Take a close look

Consolidation in the secure destruction industry has put a number of surplus shredders and complete shredding systems on the secondary equipment market. The availability of used equipment provides an attractive alternative to new equipment for those looking to enter the secure destruction industry or to upgrade existing equipment. But, all used equipment is not created equal. Many factors must be considered to ensure the equipment you purchase is suitable for your intended purpose.
 

The basics

For a stand-alone shredder, one should carefully assess the equipment’s capability in terms of throughput capacity, the security level that can be achieved, the electrical requirements and its overall condition.

If these specifications match your requirements, it’s probably a good fit.

On the other hand, shredding systems, whether new or used, are a sum of their individual parts. The big question to ask is, “Do the discreet components work well as an integrated system or are they mismatched?” Even if the equipment is in top condition, it’s a bad fit if the components don’t work well as a team.

For instance, I recently received a solicitation for a used shredding and baling system that consisted of a large 100-horsepower strip shredder with a throughput of up to 8 tons per hour. Unfortunately, the baler was a manual-tie unit with a maximum throughput of 2 tons per hour. In addition, the only way to feed the shredder was via a 95-gallon container tipper. Needless to say, one could never feed 8 tons of material per hour into the shredder with this container dumper, nor could the baler handle that volume of shredded paper. In this case, the only real value of this system was in the shredder itself and not the other system components.
 

Needs assessment

The shredder’s security level should be one of your first considerations. Make sure you understand the difference between strip shredders, pierce-and-tear shredders and single-shaft shredders and how these different types can be arranged within a system for maximum performance.

Carefully consider your throughput requirements in terms of the pounds per hour needed to address the incoming material stream, and add in a factor for inefficiency in system throughput (nothing is 100 percent efficient).

Understand the labor required to operate the system in a manner that will deliver your desired throughput, which will determine your true operating costs. As a stand-alone component, shredders can be rated by the manufacturer to handle up to 10 tons or more per hour. Think carefully about the labor resources required to effectively prepare, deliver and feed a given volume into a particular type of shredder. Remember that each time the material is physically touched by an employee, a handling cost is associated. If everything coming into your plant is already packaged in dump-ready containers, your choice of equipment could be considerably different than if most of your material is coming in the door boxed on pallets.
 

Budget realities

The budgeting process can be challenging, as pricing for used equipment can vary greatly. Knowing the cost of equivalent new equipment can be a starting point to formulate a realistic equipment budget. Fully reconditioned equipment, 10 year old or younger with some form of warranty will generally command 50 percent to 80 percent of the cost of new equipment, depending on age and operating hours. From this point, however, many factors coincide to determine the actual market value. Do some Web research to determine market values of comparable types of equipment.

Sometimes, it’s all about timing. Seller duress certainly can be an advantage to a buyer if there is a timeline in play to liquidate the equipment.
 

Equipment condition

Determine the equipment operating hours and look into the service history. Most shredders are equipped with nonresettable running-hour meters that will show you just how long the equipment has been in operation since it left the factory.

Get the shredder’s serial number and consult with the manufacturer’s parts and service department. Most manufacturers have records of parts sold and factory service provided for that particular machine and will be happy to share this information so they can sell you replacement parts.

Look for red flags, such as missing or obliterated serial numbers, missing safety guards or covers or the lack of repair parts and service history, either from the seller or original equipment manufacturer (OEM). For instance, if you find a 10-year-old shredder with 8,000 operating hours and no history of replacement cutters having been purchased, expect to be buying a new set of cutters in the near future.

If possible, physically inspect the equipment and observe it processing material that is similar to what you will process. Check the quality of the shredded product, test for material throughput rates, take photos and listen to the equipment operate with and without material.

If you don’t feel comfortable making these assessments yourself, engage the service of a recycling equipment sales and service professional to test, inspect and evaluate the equipment on your behalf. Be as specific as you can regarding the things that are most important to you as a prospective buyer.
 

The seller

Is the seller the actual equipment user, or are they a reseller? If dealing directly with the user, you may be able to negotiate the lowest price but likely will be buying the equipment “as is, where is,” with no warranty and little to no logistical or technical support.

If you are dealing with an equipment broker, recycling equipment dealer or, in the case of remanufactured equipment, the factory, you can expect to pay more upfront but also should receive a higher level of logistical support for equipment removal, transportation and installation into your facility. In some cases, the OEM can offer the equipment as factory rebuilt with a warranty. While it carries a higher price tag, you’ll gain the peace of mind knowing your equipment will be reliable and productive right out of the box.

In addition to OEMs, some equipment distributors have the capability to rebuild shredders, balers, conveyors and other system components and can handle removal, transportation and installation.
 

Prioritize safety

I cannot overstress the importance of checking all safety components of the equipment and making sure it is structurally sound and mechanically safe to operate. Make sure it is equipped with all the factory-installed safety covers and guards, clearly marked emergency-stop buttons and electrical service disconnects and confirm they are all in working order. This can be tricky if you don’t know what to look for.

Does the equipment come with a manual? If not, can you get a replacement from the manufacturer? You need to know how to safely operate and maintain the equipment.

Remember, too, that safety standards have changed greatly over the years. As a general rule, the older the equipment, the less likely it meets with current safety standards. This is not to say that it can’t be brought up to specification by a qualified equipment dealer or the OEM, but it is something to consider in the big picture. Again, engaging an expert here can pay big dividends in terms of peace of mind and protection for you and your employees.
 

Power up

A common pitfall when buying new and used equipment is not matching up its electrical requirements with the available power supply at your facility. Incompatible voltages and lack of sufficient electrical supply and infrastructure are the most common problems. This is particularly true if purchasing used equipment manufactured for use in the U.S. and intending to use it in Canada or vice versa.

Once again, it is important to seek the help of an outside resource, such as an electrical engineer or a qualified industrial electrical contractor.

Power upgrades or electric system changes can be expensive, so you’ll want to be prepared with estimates for this work before you buy the equipment.
 

Hidden costs

Nobody likes to be surprised by unexpected costs. I asked our resident service and installation expert, Service Manager Steven Vaccaro, for his take on the most common items that lead to additional expenses that buyers often overlook.

“Freight is one of the biggest variables of any job,” says Vaccaro. “While some smaller equipment can be strapped to a pallet and placed in a van, larger equipment requires a flatbed trailer, which is a huge difference in cost.”

He continues, “Also, don’t forget that heavy equipment will require a forklift or even a crane to both load and unload, plus riggers to perform the work.”

Then there’s the actual shipment details. Vaccaro says, “I suggest using a dedicated carrier with adequate insurance to cover the full value of your investment. Make sure any flatbed loads are tarped to protect the equipment from the weather.”

He adds that if the equipment is being shipped across national borders, buyers should “expect freight forwarding costs and possible import duties, which can be complicated and costly.”

Vaccaro adds, “These are the kinds of things that you just don’t think about until you have to.

“And don’t forget about spare parts and repairs,” he continues. “Unless you are buying fully reconditioned equipment, you can expect to invest at least another 25 percent to 50 percent above the purchase price on parts and service, depending on [the unit’s] age.”

Vaccaro cautions, “The cost benefits from purchasing used equipment go away immediately if there is a major malfunction or injury as a result of operating equipment that is in disrepair.”

If your head is spinning after considering all of these variables, don’t despair. Despite the potential pitfalls, good used equipment can deliver real value at significant savings over new equipment and help you take your secure destruction business to a new level. Making the right purchase comes down to knowing your needs, doing the research and buying the equipment or system best suited to your business objectives.

Jeff Dietterich is president of Advanced Equipment Sales, Souderton, Pennsylvania. He can be contacted at aesjeff@aesales.net.