Lorie Waldrop, general manager, and Hikman Rahman, executive vice president, Terra Construction Group, go over a list of equipment destined for auction with Scott Linder, IronPlanet territory manager for Central Florida.
Terra Construction Group, headquartered in St. Petersburg, FL, is one of the largest site preparation companies in the state. Its three subsidiaries ? Terra Excavating, Inc. and Central Florida Excavating & Fill Dirt, Inc., both in St. Petersburg, and David Barron Land Development, Inc. in Fort Myers ? perform work in full-service civil site excavation, underground utilities, heavy earthmoving, clearing and grading, infrastructure, sewerage systems, roads, highways, parking lots and demolition.
After 36 years in business, Terra has earned a reputation as a ?bail-out? contractor ? the one that gets the job done when no one else can. It has become very adept at handling difficult or complex projects, delivering effective solutions to its clients.
One such project was the $18 million Old Palm Golf and Country Club in Jupiter, FL, which included grading and site preparation for 300 acres, as well as digging and lining 16 lakes. Terra managed to finish the project close to schedule, despite four hurricanes that hit the area during construction in 2004.
?We were forced to pump a lot more water than planned,? says Lowell Whittum, Terra?s director of field operations. ?At one point we had 71 different 12-in. pumps running on that site. It was the largest and most challenging project I?ve ever been involved in.?
?Our crews in the field are second to none, so we get a lot of difficult jobs,? adds Lorie Waldrop, general manager for Terra?s St. Petersburg operations. ?Terra is awarded these jobs because of our capability to execute them, and because of the way we work with our clients.?
In addition to retaining a skilled workforce, Terra continues to thrive by helping its customers to ?value engineer? a project from the start. ?We like to sit down with our clients and get involved with a project early on when plans are still in the design phase,? says Waldrop. ?This helps us to work closely with our clients to reduce costs, avoid budget overages and determine the most efficient way to handle their project.?
For example, when Centex Homes contracted Terra to do site preparation for a housing development, Terra?s estimators met with the Centex design team and engineers to brainstorm ways to reduce project costs. With dirt prices at an all-time high, Terra proposed acquiring the additional dirt needed by changing building elevations and digging lakes instead of paying to have it hauled in. As a result, Centex saved a significant amount of money on the project.
Faster equipment turnaround
To take care of its diverse list of clients and projects, Terra maintains a large fleet of equipment. Between its three subsidiaries, the fleet includes about 300 units with an overall value of approximately $53 million.
Managing this inventory in a timely and cost-effective manner, while getting top dollar for equipment resale, can be a difficult task, says Waldrop. However, Terra has managed to scale equipment needs to match existing project requirements by using IronPlanet, an online auction company.
By purchasing online, Terra is able to quickly acquire the equipment it needs. ?When we order a new package of equipment, it?s very rare that everything is in stock. Typically, we can?t take delivery for three or four months,? Waldrop notes.
Equipment can also be sold off quickly. ?What has worked so well for us with IronPlanet is the ability to sell equipment every other week,? says Waldrop. ?[It] allows us to spread out equipment sales over a period of time to make sure we have all the resources we need for ongoing projects.?
Terra actually saves money by selling equipment online, she adds. In addition to decreased carrying costs such as maintenance, insurance and equipment depreciation, the company saves an estimated 10% on equipment preparation and eliminates transportation costs associated with traditional auctions.
?With other auction services, we have to pay to haul the equipment to the site, then pay again to have it prepped for auction,? says Waldrop. ?We?ve been able to significantly reduce costs by deciding for ourselves how much make-ready work our machines need, then selling them straight off our yard.?
A global marketplace
With a weakened U.S. dollar and a suffering local equipment market, IronPlanet gives Terra access to interested buyers worldwide, creating a more competitive bidding environment and minimizing the effects of the domestic economy.
?We?ve been able to reach a far greater audience of equipment buyers than we did before,? says Waldrop. ?We typically see at least 9,000 visitors at an auction when we sell equipment, which is huge.?
International buyers are often willing to pay a premium price for the used equipment. This is due in part to the detailed information provided. Prior to auction, Terra?s equipment is inspected at its location by a trained inspector, then listed online with a guaranteed inspection report.
Guaranteeing the reports protects both the buyer and the seller by ensuring equipment is represented fairly. It also gives remote buyers more confidence in equipment condition, and ultimately increases its resale value. As a result, Terra has been able to achieve market value price performance or better for its equipment.
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