Buying A Dredge
by Ryan Horton
Investing / buying a dredge can be a scary process. In the past 5 years alone I have seen a dozen different dredge builders surface around the world and throw up web pages that make them look bigger than they actually are. It is important that you do your due diligence before selecting a dredge builder. After you determine what size dredge you require and what basic features you want then you need to determine which dredge supplier or broker to work with. Here is some general advice I give to potential buyers:
- FACTORY: Ask the sales person for photos of their factory (inside and out), parking lot, inventory lot, and offices. If they can’t provide them or the photos don’t meet your expectations then move on to another builder.
- USED DREDGES: When dealing with a dredge broker who deals in used dredges only, make sure they provide at least 5 written references that are from the last 5 years. Ask if they provide any sort of warranty or if the sale is “as is, where is” as we often hear about used dredge buyers having to spend $50,000+ on repairing a dredge before they even get started operating it. Most used brokers won’t provide any sort of guarantee so make sure you can live with that. Make sure that the slurry pump is not worn out. Impellers and suction liners can cost a minimum of $6,000 each. If you are dead set on buying a used dredge then only buy a dredge that is build by a manufacturer that is still in business and one that has a good global reputation and the ability to service its clients globally. Another important item to discuss with the broker is if spare parts are available. If they say “yes” then make sure they give you a name, e-mail, and direct phone number for the parts person and make sure and call the person to see if your used dredge still has parts support. Ask the parts person what sort of items they would recommend to update the used dredger. This may also help you determine if buying used is really a “good deal”. Also, make sure that the broker answers the phone during normal business hours in their time zone. Stay away from brokers that work on mobile phones and don’t have a physical location. Ask the broker for photos of the hour meter on the engine that are dated or do the simple “proof of life” photo with a major newspaper in the background. Stay away from shop built dredges and from used dredges built by companies that are no longer in business.
- COMPANY OWNERSHIP & STABILITY: Find out who owns the company. Is it financially secure? For example, some smaller dredge builders are privately held. Make sure you feel comfortable giving your money to a privately held company. It is always a safer bet to deal with a larger manufacturer that is backed by a financially stable firm. IMS for example is owned by Markel Corp. (NYSE: MKL), a publicly traded company on the New York Stock Exchange. Look up the company’s D&B report before you spend $500,000-$1,000,000+. If the annual revenue is below $5,000,000 a year then walk away.
- SERVICE DEPARTMENT: Find out how many people they have in their service department. Do they include training free with a dredge purchase or are they going to nickel and dime you every step of the way (airfare, hotel, meals, travel days, etc.)? IMS includes 3 days training for US customers and 5 days training for overseas customers. IMS even covers airfare, hotels, and meals. Again, if you are buying used then check the cost of what it takes to get a field service technician to your job site.
- CHECK THEIR WEBSITE CLOSELY: Look at their website closely. Does it just show general dredge specifications and a couple photos? A good supplier will have case studies and use names of clients and projects titles. There is another dredge builder that says they “can” build a hydraulic dredge with a vegetation cutterhead yet they don’t show a single photo or video of the unit in operation. Make sure you are not going to be a guinea pig for a duplication of someone else’s technology. It may look the same as the technology they are copying, but in the end it is never the “same”. Think about the hydraulic flows, required power and mechanical tolerances. Most companies that duplicate a competitor’s technology never get this right and doom the end user to failure and possible legal repercussions on their contract.
- PUMPING INFORMATION: Only work with someone that has the ability to show you production estimates that include pipeline ID, length of pipeline, terminal elevation, flow, % solids, estimated solids production, and a pump curve. It is a lot harder for a supplier or broker to give you inaccurate information if you are requesting basic technical information along with the production estimate request. Also, make sure and know the difference between total slurry volume vs. total pumped solids. The slurry volume is the total water and solids mixture. It is common for some European suppliers to give a production estimate to an end user as total slurry volume (ex. 500m3/hr.). In reality their dredge pumps around 80m3 hr. solids. This is of course misleading if the proper questions are not asked.
- ADDITIONAL EQUIPMENT: It is very important to compare apples to apples when shopping. One supplier may charge $50,000 less for example, but what features and additional equipment are you not getting as part of the package that you may actually need? Some suppliers will quote you a dredge without air conditioning, no hoses, no hose floats, no training, and sometimes without cables or a propulsion system. At the end of the day these items can cost over $60,000.
- SIDE BY SIDE COMPARISONS: Ask your dredge sales person to compare your dredge to the other dredge(s) you are looking at. If they don’t have the time then they won’t have the time for you when you have a serious problem down the road and need your help. This simple exercise helps show what you are getting for your money. Send them the competitive quote and let them show you the advantages of their system over the competition.
- GEOGRAPHICAL LOCATION: This is important. Find out where the supplier is located. If they are in a small town that is not close to an international airport then you can almost guarantee that they are not a major player in the industry and their parts shipment will take additional time to get to you. If their factory is within 1 hr. of a major international airport like Minneapolis / St. Paul International then it is a good bet that they are able to ship parts out the same day and have them on an international flight by the evening.
- BUDGET MODELS: If you have a project that is not that complex or you are fine with a basic hydraulic lever model dredge and cable drive then ask the manufacturer if they will build you a “bare bones” model. A few manufacturers like IMS will do this. This will insure that you get a high quality product build in the USA by a reliable dredge supplier. It is a lot riskier buying a used dredge than it is buying a used excavator. Dredges are often made in smaller runs and there only a hand full of manufacturers in the world, like IMS, that build high volumes with uniform parts.
If you have any questions or require any basic advice on the dredge purchasing process or just want any basic recommendations then please contact Ryan Horton at [email protected]