14 minute read
Fleet Management
Buyers and Sellers Find Online Options for HEAVY EQUIPMENT
There is high demand for heavy equipment but limited supplies. A unique online marketplace prepares to deliver solutions.
The construction industry has undergone unprecedented change since the early days of the pandemic. Many construction business owners were forced to conduct operations in ways they had not previously considered, and the industry saw rapid adoption of technologies capable of digitally bringing multiple parties together in a single online space.
Buying, selling and servicing of equipment was no exception. Yet, while the pandemic augmented a shift to online heavy equipment sales and purchases, it was a transition already in progress.
According to Howard Hawk, president of bidadoo, an online heavy equipment, truck and industrial equipment marketplace, online buying and selling had seen a steady, consistent growth over the past couple of decades. However, the pandemic led to “a monumental shift in buyer behavior” as users were forced to find ways to obtain or sell high-value used assets during the shutdown.
“With the pandemic, I feel like the adoption rates sped up by 10 years… and I don’t think it’s going back,” Hawk states. “I see a huge acceleration in online buying behavior and acceptance and especially for larger, complex transactions.”
Pandemic-related factors continue to push buyers and sellers online — most notable of which is the limited availability of both new and used machines.
Online marketplaces such as bidadoo are helping construction businesses find needed equipment and resources, while minimizing the costs of sale and extending the reach of sellers to more potential bidders. SHORTAGES DRIVE UP BOTH DEMAND AND PRICES
As the global economy started to emerge from the pandemic, steel producers and other component suppliers began the process of ramping up production. But this takes time and has been hindered by the slow return of employees and substantial exodus of many others from the workforce.
Then, there’s the global supply chain. Fewer workers, insufficient numbers of containers and ships and logistics nightmares contributing to pileups at ports have produced disruptions that could take months to resolve.
The result is extended backlogs for the materials and components that go into new domestically produced equipment and vehicles and delayed shipments of new units manufactured outside the U.S. Dealer lots have become more sparsely populated and new equipment order backlogs have steadily lengthened.
The strategic partnership and investment from eBay will enable bidadoo to provide even more service offerings, along with further assurances and guarantees, financing, logistics management and more.
“Obviously, what it means is a much tighter supply but a lot more demand,” says Hawk. “With a lot more demand, it’s driving significantly increased asset prices/price realization. So, there’s never been a better time to sell equipment than now.”
Prices are up 20% to 30% or more in some product categories. “It’s really astonishing to see the change. Now is by far the best time to sell assets if you need to sell them,” says Hawk.
“The problem is on the supply side,” he continues. “Everybody is holding onto their equipment because they’re utilizing it. So, there’s a much tighter supply of things to sell. And that’s across all the major customer sets that we look at.
“Manufacturers are definitely having a tough time pumping out new equipment because of supply chain and parts challenges, so they’re not delivering as much new equipment to dealers and rental customers, which are a couple of our big categories of sellers,” Hawk points out.
Rental companies are experiencing some of the highest utilization rates they’ve seen in recent years. But challenges obtaining new equipment to replace older models have them keeping machines in fleet longer. “They’re able to rent and utilize almost every piece of equipment that they can put their hands on, so they’re not in selling mode,” says Hawk.
Equipment dealers are facing their own problems. “The dealers are not seeing as much new equipment coming from the manufacturers… yet they’re trying to keep up with incredible end-user demand,” Hawk comments. “It’s a real challenge for them.”
While the end of the peak construction season in much of the U.S. should ease some of the
OTHER TRENDS MOVING INDUSTRY ONLINE
bidadoo’s Howard Hawk shares some other trends that are accelerating the shift to online heavy equipment marketplaces.
Transition to the next generation: “The [next generation] realizes the value of online efficiencies, access to a global marketplace and the data that we can bring to them to make intelligent buying and selling decisions,” Hawk notes.
Complexity of equipment: The impact the semiconductor shortage has had on availability of equipment and vehicles is indicative of how complex today’s machines have become. “It takes a whole different level of sophistication to accurately remarket a piece of equipment like that vs. 10 or 20 years ago when the machine didn’t really have many computer components,” Hawk comments.
Changes in how we buy: The pandemic drove purchases of virtually all types of goods online, and Hawk doesn’t see that slowing down. In fact, he believes it will increase. “The pace of use of online marketplaces and technology is only going to accelerate from here,” he predicts. “In our industry, we are not the earliest adopters of some of that technology. But I think that trend is going to continue [and] online buying and selling — online everything — is just going to increase in the future.”
pressure, Hawk foresees ongoing shortages. “I think that things have… changed so significantly that I do think we’re going to see this have impact over the next year or more,” he predicts.
ONLINE PROVIDES MORE OPTIONS
Fortunately, online marketplaces are helping construction business owners find needed equipment and resources, while also minimizing the costs of sale and extending the reach of sellers to a broader realm of potential bidders. bidadoo is in an especially unique position to deliver these services and more thanks to a recent expansion of its longterm relationship with eBay. The bidadoo marketplace has been housed on eBay’s platform largely since its inception over 18 years ago; now, the global online auction powerhouse has become a strategic partner and investor.
“We’re excited… to expand that relationship into a strategic partnership with eBay invested in bidadoo, recognizing that together we provide a very compelling marketplace to buyers and sellers around the world,” says Hawk. “What we do really fits into the DNA of eBay because each asset is a one-of-akind used capital asset, typically with a lot of good value left. eBay is the largest online auction platform in the world, so it’s a great fit for them.”
According to Hawk, the partnership will offer advantages to all bidadoo users. “On the seller side, it’s going to make it much easier for large fleet companies and anyone selling capital assets to get onto and utilize the power of eBay,” he says. “We’ve always had a marketing and commercial relationship, but now we’ll be building tools, doing integrations and providing additional selling options… so sellers can more readily utilize the system and all the different channels and options that eBay provides.”
This includes providing access to eBay’s more than 150 million registered users globally. “What the strategic partnership is going to enable for the sellers is to be able to bring higher net returns on their equipment,” Hawk asserts.
On the buyer side, the partnership will provide a significantly improved selection of inventory to the platform, along with more alternatives for obtaining that equipment, including retail, “buy it now” and “make an offer” options. A further benefit will be parts and attachment availability.
“eBay is one of the biggest parts and attachment sellers in the world of heavy equipment,” says Hawk. “Bringing the machines, the parts and the attachments together is going to provide a very effective, very efficient ecosystem to the buyer.”
Other service offerings will be expanded, as well, along with assurances and guarantees, financing, logistics management and more. “We’re going to make the process a lot easier for buyers,” says Hawk. “Onestop shopping to buy complex equipment and machinery is what customers have come to expect from a good online marketplace.” bidadoo expects to provide that and more as its relationship with eBay continues to evolve. “All of the buyers out there, [in order] to continue to run their businesses, will be very excited to have more… trusted used options in the coming months,” Hawk assures. ET
Limited availability of both new and used models coupled with high demand means prices for some product categories are up 20% to 30%.
Images courtesy Warfel Construction
An example of drilling down into one of Warfel Construction’s Microsoft Power BI safety dashboards shows summary and comparison statistics across projects on safety risks for work at height. (Names of individual projects in the table upper left intentionally blurred.)
How AI Boosts Safety & Reduces Risks Without Extra People or Data
Artificial intelligence recognizes safety risks and measures policies that will make the biggest difference in jobsite safety.
On a Friday night at 5:20 p.m., Matthew Hartzler, president, Warfel Construction, was looking at project photos when he saw a retaining wall that gave him pause. The cut behind it didn’t look safe so he contacted Conlan Swope, VP of operations, to let him know. The conversation turned to whether or not there was a better way to use these kinds of photos to improve safety. After all, it’s not very efficient for the company president to manually identify safety hazards in site photos.
Warfel was growing. From a $58 million company in 2009, it had consistently risen to revenues greater than $225 million. But if it was going to be the go-to contractor for any developer it worked for, the company’s leaders knew they would need the best in emerging technologies to understand what was going on at the job level, and would need to use that data to drive costs down and production quality up. One of the rare ways to accomplish both of those goals at once, and meet their obligation to people doing the work, is to improve site safety.
Hartzler’s Friday night call to Conlan came in 2019. He’d been browsing project photos on Warfel’s recently implemented Procore project management system. Procore replaced a lot of fragmented point solutions that didn’t communicate with each other. It eliminated the app login hopscotch and redundant data entry.
“The icing on the cake was all the integration possibilities with Procore,” says Phil Weaver, Warfel’s senior director of IT. “It integrated with our existing ERP, Viewpoint and hundreds of other platforms, like Smartvid.io.”
WAY MORE VALUE FROM EXISTING DATA
Warfel’s project people were capturing a lot of photos using Procore’s Photos tool for the company’s standard operating procedure for progress and milestone documentation. StructionSite — another application with an established Procore integration — is a project imaging platform that enhanced Warfel’s progress documentation and safety effort. It allows a user to identify their location based on project drawings in Procore, then take a 360° photo easily with the StructionSite camera. The image is automatically tagged with time- and plan-specific data for that location on the job.
“Smartvid.io sees that photo in Procore and ingests it into its AI (artificial intelligence) engine. There was no additional process needed from our end-user standpoint,” Weaver explains. “With those photos accessible to Smartvid.io from Procore, we’re able to start leveraging some of the advanced AI features.”
Implementing Smartvid.io was, in Weaver’s words, “easypeasy.” “Smartvid.io plugged right into Procore. We began exporting projects from... to Smarvid.io on a Friday, and Monday morning, all 45 projects were synced up and ready to go,” he states.
With the Smartvid.io Safety Monitoring solution that Warfel deployed, the AI works like a virtual safety manager that automatically detects safety hazards in photos the contractor’s people store in Procore. The AI, which Smartvid.io has named “Vinnie,” can identify phases of work and risks captured in the images, which became the key to Warfel using so much more of the data those progress images capture.
For example, Vinnie analyzes a photo taken by Warfel engineers to document work in place. In the image, if an electrician stands near the top rung of a stepladder working above the ceiling grid, Vinnie tags the image to report the risk with the person working at height in the room. The single risk is not Warfel’s primary concern, but the frequency of this kind of risk is.
Vinnie aggregates a database of observations tagged by keywords, project, phase of work, subcontractor and other criteria. Warfel uses Microsoft Power BI to create dashboards and a safety risk assessment report from Vinnie’s data that provides the firm with cross-project benchmarking for leading risk indicators, such as workers at height, ladders by type and slip, trip and fall hazards.
Vinnie’s ability to identify context adds an important nuance to the understanding of the hazards it detects. For instance, it may not be as big a deal if workers aren’t wearing some PPE elements while doing some interior work, but it’s generally a very big deal during demolition.
USED TO IMPROVE, NOT PUNISH
“The information allows us to look at trends, identify particular risk areas and benchmark ourselves in terms of performance against other contractors all across the country,” says Swope.
“If you’re looking for a source to police safety or slap hands on a project, Smartvid. io can be used for that. But you’re obviously looking at lagging indicators already. What we wanted to do with safety analytics is figure out how we can make people better,” he says. “Risk is everywhere around us. It’s not going away 100%. But how do we continue to mitigate that, and look at it as a continuous improvement process?
“What we did when we brought SmartVid.io on board is tie together what they were seeing in the field with the prequal process. We’re evaluating subs from past project performance, safety, quality and financially,” Swope explains. “We wanted to look specifically at the safety measures and safety scoring for subcontractors. What caused certain subs to be more of a risk for us on projects? And on the other side of it, what made subs that were continually getting high scores on safety so safe on projects?”
Warfel has used that trending information, especially during COVID, to educate, coach and assist subs that were struggling and help implement new measures, practices and guidelines to improve the safety scores for some of the higherrisk contractors. This approach yielded results within weeks.
The Warfel crew started working with two “high-risk” subcontractors that consistently scored at the bottom of the safety scale. “Over the last two months, we’ve seen them move into a medium-risk category, which might not seem like a drastic change,” Swope comments. “But any time you can take somebody who was performing at a 3 and move them to a 6, that’s a big change in their risk to a project and to employees going home safely at the end of the day. That’s a huge win, and a great example of using the data to close the loop and drive behavior. Not nailing people — using the data to improve behavior.”
The AI data makes conversations with subcontractors productive because it can accurately measure the safety value of specific jobsite conditions, so there’s little question that what Warfel is suggesting will, in fact, produce the results both parties want.
For example, Warfel saw that when Vinnie identified a foreman present on site (foremen wear a different color hard hat), the safety risk of that site was eight times less than sites without a foreman.
“That’s a huge reduction in risk and we wanted to extend it to all of our sites,” says Swope. “So, we worked with our under-performing subcontractors to find a way to get a foreman there, and as a result we saw multiple of our highest-risk subcontractors move into the medium-risk category. That’s a big, big change that makes a big difference, and we would have never noticed it without Smartvid.io.”
AI KEPT JOBS WORKING THROUGH COVID
Vinnie adapted to the coronavirus, with Smartvid.io developing its ability to identify COVID-19 safety hazards such as “people in group” — people standing less than 6 ft. apart or congregating in groups of 10 or more — and “no face mask.” These capabilities were vital to Warfel’s ability to continue working, especially during the initial government shutdowns early in the pandemic.
To keep jobsites open, Warfel had to present county authorities with its COVID19 safety procedures and demonstrate that workers were complying. Using AI analysis of photos taken through its standard job progress procedures, Warfel was able to monitor how well each jobsite was complying without adding personnel on site to observe, which would increase both costs and viral transmission risk.
“We were the only job allowed to operate in one of Pennsylvania’s largest counties because we could validate our adherence to COVID19 safety guidelines with Vinnie’s analytics,” Swope points out. “That kept a lot of people working — both our own employees and a large number of subcontractors. We took great pride in that.” ET
A high-level Warfel Construction dashboard of the Smartvid.io’s AI analysis of photos for safety risks rates the safety of the contractor’s projects in the table at upper right (project names obscured).
