2011 in Review - HDD Broker and the Used Equipment Marketplace

By Bob Martin - General Manager - December 29, 2011

HDD Broker had a banner year in 2011, breaking our previous records for sales. We sold into over 39 different countries and attracted viewers to our website from over 100 others. This year also saw HDD Broker's 10 Year Anniversary. We are all very excited over the impact that we've made over the last ten years and we're looking forward to the next ten with equal enthusiasm.

As the world seems to slowly grope its way out of the darkness of the recession of 2008, I'm happy to say that we seem to be seeing very steady growth and increased demand in the HDD industry. That first period of fearful cocooning seems to have passed, and at least in the industry we play in, the general feeling seems to be one of cautious optimism.

One of the big disappointments to many was the lack of impact the Stimulus Plan in the US had on the domestic HDD market in general. While it did help in promoting smaller utility installation for fiber and water in some areas, the overall effect seemed to be minimal. HDD Broker has seen a big increase in the number of maxi rig inquiries and sales over the last year, indicative of a pickup in pipeline work across the US.

One of the most interesting developments in the used equipment marketplace is the fact that it is now entering the time where high-demand equipment is just not there. As a bit of background, you need go back to 2001 and the big fiber crash that ran from late 2001 through 2004. During that time, virtually no new HDD drills were being produced. In our experience, most HDD contractors look for used equipment that is between seven and ten years in age, the time period when it has reached maximum depreciation but still has high productivity. Unfortunately what that currently means is that demand falls directly in this "black hole" of no used equipment. The used market is at historically low inventory levels, demand is high, and people are having a hard time finding good options.

With Tier IV rolling into its second phase this year, the size ranges where most of the HDD drills will fall, there will be considerable activity on the used market as people liquidate Tier II and Tier III equipment in favor of the new models, or else buy up these good trades for areas where the regulations are not yet in effect.

On top of that, we're looking at the introduction of Vermeer's new rock drills into the marketplace. They now stand to compete toe to toe in an arena previously dominated by Ditch Witch's AT offerings. At the very least, we're forecasting significant activity revolving around the rock drilling platforms in later months of this year.

In short, this will be interesting times, and we at HDD Broker are very excited to see what those times will bring.

From all of us here at HDD Broker, we wish you Happy Holidays and the very best of the New Year!

This commentary is presented for informational purposes only. It is not intended to be a comprehensive or detailed statement on any subject and no representations or warranties, express or implied, are made as to its accuracy, timeliness or completeness. Nothing in this commentary is intended to provide financial, legal, accounting or tax advice nor should it be relied upon. Neither HDD Broker, Inc nor the author is liable whatsoever for any loss or damage caused by, or resulting from, any use of or any inaccuracies, errors or omissions in the information provided.

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