Never Make Secondhand the First Option

09/11/2011

 

All cars are not created equal. A pre-owned Yugo with 100 miles sits on the lot screaming probable disaster. A used BMW or Cadillac, on the other hand might inspire more confidence in potential owners, even more if they’re factory certified, fixed and repaired by professional car manufacturers. Outfitting a warehouse with used or refurbished rack is a similar process to buying a new car, albeit a more complex process with some benefits and plenty of challenges.

Price is usually the determining factor when buying secondhand warehouse equipment. Smaller companies in the United States and some neighboring countries see the used market as their first option when outfitting storage installations. Used rack might make sense when the components are in good condition, relatively new, not used in a seismic situation (just like one wouldn’t use a secondhand child car seat, in case it was damaged in a previous accident)  or for a specialized system with mixed components from different companies. Most used rack is sold ‘as is’, but some companies offer the option of refurbished storage materials, repainted, resized and re-welded to fit the needs of the client. While this option is more expensive than the ‘as is’ rack, it is still cheaper than new.

Lead times tend to be shorter with used equipment since it’s already manufactured and ready to be shipped. Refurbished materials might take longer, but since they are not being manufactured from scratch, they are more readily available than new.  High fuel prices have also made transportation savings an incentive to go with pre-owned, because secondhand storage systems are usually acquired from a local provider.

Problems arise when installing used equipment. To be able to safely and effectively install a warehouse system, one must know the specifications of the rack being charged. Is it made to sustain 2,500 lbs or 5,000 lbs? Are all the components rated for the same load capacity? What if the safety mechanism is damaged or missing from the end plate on the beam? What if the end connector is not appropriate? These specifications are not only important, they are essential due to new building codes and certification requirements. The Rack Manufacturers Institute, the American Iron and Steel Institute and the American Institute of Steel Construction each publish a steel design specification. All racking systems must comply with these specifications along with local building and fire codes.

Seismic map specifications also affect the material handling industry. Not long ago only a few areas required seismic certification. Now the requirements are stricter and they are tied, not to a zone only, but to a specific physical address. A rack designed for northern California might not pass the requirements for southern California. Seismic calculations and help with necessary permits can be included in the price for new installations. New racking design will be calculated to meet current seismic requirements. Used machinery dealers cannot guarantee the calculations done to their rack or what they were originally designed to support. Testing and consulting fees might prove penny-wise and pound foolish, offsetting the costs of going with used.

To protect one’s investment, there are some steps to take when purchasing a pre-owned warehouse system. Although extremely difficult, it would be helpful to find used rack capacity and documentation online for used rack, make sure the manufacturer is not out of business or the product line discontinued. When going through a used rack broker, ensuring the seller has proper product liability insurance is important. Some distributors sell both used and new rack. Their knowledge of the products also might make them a better choice when deciding where to buy pre-owned racking.

Atlantic Rack, a company that has been in business with Interlake Mecalux for over a decade, sells the company’s used and new products. Atlantic has customers to whom they sold $100 worth of used rack 10 years ago, and those same clients are now buying $16,000 worth of new rack installations.

Being able to test drive Interlake Mecalux products might have enticed companies to come back for new racking when they are ready and able to invest in new facilities. The fact that they choose Interlake Mecalux after using the secondhand versions of its rack is very significant. No one goes back to a brand that has let them down-only to one that exceeded their expectations.

Jessica Jiménez, Atlantic’s sales lead said in a June interview that lower price is what drives the type of rack her customers choose when outfitting a warehouse. Located in Miami, their clients span throughout Florida, Central America and the Caribbean.  Selective rack constitutes approximately 90 percent of the used business for her company, with a small margin of push back. While the cosmetic appearance of the product is not always important, it is imperative that the rack is structurally solid. Jiménez explains that with their reputation on the line, it is only logical to recommend Interlake Mecalux products. “We feel very comfortable with Interlake Mecalux,” Jimenez said, “ it is a product that we stand behind.” Atlantic has Interlake Mecalux used rack on display in their warehouse, ensuring that the client is able to physically see the merchandise to be installed before they purchase it.

The structural strength of the components that Jimenez points out has certainly changed over time. The steel specifications used for rack in new warehouses have been modified over the years. The yield strength, measured in psi (the amount of pressure exerted on an area of a square inch) in older installations has gone from 35,000 psi to a yield of 55,000 psi  in current ones, which makes the rack significantly stronger; this translates into the possibility to build taller structures with greater capacity and more seismic resistance.

Installing new rack in a warehouse has many benefits: better rack quality, more control and beam fit, and higher efficiency which results in a reduction in maintenance costs. Greg Hajdus, engineer for Interlake Mecalux, explains, “New rack has more advantages than used; you know exactly the capacity of the product,” Hajdus added, “Installation is much easier because it’s new. It´s designed for specific applications including all the hardware that is necessary.” In a nut shell, when you buy new, not only do you know what you are getting, you determine what you are installing.

While new rack will usually be a better choice than used, buying an Interlake Mecalux used product, at least, ensures that you are going with the Cadillac of rack. When you start with the highest quality of components, these will endure the test of time with fortitude and stability.

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