Australasia and the Used HDD Market

By Bob Martin - General Manager - August 25, 2011

One of the challenges of living on an island, albeit a very large one, is that there can be a distinct shortage of necessary equipment needed for projects domestically. If we talk about the HDD marketplace, this truth often means that importing equipment from overseas is one of the most common and cost-effective solutions.

For some people, however, sourcing equipment from thousands of kilometres away can be a daunting task. Fortunately, there are resources out there that can help to make purchasing this equipment a more manageable, safe and problem-free process.

Be Realistic

First, get a good idea of the cost of bringing the equipment into your country. To begin with, research used HDD prices on the internet. Dedicated used HDD equipment sites, such as www.hddbroker.com, are an excellent place to start, as there are hundreds of pieces of equipment, including pricing information, available for viewing. In addition to the actual cost of the equipment, shipping charges, cleaning fees, duty, tax, and miscellaneous service and repair costs must also be considered. Being realistic in regard to the total cost of any equipment before starting a search will make it easier to secure financing and avoid unwanted surprises during the transaction.

Get Your Money

First off, consider exchange rates. They fluctuate on a daily basis, and even a small shift can result in thousands of dollars difference between the buying and selling currencies.

When buying used trenchless equipment, a direct cash purchase can be a dangerous proposition if you are not fully informed and trusting of the company selling you the equipment. An alternative to pre-funding the purchase is what is called an International Letter of Credit (ILC). An ILC is basically a contracts between your bank and the seller's bank. The contract outlines the terms of the sale in great detail, ensuring that both parties adhere to it. The disadvantage to an ILC is that some sellers will have little experience with them, and as such will not enter into one with a potential buyer. Additionally, there are costs involved in the drafting of the agreements, and the negotiation and implementation of the ILC is also very time-intensive.

Find a Trusted Partner

One of the best things that you can do for yourself is ensure that you're looking for equipment in the right places. Seek out a reputable brokerage company or dealership that has experience exporting equipment. Be sure that they have shipped to Australasia in the past, as there are very specific cleaning and packaging requirements that need to be adhered to in order to ensure swift and trouble-free importation to your location. Be aware that your equipment will most likely be delivered to port, and you or your customs broker will be responsible for clearing the equipment through customs and transporting it to your facility after it arrives.

Make Sure it is What it is

Once you find a solid and reliable vendor, you need to determine if the piece of equipment is actually as it has been described. In the case of used equipment, there is virtually never a warranty of any kind, and most equipment is sold as-is. It then becomes the duty of the buyer to ensure that the equipment meets their needs in regards to condition.

There are Three Options Available:

Purchase the unit sight-unseen. This is obviously not highly recommended, however in some cases it may be necessary. Once the deal is done, however, you've resigned yourself to whatever the equipment is, despite any reassurances or promises the seller may have given you.

Perform a personal inspection. This may actually be the best case, although likely the most expensive scenario. In this situation you have actually taken the time and expense upon yourself to travel out to personally view the equipment that you're interested in. You know precisely what you're buying and you can speak with the seller directly. Bear in mind, however, that unless you are or have with you a trained and experienced mechanic, simply putting eyes on a piece of equipment does not guarantee its capability to carry out the work that you need done. A thorough inspection of the unit by a qualified mechanic is a definite necessity.

Have the unit evaluated by an independent third party on your behalf. In this case, you contract with an independent company that has no tie to the seller for an unbiased evaluation of the equipment. These inspections typically cost somewhere between a few hundred and a thousand dollars, depending on how intensive an evaluation you have ordered. With these inspections, a qualified technician performs the evaluation and provides a written summary for your review. Be aware that even though you paid for the inspection, there is no guarantee that the technician caught any or all issues, and these technicians accept no responsibility for the equipment whatsoever.

Getting it Home

Before the equipment can be shipped, it needs to be cleaned to the standards set forth by the Australian Quarantine and Inspection Service (AQIS). These cleanliness guidelines are intensely specific, and most sellers will not be aware or capable of performing proper cleaning of equipment. Proper cleaning requires specialised knowledge and equipment and should not be undertaken lightly. Improper cleaning of equipment can result in huge delays, costs, fines, or even refusal of the equipment at port, the result of which sees your equipment shipped back to its origin at your expense.

Having said that, utilising the proper shipping partner will ensure that there are minimal delays or costs at port, if any.

When shopping for equipment, be sure that you are aware of the actual physical dimensions of it, and whether it will fit into a standard or high-cube shipping container. Pieces of equipment larger than these dimensions are still fully capable of being shipped, however the costs will be much higher than standard containerised shipping. Experienced and knowledgeable shipping agents can often use tricks to reduce the footprint of equipment to the point that it will fit into a container, even though its official dimensions may state that it won't. Again, finding that partner is a huge asset to you.

Conclusion

While buying equipment from overseas is not as convenient as going to the local dealership, there are a number of advantages. Overseas equipment can provide a vastly superior selection to choose from, at prices that can work out to be cheaper than local options. With the aid of an experienced seller, transactions can be smooth and painless. Provided you, as a buyer, go into the transaction fully aware of what to expect, there is no reason that the overseas market cannot become a viable alternative to the local marketplace.

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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