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Loader-backhoes vs. mini-excavators, skid-steers: market remains strong for traditional loader-backhoes despite increased competition from mini equipment.

For years, the venerable tractor-mounted loader-backhoe (TLB) has been considered by many to be the most versatile construction machine ever developed, and arguably backhoes are found on more types of construction sites than any other machine.

These versatile workhorses can dig, load spoil into trucks or move dirt and other materials around the job site, do light grading, lift heavy tools and equipment, and their mobility lets them move quickly around the job and drive themselves to nearby locations.

In recent years, compact excavators have become increasingly popular in North America, and dual machine packages of compact excavator and skid-steer loader are offered as an alternative to the traditional TLB.

Is the TLB about to be replaced by compacts with scores of attachments?

Absolutely not, say representatives of three major TLB manufacturers: Case, Caterpillar and John Deere. Because the three companies also offer compact excavators and skid-steers, they are in a good position to evaluate the impact of the compacts on full-size loader backhoes. Underground Construction asked these companies to comment on the TLB market. Responding to our questions were Rusty Schaefer, Case marketing manager; Jim Zak, Caterpillar backhoe loader marketing manager; and Bob Tyler, John Deere product marketing manager, backhoes.

How would you describe the market for conventional tractor-mounted loader-backhoes?

Schaefer (Case): The nature of a loader-backhoe is versatility, so it is ideal for a wide range of markets or applications, including residential construction, roads and bridges, utilities and landscaping.

Zak (Caterpillar): The markets for these machines are primarily in rental landscaping, utility and agricultural applications. The 0- to 13-foot backhoe-loader industry seems very volatile and has seen huge swings and had all but disappeared at one point.

Tyler (Deere): The backhoe market in North America has seen a significant turn around since 2002, and is showing double-digit percentage increases.

Has the growing popularity of skid-steer loaders and mini-excavators impacted sales of loader-backhoes?

Schaefer: The loader-backhoe industry is 35 percent larger than the mini-excavator industry, with both product lines seeing substantial growth as residential construction has remained steady due to continuing low interest rates. As a full-line supplier, Case offers a range of solution-driven products to our customers. While loader-backhoes are a flagship of the Case product line, our customers choose the products that best fit the application at hand.

Zak: The backhoe-loader has seen a consistent cycle of growth over the past 20 years. While there are years of decline, with each cycle the peaks get higher and the lows are minimized. Therefore, we have not seen any evidence of long-term impact on backhoe-loader sales sacrificed to skid-steer and mini-excavator growth. Caterpillar is well positioned with a full line of equipment to offer the appropriate machines to meet specific customer applications.

Tyler: While we recognize the popularity growth of skid-steers and mini-excavators, we don't believe this has affected the total number of backhoes sold to any great extent so far. In fact, the skids and minis may be creating their own expanded market.

Over the past five years, have new loader-backhoe sales decreased? Increased? Or remained level?

Schaefer: Loader-backhoe sales are directly tied to residential construction. Given the impact that low interest rates have had on the residential side, the loader-backhoe business has been very positive.

Zak: Backhoe-loader sales have remained consistent with the business cycle previously described. The industry peaked in 1998 and declined during the following four years. In 2003, the backhoe-loader industry started seeing the beginning of a recovery that continues to be strong today.

Tyler: Backhoes have tended to follow the economic trend with construction equipment sales. We saw a decline from 2000 to 2002, followed by a rally from 2003 to the present.

What are the reasons an equipment owner would prefer a loader-backhoe over a mini excavator? Over a two-machine package of mini-excavator and skid-steer loader?

Schaefer: The key advantage of the mini-excavator is that it allows the operator to work in extremely tight quarters. But you can't run a skid-steer and a mini-excavator with a single operator, and you can't road around the job site quickly the way you can with a loader-backhoe. A loader-backhoe is more comfortable to operate than a skid-steer, digs deeper than a mini-excavator and cranes more weight.

Zak: The first consideration when purchasing or renting a piece of equipment should be the application it will be used in. An equipment owner needs to utilize the machine that is best suited for a specific application. There are some areas where a skid-steer loader would be preferable to a backhoe loader and vice versa. For example, if the job has limited space, a smaller machine would be preferable. In general, compared to a skid-steer, a backhoe has higher loader lift capability than a purpose-built backhoe. If the owner is strictly trenching with the hoe and has no need for a loader, than a mini-excavator might be the right machine. However, a backhoe loader is a multi-purpose utility machine that can do the work of both a backhoe and a loader. In addition, one of the hardest resources to find today is a qualified operator. If the owner can't find one qualified operator for the skid-steer, where is he going to find a second operator for the mini-excavator? A backhoe-loader requires one operator on the job as opposed to two needed for the skid-steer and the excavator. Another thing to keep in mind is that the time, materials and money required to maintain one backhoe is far less than the time, materials and money required to maintain two machines. A final point is the potential to "road" the backhoe-loader from one job site to another can't be duplicated by a skid-steer or mini-excavator without the use of a truck and trailer.

Tyler: If you are digging trench all day and rarely need to move the machine very far, then a mini-excavator may be the machine for you. However, it's hard to beat the versatility of a backhoe on today's job sites. From unloading pallets from trucks to finish grading, and all points in between, you can count on the backhoe to be a very capable tool. Another variable to consider is the need to quickly move the tractor from one location to another for the next job. You don't need a truck to transport a backhoe. There are other considerations: Will there be a need for truck loading? Does the customer already have a number of attachments in their fleet that fit a backhoe? Is there compaction needed for the trench or digging areas? Of course, all the answers to these questions depend on the needs of the customer. If you add a skid steer into the mix, then you have immediately doubled your daily maintenance, and may have to hire a second operator. If not, then either the skid steer or the mini excavator is sitting idle. The transport question again raises its head, requiring either a truck, or large pickup and trailer which also require their own maintenance. There are also double the parts requirements to have on hand. Operating one piece of equipment is easier to maintain than two.

You can also order your backhoe with a hydraulic quick coupler if you are in need of different attachments. Of course, if you need to get into really tight areas, then a skid-steer would be preferable. In my opinion, these machines all complement each other, and you don't always have to make the decision whether to get a backhoe or a mini-excavator/skid-steer combination. In the end, it comes down to specific needs.

What is the most popular size of loader-backhoe today?

Schaefer: The 14- to 15-foot segment is the biggest in the industry.

Zak: I agree, the 14- to 15-foot backhoe-loader class is still the most popular size in the market today. In 2003, 14- to 15-foot backhoes accounted for more than 80 percent of industry sales.

Tyler: The 14-foot backhoe remains the most popular size. We find the independent rental companies prefer the standard model for their needs, while owner operators and larger fleets gravitate towards units with enhanced operator comfort and extra power which tend to be ordered with more optional equipment.

Is demand increasing for compact loader-backhoe models?

Schaefer: We've found that this category does seem to be growing, but the 14- to 15-foot category remains the heart of the market. We also recognize that customer demands change, and we continuously engage in product development to meet the needs of our customers.

Zak: In 2003 the 0 to 13-foot backhoe-loader class represented about 3 percent of the total backhoe industry. Previously many backhoe-loader manufacturers dropped compact product lines due to a substantial decline in the industry. In 1996, in conjunction with the rental distribution growth, some manufacturers reintroduced compact products and this segment of the industry grew to 4,121 units, only to drop again in 2001 to 173 industry units. In 2003, the industry saw a moderate growth to 621 units.

Tyler: Yes, Deere's 10-foot dig depth compact backhoe sales have increased in line with all construction equipment.

How are today's loader-backhoes better than models sold five years ago?

Schaefer: Today, models are more stable and offer greater flotation which is greatly appreciated by utility contractors and others working in soft or wet conditions. A larger cab and canopy provide more leg room and turnaround space to allow the operator to switch easily between backhoe and loader operation. Case is continuously looking for ways to offer our customers more productivity, performance and comfort, while making equipment operate with reduced emissions and greater efficiency. New loader-backhoes meet Tier II emissions requirements and provide improved operator comfort and pilot controls for increased productivity.

Zak: New generation modes are more productive and offer controllability, power, speed; the pilot-operated joystick controls are easier to operate; and they give operators the ability to change control patterns on sit. Certainly, they provide far superior comfort levels and lower noise in the operator's station; are more versatile because of features like the integrated tool carrier and quick coupler. We've also seen growth in the number and types of work tools available, and these machines make it easier to access service points and have longer service intervals.

Tyler: We are finding that our customers are seeing the benefits of operator comfort and other options that enhance productivity. In general, the standard backhoe used to be ordered with a canopy, mechanical linkage for the backhoe controls, two-wheel drive and a standard dipperstick. Today, we see more cabs, mechanical front-wheel drive and extendible dippersticks. One of the biggest changes from five years ago is the introduction of pilot controls. Many customers are now aware of the relationship between keeping the operator comfortable and increasing productivity. If you can stay in the seat longer, you can get more work done. One of the goals here is to reduce fatigue by allowing the operator to maintain a more upright posture in the seat, rather than leaning over manual controls, as well as reducing the motion needed to operate the backhoe with the use of joysticks. Another convenience that pilots allow is the ability to change from a "backhoe" control pattern to an "excavator" control pattern with the flick of a switch. This enables operators with different preferences to hop on the machine and immediately be productive. Historically, the only way to change control patterns was to order your machine one way or the other. Deere has also reduced maintenance requirements as one enhancement to give our customers low daily operating costs. In addition, we have continually improved our backhoes to increase reliability and to provide our customers with the maximum uptime on the job site.

How do you expect the market for loader-backhoes to change over the next five years?

Schaefer: There has been an increased demand for improved performance, ease of maintenance and precise control, outstanding visibility and increased power and versatility. We will continue to reinvent the loader-backhoe to expand its versatility and work on operator comfort, lower maintenance costs and other issues that increase resale value, profitability and productivity for the end-user.

Zak: We are looking for the backhoe-loader industry to continue its history of growth. Caterpillar's utilization of innovative technologies will continue to allow for more productive machines and greater profits for backhoe owners.

Tyler: Looking back, we can see that rarely does the backhoe market stay static for long. We expect the current rise in the market to continue, but obviously this growth will not last forever. I believe that while the 14-foot backhoe will remain the most popular size for many applications, 15-foot and 17-foot models continue to sell well, and our 10-foot model is competing well in markets for applications where space around the machine may be at a premium. As far as the technology is concerned, there will be an increasing focus on emissions regulations, which will dictate changes to the engines as we move from Tier II certification through Tier III and beyond.


Loader-backhoe manufacturers:

Case, (262) 636-6772, or circle number 128

Caterpillar, (309) 675-1000, or circle number 129

John Deere, (309) 748-0114, or circle number 130
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Author:Griffin, Jeff
Publication:Underground Construction
Geographic Code:1USA
Date:Aug 1, 2004
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