The Bobcat of Juneau dealership offers customers the option to rent, lease, or buy.
It takes a lot of equipment to tame the Last Frontier—from bulldozers and skid loaders to excavators and forklifts, there is no lack of demand for construction equipment.
Powerful machines, practical methods
For the companies that provide the machines for these jobs, it also takes a mastery of logistics and a lot of careful planning to make sure that the equipment that drives Alaska is ready and available for work.
“When you’re talking to people down south, they really don’t get it—I’ll tell someone that our equipment is out on an island, and they’ll say, ‘Why don’t you just drive over and get it?’” laughs Colter Boehm, who co-owns Bobcat of Juneau with his father, Jeff Boehm. “Or they see that something is in stock in Anchorage and ask me to just run up there and grab it. They don’t understand the logistics of getting the equipment here and then out to the customer.”
The Bobcat of Juneau dealership.
Get There from Here
No matter where in Alaska equipment is going, it almost always takes some ingenuity to get it there, especially when moving a twenty-five-ton excavator, for example. But the challenges start before the order even comes in, as heavy equipment and material handling dealerships have to figure out how to get stock into the state in time for construction, fishing, or even budget seasons.
“Generally, we stock an array of the machines that we know we sell continuously so that our floor plan is sufficient with construction equipment like compactors and wheel loaders and material handling equipment like forklifts and pallet jacks related to the season,” explains Wayne Dick, president and sales manager at Independent Lift Truck of Alaska (ILTA). “But we also place industry specific orders as needed; prior to the fishing season, for example, we’ll bring extra machines in because we know that once the season starts, we’ll need what customers want right here, right now.
“We also have to be prepared for the big run at the end of the year, when people realize that they need to spend the rest of their capital budgets,” he adds. “And when a new fiscal year starts in January, we work with our customers to make plans for spring deliveries.”
ILTA has been serving the state since 1982 from its headquarters in Anchorage and locations on the Kenai Peninsula and Kodiak Island. Its primary customers include those in the fishing industry and the oil and gas industry. The company also provides construction equipment for building supply chains throughout Alaska.
“We’ve been a Mitsubishi dealer for the past thirty-four years and a Caterpillar dealer for twenty-eight years,” says Dick, adding that the company also carries Jungheinrich, Manitou/GEHL, and Wacker Neuson products, among others.
Equipment coming from American manufacturers and from countries including China and Germany is either shipped direct from the factories or staged at ILTA’s depot in Fife, Washington, before being shipped to Alaska. The carriers used depend on the customer’s need and urgency of delivery.
“You need to make sure that you have equipment in the pipeline, because getting equipment from the manufacturers can take time—for example, you need to order a standard forklift fifteen to sixteen weeks out,” says Dick.
“This is why it’s so important to continually be in touch with the customer, especially at the end of the year when they’re looking at the next year’s budget,” adds ILTA’s Director of IT & Communications Wendy Whitten.
Getting the product to Alaska is only half the battle. Once it is rented or sold, it needs to be transported to the customer’s site, which could be quite remote.
“Our equipment coming into Juneau arrives on a barge, but going out might require a mix of using the ferry, a barge, or flying smaller items,” says Boehm. “In Southeast, we have a landing craft on hire to help us do local moves.
“For example, we chartered a landing craft to deliver five or six pieces of equipment to a project on a remote island in the Gulf of Alaska,” he adds. “The equipment ended up being gone for a month, even though they only needed it for three or four days. But when a customer needs it right now, you have to figure out how to get it there. Some companies may deliver in three to five days, but we’re very open-minded when our customers need something ASAP—even if that means chartering a plane to deliver it that day.”
Yukon Equipment Inc.’s fleet/logistics manager is in charge of making sure that inventory arrives in Alaska on time and then makes it to where it needs to go. “We bring up at least a piece a week on the barge line from Seattle or Tacoma, and then truck it in-state or take it to meet barges to outside communities,” explains Charles Klever, president of Yukon Equipment. “For example, we might truck a piece of equipment to West Dock in Prudhoe Bay and then send it to more northern points on a barge that only runs once a year. If it’s going out west, we might use Alaska Marine Lines, Sampson Transport, or the Alaska Marine Highway; for example, we’re sending a machine to Kodiak this week on the Whittier ferry, which makes it less expensive for our customer.
“Next week, we’re taking a rock crusher in a Herc and delivering it to Anaktuvuk Pass,” he continues. “We do everything from putting it in the back of our pick-up to flying in a Herc to shipping by barge or truck. And our logistics manager has been doing this long enough that she knows the places to go to get the best freight rates.”
While cost is important, timing is everything when it comes to shipping machines across the state.
“In mid-September, the barges quit running, so if you miss the barge out west, you have to take machines apart to put them on planes and fly them out,” says Dick. “Customers can’t wait until the last minute to order equipment because those last barges are full—and good luck getting a spot.
“Still it happens every year, so we restock to be ready for the hit that comes when everyone realizes that the barges are going to shut down,” he adds. “It’s the nature of the business—you have to plan ahead.”
Sales and Service
President and Sales Manager Wayne Dick and Vice President and Operations Manager Gerry Dick of Independent Lift Truck of Alaska.
Customers have numerous options when it comes to procuring project equipment, including buying the items outright to renting what they need on a short or long-term basis. There is also the option of renting to own.
Yukon Equipment, which has been serving Alaska since 1945, carries more than forty products on its line card, including Case Construction equipment, Oshkosh snow products, and Elgin and Vactor industrial products. Roughly half of the company’s business comes from public entities such as the State of Alaska and its municipalities, cities, and villages, and the other half comes from road and small construction contractors. Yukon works with oil and gas companies and mining companies as well.
“We offer a full range of buying, renting, and leasing programs, as well as financing available in-house,” says Klever. “Our new inventory comes from manufacturers that we are authorized dealers for, like Case Construction. We are a stocking dealer for some other manufacturers, so we keep their products on the shelves, and if we’re a non-stocking dealer for something a customer wants, we’ll order that manufacturer’s products on demand.”
Yukon does an active market in trade-in and used equipment, buying from customers within the state and from auctions and companies outside. “We try to figure out what we will need for our rental fleet, and what fits into our ‘return on asset’ criteria,” Klever says.
“Our biggest challenge is pricing—keeping the margins in line,” he adds. “Certain larger dealers offer discounts not adequate for return on investment, which spoils the rental market. We can’t afford to give something away; if we can’t make an adequate return, then we can’t bring in equipment for the rental fleet.”
One of the benefits of working with Yukon is that Klever makes a point of trying to provide the best deal. “Though I’m the president, I’m also involved in the negotiation of every transaction in the rental and sales portion of our existing inventory,” he says. “I have a background in finance, so I work to add value to the process. If a person wants to rent equipment with the option to buy it after a couple of months, I make sure that they get the lowest interest rate possible and the best terms.”
According to Dick, roughly 80 percent of ILTA’s customers utilize financing, whether through the manufacturers or from other sources. “We work with several resources that can provide financing, and with every quote we offer financing as well as a rent-to-purchase option,” he says. “Some manufacturers, like Wacker Neuson, provide their own financing; for something like used equipment that doesn’t qualify, we work with Wells Fargo Manufacturers Group to help. If a customer isn’t approved for this type of financing, we might be able to do something in-house.”
As a full equipment dealership, Bobcat of Juneau offers customers the option to rent, lease, or buy, and also helps customers decide exactly what they need. Now in its eleventh year, the company, which is the official dealer for Bobcat, Husqvarna, Terex and more, operates two satellite stores in Haines and Ketchikan. The company’s customer base is extremely diverse and includes everything from very heavy construction; oil and gas; and federal, state, and local municipalities to homeowners looking to clear building lots.
“One of the things that makes us different is that we’re more willing to deal with the homeowner market than a lot of other dealerships,” says Boehm. “One minute I’ll be talking to a forty-year veteran construction worker about the specific type of equipment he needs and two minutes later talking to an older lady about how to run a rented excavator.
“We strive to be very efficient in sales, service, and rental because there is so much carryover from one market to the next,” he adds. “You need to be able to do all three really well.”
All three companies (Bobcat of Juneau, ILTA, and Yukon Equipment) hire factory-trained mechanics to make sure that they can fix whatever they sell—or even products that have been purchased elsewhere. They also do custom orders, whether through the manufacturers they represent or in-house.
“We get special orders quite often, and, if we can’t provide it from our manufacturers, the dealership will accommodate adding or subtracting from equipment to fit specifications,” says Dick. “Our team has a lot of experience, so they can customize just about anything.”
“We’ve had some challenging cases—for example, we worked with a disabled customer who could only move his left arm and one foot and wanted to use a Bobcat skid steer for mowing and snow removal,” says Boehm. “We worked with him to figure out how to get around the control options. We also modified an ATV for a local tour company to create extra seating capacity.
“When people ask us if we can build some odd attachment, we never say no, at least until we try it,” he laughs. “There are so many different industries here, especially in Southeast, that we’re servicing a very diverse group of people with diverse needs. You never know what will walk in the door.”
According to Klever, being willing to go above and beyond is one of the reasons that customers come back. “Our company is smaller in size compared to a couple of others here, so we try to make up for that by having a staff that is extremely customer service-oriented,” he explains. “They’ll come in on weekends if need be or stay late at night so someone can bring in a piece of equipment. We do more to make up for other companies’ size advantage—we’re like Croatia in the World Cup.”
Areas for Growth
Independent Lift Truck of Alaska facility in Anchorage
As Alaska’s economy continues to shift, so do the markets for equipment dealerships.
“The biggest opportunity I see right now is in military spending—it appears to be pretty big and this not only affects housing but infrastructure on the bases,” says Klever. “Luckily, the federal money spent will more than compensate for the dried-up state coffers.
“Oil and gas is still a big question mark; I don’t know if they’ll increase the money they’re spending on investments on the Slope or not,” he adds.
“The state is definitely still struggling, and I don’t know when that will change,” agrees Boehm. “But the economy is starting to pick up, and oil and gas is starting to pick up, which may present a good opportunity in the next year or two.
“On a positive note, the private sector is taking off; Washington and Oregon are going crazy, which also affects us. We’re working hard to try to capture more of the homeowner market by taking the intimidation out of visiting a dealership; it doesn’t matter what your knowledge level is, we treat every customer the same.”
Providing customers with the machines they want, when they need them, takes a lot of effort on the part of Alaska equipment dealerships, and from the sounds of it, they’re up to the challenge.
Vanessa Orr is a freelance writer and former editor of the Capital City Weekly in Juneau.