If your public works department owned just one wheel loader, excavator, and bulldozer and all the right attachments, your team could get virtually everything done.
They’re pretty basic machines, or should be. But in their attempt to offer the latest technology, ergonomic design, and/or regulatory-compliant engine, equipment manufacturers are constantly tweaking designs. The result is a bewildering array of options that makes a municipal purchasing manager want to bang his head against the wall.
By making common options standard and selling machines at fixed, non-negotiable prices, a new U.S. company could greatly simplify the procurement process for public fleets nationwide. Owned by Liquidity Services, the same company that owns GovDeals, an online platform for selling surplus and confiscated items, IronDirect.com is a one-stop-shop for financing, buying, maintaining, and reselling machines that are as good as Caterpillar, Deere, Komatsu, Volvo, and other well-known brands.
Think Zappos.com but for construction equipment instead of shoes. You don’t get to kick the tires unless you travel to the Customer Experience Center in Asheville, N.C. However, depending on how much rolling stock your department’s responsible for, potential benefits could far outweigh any drawbacks. In fact, a public fleet could potentially generate revenue that can be used to offset software upgrades or technician training expenses.
A dozer is a dozer is a dozer
IronDirect is staffed by former Case, Caterpillar, Deere, Ingersoll Rand, Sany, and Volvo employees. In 2014, they launched a similar enterprise called International Construction Products. The pushback they got from their former employers generated so much media coverage that Liquidity Services heard about, bought, and relaunched the company as IronDirect.
"They said women would never buy shoes without trying them on first but Zappos.com hit $1 billion in sales two years before it planned to," says IronDirect President Tim Frank. He was most recently CEO of Sany America, a Chinese company and world’s fifth-largest construction equipment manufacturer. He recruited colleagues by giving them the opportunity to help design and implement a distribution platform that lowers lifetime cost without sacrificing quality or support.
Like International Construction Products, IronDirect is focused on introducing the North American market to Chinese brands. Lonking is China’s largest supplier of excavators and wheel loaders; Shantui is the world’s second-largest supplier of dozers.
Engines, transmissions, pumps, valves, drive motors, and other major components made by Cummins, Kawasaki, Rexroth, and the like are shipped to China, placed into a body made of 100% hot-rolled steel from new Chinese mills, and then shipped to the U.S. IronDirect inspects machines at the factory and port of entry; the owner activates the warranty upon delivery inspection. The owner pays for delivery.
A telematics system that tracks location, machine hours, fuel consumption, oil pressures, fluid temperatures, alarms, and error codes is standard. Although proprietary to IronDirect, DirecTrac data can be imported into any fleet-management software program using the Association of Equipment Manufacturers (AEM)/Association of Equipment Management Professionals (AEMP) mixed-fleet telematics standard approved by the International Organization for Standardization (ISO 15143-3) in 2016. IronDirect pays for the first three years of service ($20/month thereafter).
This system is used to provide free 500-hour and 1,000-hour “maintenance kits” that include engine and hydraulic filters.
IronDirect’s warranty is two years or 4,000 operational hours.
Addressing support issues
Previous attempts to introduce brands to the North American market without a dedicated distribution network have been hampered by support issues. Dealers didn’t want to stock parts for equipment they didn’t sell.
IronDirect only cares that the machine is properly serviced, not who performs the work. Any dealership the company approves, regardless of brand, can do it; or your technicians can.
Hydraulic and powertrain systems don’t require a laptop or specialized diagnostic tools, and maintenance parts are free for the first 1,000 operational hours. After that, parts can be ordered from IronDirect, which charges roughly 30% less but reimburses at the full retail price. Delivery is within 24 hours and by whatever service the customer chooses.
Labor is reimbursed at $110 per hour. The company pays for a rental for any downtime caused by a failed part that can’t be replaced within 48 hours.
Each machine comes with a QR code that can be scanned to access component model and serial numbers, quality assurance report, key specifications, and a “virtual demonstration” in the form of a comprehensive walk-around video. If those materials don’t answer a question, the company’s DirectAssist app provides almost-instant access to experienced service technicians and parts experts.
A world of opportunity
IronDirect also offers equipment and accessories made by U.S. and other non-U.S. companies.
Magni telescopic handlers and Berco undercarriages, both Italian companies, are available. Idle-time reduction systems from Parks Industries LLC (Marion, Ill.). Sy-Klone International (Jacksonville, Fla.) air-quality systems. Almost 5,000 tools from Paladin Attachments (Dexter, Mich.).
During a July 2016 media visit, IronDirect representatives indicated the company’s exploring relationships with other brands that would be of interest to public works departments: Tymco (street sweepers), Husqvarna (zero-turn mowers), Hamm (asphalt and soil compactors), Wirtgen Group (Vogele asphalt pavers), Talbert Manufacturing (trailers). The list goes on.
It will be interesting to see how government customers react to the construction equipment industry’s first online-direct purchasing model. Will simplifying the specification process and publishing a fixed purchase price that anyone can find online be enough to entice fleet superintendents and/or purchasing managers?