineered for the comfort and power needed in severe brush cutting operations. Caterpillar currently sells 10 models of skid steers, three models of compact track loaders and five models of multi terrain loaders (a differing style of track loader with a unique suspended undercarriage).

The point is that today every manufacturer has a sizeable selection of models. It isn’t just a skid steer or track loader anymore — it’s a tool carrier, it’s a digging machine, it’s a pallet fork unit, it’s a stump grinder, it’s an air-conditioned working environment with satellite radio and joysticks. If you survey the compact loader spectrum, you will find a little of everything, especially when it comes to posh new cabs. Over the past two years, Bobcat’s M Series and Caterpillar’s C Series skid steers and track loaders have launched new levels of brawn and comfort — with super-quiet pressurized cabs, new levels of hydraulic and engine power, extreme efficiency features and numerous seat, control and cab options. The rest of the industry isn’t sitting idle either.

“The most visible change in recent years and today’s line of New Holland Construction skid steer loaders is the cab and operator’s environment,” says David December, marketing manager for New Holland, which offers three compact track loaders and seven skid steer loaders today. “Marking the 35th anniversary in August 2007, New Holland Construction introduced a new deluxe cab design for the Super Boom skid steer loaders [models L150 through L190]. The deluxe cab features increased space, visibility, operator comfort and ease of operation for greater worksite efficiency. The cab interior features full-covering, noise-absorbing trim for an even more comfortable, quieter place to work. Available as an option, an additional sound-suppression package reduces noise levels by up to three decibels from the operator’s station for an even quieter cab.”

Moving out from the stylish interior, you’ll find today’s skid steers and track loaders have two main types of boom configurations — radial and vertical lift. These different booms are engineered to work in different types of applications for different types of contractors. Radial is often referred to as the conventional style boom design, being the first pattern developed. In a radial boom pattern, the boom pivots on one joint as it moves up, naturally radiating — moving backward — as the load arm is raised into its full position. Radial lift machines have traditionally been used as digging machines or tool carrier skid steers.

Vertical lift style skid steers and track loaders are the other major boom style. These machines specialize in load-and-carry operations, getting good lift capacity by keeping the load close to the machine while the boom of the loader rises. Vertical lift machines have an additional linkage that allows the boom to pivot on more than one joint as it moves up, giving it a true, perpendicular, to-the-ground movement. This style is great for high loading, especially into trucks. Choose a style that suits your needs.

Hydraulic horsepower will be operating the rising and falling of your bucket and boom and fueling the attachment. Better hydraulic drive motors, hydraulic pumps and auxiliary hydraulics have given today’s machines more oil flow to operate larger loads and bigger attachments. The rise of high-flow hydraulics has taken compact loaders and made them kings of attachments. Regular flow hydraulics for skid steers and track loaders range from 19 to 23 gpm, depending on the size and power of your unit. With high-flow hydraulics, you can get up to 40 gpm. High-flow hydraulics give that customer more opportunities to run bigger and more efficient attachments — whether it’s a massive cold planer to strip asphalt, a serious stump grinder to remove old trees or a large wood chipper attachment to dispose of the debris. There are as many attachments as applications on the market.

“Bobcat offers more than 80 attachments for its compact loader line, many of which are unique and designed for specific jobs,” says Mike Fitzgerald, Bobcat loader product specialist. “One example would be the Bobcat forestry cutter attachment, a powerful attachment that takes trees and underbrush from unsightly overgrowth to mulch in minutes. The forestry cutter is being used by contractors in land clearing and site preparation work. It is also finding contractors new business, such as maintaining right-of-ways for departments of transportation. The attachment has also been put to work in more specialized applications like clearing inspection lanes for forestry companies.”

That’s the great thing about skid steers and track loaders. Because they’re the ultimate utility machines, you can use these loaders in a plethora of markets. By investing in a compact tool carrier, a contractor can diversify his or her business with a fleet of attachments, and manufacturers see new sectors expanding in 2010.   

“There is a growing popularity with lot clearing, landscaping and high-performance attachment applications,” explains Pressley. “There is also continued popularity within the industrial and specialty sectors. Due to the machines’ compact structure, they continue to grow in popularity along with specialty attachments for working indoors if properly equipped [considerations include diesel scrubbers, catalytic mufflers, enclosed cabs with A/C]. Barge applications along the Gulf of Mexico continue to grow in popularity. Machines are craned into position inside of barges, around grain elevators and used for cleaning and loading where larger machines may not be able to maneuver.”

Find an untapped market, and a skid steer or track loader can probably spearhead or support crews in their operations. While the industry right now is slow, the compact loader sector is evolving. Companies are providing plenty of product options for buyers, regardless of industry, and today there’s a loader tool carrier manufactured for every contractor — big, small, powerful, agile, basic, fast, cheap and even ones with heated cabs, radios and opulent workspaces built for the next set of contracting kings.    

Keith Gribbins is managing editor for Compact Equipment, based in Peninsula, Ohio.

Migratory Machines

Mike Fitzgerald, Bobcat Loader Product Specialist, Talks New Markets  

Contractors are always finding new markets and applications for their compact machines, especially as they look for new revenue streams. Compact loaders are a popular choice for many applications because of their versatility, maneuverability and dependability. For example, landscape contractors that own machines for their design-build, maintenance and other operations will often use their machines during off seasons for snow removal, providing another revenue source when the machines might otherwise sit idle.

With the purchase of an attachment like a silt-fence installer, a contractor who already owns machines for other work, such as site prep, can handle other applications on their own, including erosion control, without the need to hire additional subcontractors.

Compact loaders are also popular choices for municipalities and facilities to have in their fleet. One compact loader, paired with any one of dozens of attachments, can handle a variety of applications that might normally have to be hired out. A hospital grounds maintenance crew, for example, could perform snow removal operations in the winter, landscaping in the spring and summer and routine site cleanup all year round with a compact loader. A city’s street crew can use the machines in a variety of operations, such as road patch work, without the need to hire additional contractors. Attachments such as breakers and planers that handle the work can be rented as needed or can quickly pay for themselves from the money and time saved because the city crews doing the work on their own.

The use of a compact loader is endless as contractors find new applications that they can handle on their own or as they search for new revenue to bolster the business. With numerous attachments available on every model of Bobcat compact loader, a contractor can easily explore new markets and tackle many tasks that normally would not be possible with a larger, less versatile machine.  

Hey, It’s New to You

Todd Lynnes, Product Solutions Manager for Caterpillar, Steers Toward Used Loaders

First off, consider both the brand and the dealer selling the used machine. This is important because a used machine will require service and parts at some time and when it comes to servicing the machine you want to know that there will be 1) parts available and 2) a dealer that is qualified to service the machine. Many dealers selling their own brand of used equipment (Cat dealers selling used Cat) will offer certified used programs for machines that meet certain specifications. These machines will often include detailed inspections, maintenance history and a limited warranty. Otherwise consider these 15 factors:

1. Check to see if the machine is under an extended service contract or protection plan that can be transferred.
2. Test drive the equipment to ensure all systems are operating properly.
3. Ensure the hour meter is working and indicates the true machine hours.
4. Check to ensure all gauges are working properly.
5. Make sure the machine drives straight and has good power when loading or pushing.
6. Ensure the engine doesn’t blow smoke or vibrate excessively.
7. Do the controls respond as expected and are they in good working order?
8. Check the auxiliary hydraulics to ensure that system is working; hook up a hydraulic work tool if possible to test the system.
9. Ensure that the work tool coupler is not damaged and can be hooked up to a bucket or tool with the coupler pins properly engaged.
10. Inspect the product for leaks — key areas to look at are engine, implement valve, hystat pumps, drive motors and lift cylinders.
11. Inspect the lift and bucket linkages to ensure that the pins are not worn out and have been maintained properly.
12. Inspect the main frame and lift arms for visible cracks. Inspect the roll over protective structure (ROPS) to ensure that it has not been modified in any way and does not have any visible weld repairs or cracks.
13. Ensure that all safety devices, guards and equipment are on the machine and in proper working order. Make sure the original Operation and Maintenance Manual is still in the machine or is available.
14. Check that all fluids are at recommended levels and proper maintenance intervals have been followed by the Operation and Maintenance Manual. Low fluid levels, leaks, un-greased pins and dirty air filters may indicate the machine has an issue or has not been properly maintained over its life.
15. Inspect the tires on skid steers or undercarriage components on track machines to ensure that they are not damaged or excessively worn. This is especially important on a track machine as rubber tracks and undercarriage repairs can be significantly more expensive than just replacing tires.

Getting Under the Carriage

David December, New Holland Marketing Manager, Talks Tracks

The undercarriage on a compact track loader is often most affected by tough applications and conditions. The undercarriage is as important to the machine as the attachment or engine as it is the combination of components that brings the machine to its assigned task. Without the undercarriage a compact track loader can do limited work, similar to a car with flat tires. The undercarriage is made up of rollers, idlers, sprockets and track chain that transport the machine throughout its working life. As wear items, these components wear out over time. With proper maintenance and normal use their life should be reasonably long, but with poor maintenance and rough operation their life expectancy will be less.

Compact track loaders are very responsive when compared, for example, to mini excavators and small dozers. Their response is very similar to a skid steer loader. As a result, most new operators tend to operate compact track loaders much like a skid steer. In New Holland’s compact track loader operating guide, we recommend the following to help extend the life of the undercarriage and belts to improve operating costs. These tips are common for all compact track loaders:

1. Minimize 360-degree rotations from a stationary position, when possible.
2. Avoid driving sideways on a slope.
3. Hard surfaces like concrete and rock will accelerate the wear on belts.
4. Most importantly, clean undercarriages at the end of each workday.

Taking the time for daily inspections and proper maintenance to repair/replace the individual failing parts before they affect other components will extend the life of the undercarriage and save a significant amount in replacement cost and downtime, which in itself is lost revenue.

Serious Dealers

Buying the Right Machine Is About Building a Relationship with a Brand

Volvo

Volvo CE’s distribution network provides a partnership that champions quality, safety, longevity and service capability. A Volvo CE dealer can service an MC60B skid steer or a 70-metric ton EC700 excavator and anything in between. In times like these, it’s comforting to know that you have one of the world’s most well-known brands backing you up — one whose roots go back to 1832 — standing by the product and able to withstand today’s economic storms. Who do you want to partner with in times such as these?

Bobcat

Bobcat already offers the largest dealer network in the compact equipment industry with more than 500 locations in North America. A contractor can benefit from the Bobcat dealer network in many ways. One advantage is the years of experience many of the dealerships and staff have. Bobcat invented the compact loader market more than 50 years ago and Bobcat dealers have years of experience with the industry and products. Bobcat dealers offer a top quality sales force, dependable parts department, rental opportunities and qualified service technicians leading to a quality total customer experience. And, with so many locations spread across North America, it is easy for a contractor to find a local dealer, which makes for quicker and more personalized service.

Caterpillar

Caterpillar has a strong dealer network that covers all 50 states in the United States and Canada. It is very important to have a dealer that has the financial strength to weather the changes in the market and continue to provide the level of service you expect and need to run your business. It is also important to work with a dealer that can provide solutions for all aspects of your business, not just new sales, such as rental, parts and product support services. Caterpillar dealers provide all of this as well as a product range that expands far beyond that of just compact equipment to meet your needs as your business grows.

Gehl

Through training and effective marketing programs Gehl dealers are product experts and can offer a vast knowledge base about the Gehl brand throughout their respective sales areas. With that, consumers can benefit with knowledge gained from practical experiences and the technical support only authorized Gehl dealers can provide. Consumers are remarkably surprised on the power and performance when utilizing a Gehl loader in their applications. In conjunction, there are a huge number of attachments offered through our affiliate supplier, CEAttachments – a distributor of skid steer, track loader and tractors implements for owners of compact equipment.

Terex

With more than 45 unique product models, including seven models of compact track loaders, the Terex compact equipment line offers one of the widest ranges of compact equipment available from a single manufacturer, giving distributors and contractors numerous options for their equipment investment. In addition, Terex Financial Services offers a wide range of effective finance and leasing solutions, structured to complement distributors and customers’ cash flow and budgets. The Terex Financial Services team assists in all areas of asset management, from the analysis of future equipment values through the disposal of used equipment. In June, Terex introduced the new Distributor Rental Partnership Program (DRPP), to aid rental stores in the development of their compact equipment rental business. Many construction and landscaping industries contractors are turning to rental stores to access the equipment they need without the long term commitment of purchasing in this uncertain economy.

Skid Steer vs. Track Loaders

Which Compact Tool Carrier Is Right for Your Company and Crews

It looks like a skid steer  but rides around on tracks like a little Sherman tank. It’s called a compact track loader. Engineered with tracks instead of wheels, compact track loaders look almost exactly like their skid steer brethren, except for their dedicated track undercarriage engineered to the frame. Also called rubber track loaders and multi terrain loaders, the compact track loaders first hit the market in the late 1980s from pioneers ASV Inc. and Takeuchi, both innovators of track technology. Today these units are replacing skid steers in a variety of industries — especially landscaping where a light footprint, good flotation and traction are in demand in the wet weather seasons.

A dedicated undercarriage gives added pushing power (great in dozing operations), yet dispenses the weight of the entire machine through multiple track contact points for a lighter footprint. Of course, strong and steady track loaders still have certain niches where they are popular — landscape, forest and construction jobs that need extra flotation, traction and pushing power (while still leaving a light footprint). Wheeled skid steers will always have their strong markets (especially when hard surfaces, cost of ownership or increased cycle times come into play), but we expect compact track loaders to continue to eat up some market share in their specific applications. Bobcat, Caterpillar, Gehl, Mustang, JCB, Rayco, Komatsu, Case, New Holland, John Deere, Takeuchi and Terex ASV all make compact track loaders today. Price is always a factor as well. Typically, customer will pay a 25 percent higher premium on a track loader vs. a skid steer purchase.