The rows of backhoes, bulldozers, trucks and graders that stretch along kilometres of laneways make Ritchie Bros.’ massive Nisku yard look like a giant Tonka Toys parking lot.
The record-setting, 10,000-plus pieces assembled for the company’s five-day sale this week look impressive, but also illustrate something industry insiders have known for years — the Edmonton region is one of the world’s largest industrial auction centers.
“This is equipment central, so to speak, so when people … are looking for used equipment, they know over time this is a hub,” said Brian Glenn, Ritchie’s senior vice-president for Western Canada.
The Vancouver-based company last year moved $731-million worth of equipment through its 80-hectare Nisku facility, up from $569 million in 2014.
That gives the site about 14 per cent of the firm’s multibillion-dollar total sales.
While Orlando, Fla., typically hosts the world’s largest auction over several days each February, more machinery moves annually through Nisku than any of Ritchie’s other roughly 40 locations.
“You look at the province of Alberta alone, the equipment population, regardless of which industry you’re in, is probably greater than anywhere in the country,” Glenn said.
One key reason is that big pieces are usually too expensive to ship far for sale.
Almost half the items purchased from Ritchie Bros. in Edmonton last year went to out-of-province customers and 13 per cent left the country, almost entirely to Americans with their strong dollars.
Ritchie Bros. isn’t the only firm contributing to Edmonton’s importance in the international auction industry.
Osman Auction Inc. moved last December to a new $22-million, nine-hectare facility on 199 Street, adding an auction ring with a state-of-the-art audio-visual system and doors that roll open to show bidders each piece of equipment driving past, similar to the setup at Ritchie Bros.
‘Everybody’s downsizing’
General manager Jeff Spiller expects a record sale May 25, although he can’t provide numbers.
What’s good for the auction industry doesn’t necessarily mean good things for the ailing Alberta economy.
“All the oil and gas equipment has just accumulated. Now, unfortunately, a lot of it’s being liquidated,” Spiller said.
For example, “somebody who owned 20 graders because they needed it for their business now only needs six … Everybody’s downsizing.”
Family-owned Michener Allen Auctioneering Ltd., which runs 13 sales a year from facilities in Calgary and in Acheson near Edmonton’s western boundary, expects to handle $50 million to $60 million worth of industrial equipment this year.
Edmonton has always been their biggest location, co-owner Wade Michener said.
He said the local auction industry creates jobs and a higher international profile for the region.
There’s work “in transportation of equipment and clean up, and … hotel rooms,” he said.
“And the exposure the city gets to the world, especially on the Internet — I think it’s been put on the map.”
The web accounts for a growing percentage of auction sales. In 2015, about 55 per cent of sales from Ritchie Bros. Edmonton auctions, or $402 million, were made online, compared to 47 per cent — $270 million — the year before.
American online auction house IronPlanet, which has sold $4 billion US worth of material since 2000, held its first live auction in Edmonton last fall after merging with Cat Auction Services.
Its work includes marketing used machinery for Finning International, the world’s largest Caterpillar dealer.
Still, many people like to come to see the machinery for themselves, kick the tires, put the hydraulics through their paces and listen to an auctioneer’s mesmerizing torrent of words before plunking down $130,000 for a loader.
Some do inspections in the days before a sale or send an agent, then bid from their offices or home, while others sit in the plastic seats and signal their interest by hand or a nod.
They’re attracted by the chance to find a deal, the opportunity to network or the chance gather information about the possible value of their own fleets.
“You get to find out what’s happening. You get a feel for what the economy is like,” said Edmonton’s Bernie Briggs, who works in heavy equipment rentals.
“You can read what some politician said or your banker says, but this is reality. This isn’t theory.”
