Aggregates Manager Digital Magazine
Issue link: https://read.dmtmag.com/i/91809
Tier 4: Will tough regulations make construction equipment resale a quarantine market? by Tina Grady Barbaccia, News and Digital Editor here has been much ado about the Tier 4 final regulations that are coming down the pike and what it is going to mean for the used construction equipment market. With Tier 4 interim standards currently in effect, there are already some "unintended consequences of doing the right thing for the environ- ment," quipped Frank Manfredi, president of Frank Manfredi & As- sociates, as he moderated the "Tier 4 and the Future of Equipment Markets" panel discussion at the Associated Equipment Distribu- tors (AED)/INFOR Software Solutions Executive Forum at the Rosemont Hilton/Chicago O'Hare hotel on Sept. 6. Unintended consequences may mean "quarantine markets," with the United States possibly isolating itself because of its regulations, Manfredi pointed out. During research he has been conducting on the possible effects of Tier 4 engines on the used equipment mar- ket, Manfredi said it occurred to him that Tier 4 machines could not be operated in less-developed countries because low-sulfur die- sel (LSD) is not available. T 37A AGGREGATES MANAGER DIGITAL EXCLUSIVE November 2012 This is significant because it could severely segment and restrict where equipment is able to be sold — as well as its resale value. In a real-time poll of the audience as to whether Tier 4 used equipment will be saleable in Latin America, Africa, and the Middle East, 32.1 percent of the audience said, "Yes," while 67.9 percent said, "No." The United States mandated the use of LSD in 2006, which was a huge change for equipment manufacturers, Manfredi notes. All new diesel applications as of 2007 were required to use LSD. "We believe that few, if any of the countries in Latin America and Africa — and other less-developed countries — don't have access [to low-sulfur diesel fuel]. These engines require more expensive fuel that is not available in traditional export markets." However, panelist Peter Blake, CEO for Ritchie Bros. Auc- tioneers, pointed out free markets will figure out a way to make it work. "If there is a demand, people will figure out how to get the fuel there. Part of the answer is the availability of service. If you