SIC 3536
OVERHEAD TRAVELING CRANES, HOISTS, AND MONORAIL SYSTEMS



This classification comprises establishments primarily engaged in manufacturing overhead traveling cranes, hoists, and monorail systems for installation in factories, warehouses, marinas, and other industrial and commercial establishments. Excluded from this classification are establishments primarily engaged in manufacturing cranes except industrial types, automobile wrecker hoists, and aerial work platforms, which are classified in SIC 3531: Construction Machinery. Also excluded from this industry are those manufacturing aircraft loading hoists, which are classified in SIC 3537: Industrial Trucks, Tractors, Trailers, and Stackers.

NAICS Code(s)

333923 (Overhead Traveling Crane, Hoist, and Monorail System Manufacturing)

Industry Snapshot

The overhead traveling crane, hoist, and monorail system industry includes a diverse assortment of products that fit within a narrowly defined segment of the materials handling equipment industry. Not to be confused with various types of mobile cranes used in construction projects, overhead cranes are variously structured machines that "travel" along a runway structure or pair of tracks located above the work floor of a plant or factory. They are further characterized by the presence of a fixed or trolley-mounted hoisting system that is connected to the tracks by a bridge structure, which consists of either a single or double girder.

The industry manufactures three basic kinds of overhead traveling cranes that accommodate the vast majority of materials handling needs. The first type is the overhead bridge crane, which is fixed to an overhead beam running the length of the building. Generally regarded as the most rugged of all overhead traveling cranes, this class of crane is noted for its ability to cover the entire width and length of a plant. The jib crane is the second variety of crane produced by the industry. It is usually mounted to a wall or pillar and is used to service a smaller area of a plant, usually the area of a single workstation. Gantry cranes, which are mounted overhead and are able to service a particular bay or workstation, comprise the third category.

While overhead traveling cranes are sometimes operated manually, they are usually powered by electricity and can be interfaced with automatic guided vehicles, stacker cranes, and monorails for increased efficiency. Accordingly, hoists and monorails, the other major segments of this industry classification, are often manufactured for use in conjunction with overhead traveling cranes. Employed mainly in an industrial capacity, products in this industry are also employed in stone and concrete pre-casting yards, steel fabricating shops, and storage facilities.

Industry shipments grew consistently throughout in the late 1990s, from $3.13 billion in 1997 to $4.5 billion in 1999. Shipments reached $5.12 billion in 2000. Employment increased from 17,784 workers in 1997 to 22,528 workers in 2000.

Organization and Structure

Geographically, the greatest concentration of hoist, crane, and monorail manufacturing takes place in the five-state region of Ohio, Michigan, Pennsylvania, Illinois, and Wisconsin, where more than a third of all the industry's establishments are located and 3,300 of its 7,900 employees work. California, with only 300 employees, has the most establishments (19). Ohio, the state employing the most people in the industry (1,000), has 17 establishments, as does Michigan (with 600 employees). Texas (600 employees) and Pennsylvania (500 employees) each have 15 establishments.

As a whole, the industry spent over $500 million on raw materials in 1994, which translates to about $3 million per establishment, roughly 40 percent below the average for all construction and related machinery manufacturing establishments. New capital expenditures, just over $59,000 per establishment, also fell far below the larger industry group average of $321,000.

Background and Development

While various types of jib cranes and other lifting devices were installed in foundries during the late eighteenth century, and the overhead traveling bridge crane existed as early as 1860, materials handling systems were not widely used in the United States until its entrance into World War II in 1941. During the 1940s, however, firms that had previously been hesitant to make the large capital investment necessary for implementing an extensive materials handling system were forced to do so in order to meet the production demands of war materials contracts. The fact that the implementation of materials handling systems actually lowered production costs in many cases was only a by-product of the more pressing concern of supplying the military with the necessary weaponry and machinery for winning the war.

New levels of production volume and efficiency demonstrated during the war through the use of materials handling systems led to a phenomenal increase in the use of various types of overhead traveling cranes, hoists, and monorails in the years immediately after. Having demonstrated its potential for lowering production costs during the war, materials handling emerged as the most effective tool for offsetting the rising costs of labor and materials. During this period materials handling research and development efforts evolved into an integral segment of industrial management and engineering education programs as well, legitimizing the discipline of materials handling within both academic and industrial settings.

As technology—especially in the field of electronics—progressed during the 1950s and 1960s, gradual improvements were made in overhead traveling cranes, hoists, and monorail systems, enabling the industry to carve a profitable niche in the larger spectrum of materials handling equipment. As industries were being pressured to increase production while employing the same amount of floor space, equipment that could move materials overhead offered several advantages over its competitors in the broadly defined materials handling industry. While most types of conveyor systems, for instance, occupied a considerable amount of floor space, overhead cranes kept this space free for other production activities. Offering this ergonomic advantage, the hoist, crane, and monorail industry grew into a $500 million a year business by the early 1970s, employing over 16,000 people, according to Census of Manufactures statistics.

As the 1970s progressed, the introduction of computer technology revolutionized the field. While the development of solid-state logic had signaled the end of many of the bulky relay-type controls of earlier years in storage-retrieval systems, the same technology could not be applied to complex one-of-a-kind systems without a relatively high capital investment. The widespread availability of microcomputers, however, solved this problem, enabling cranes to be regulated by programmable controllers. Rather than investing large amounts of capital to perform specialized tasks requiring automation, companies were often able to use existing hardware for a variety of tasks, changing only the computer software to accommodate the desired new function. Largely through the improvements in efficiency engendered by these technological advances, the overhead traveling crane, hoist, and monorail industry more than doubled the value of its annual shipments by the end of the decade, while increasing its production work force by only 7 percent.

Although the 1981 passage of the Economic Recovery Tax—which offered incentives to companies that invested in the modernization and expansion of production facilities—held promise for a strong decade for the materials handling business as a whole, such expectations did not hold true for most segments of the broad industry group. While the conveyor and conveying equipment industry enjoyed steady increases in revenues during the early and mid-1980s, the hoist, crane, and monorail industry lagged behind, suffering nearly a 50 percent decrease in revenue between 1981—the industry's best year of production, with over $1.4 billion in shipping—and 1987, according to Census of Manufactures information. The increased use of robotics, the fastest growing segment of the materials handling industry in the 1980s, was partially responsible for this decline. Revenues for the hoist, crane, and monorail industry steadily improved during the late 1980s, however, as the nation's economy grew, enabling businesses to purchase materials handling equipment they had put off buying earlier in the decade.

The volume of materials handling equipment is generally thought to be closely correlated to the condition of the U.S. economy as a whole. Accordingly, the recessive conditions of the early 1990s resulted in sluggish patterns of growth for all segments of the materials handling market during this period. Lacking the cash flow to justify new purchases of equipment, most companies relied on existing machinery to handle materials handling needs. The hoist, crane, and monorail industry, however, went against this general trend. While shipments for the industry's counterparts in the conveyor and conveying equipment and industrial truck and tractors industries fell 5 and nearly 12 percent, respectively, manufacturers of hoists, cranes, and monorails enjoyed a 20 percent increase in shipments between 1990 and 1991, according to the Annual Survey of Manufactures.

According to Manufacturing USA , 168 establishments, employing 7,900 people, were engaged in the manufacturing of hoists, overhead cranes, and monorail systems in 1994. These companies combined produced $1.07 billion in industry shipments that year, a drop from 1991's $1.21 billion, but a slight improvement over 1992 and 1993. The manufacturing of overhead traveling cranes and monorail systems accounted for about 47 percent of total shipments, as did the production of various types of hoists. Miscellaneous hoist, crane, and monorail products made up the remaining 6 percent.

Many companies made heavy purchases of materials handling equipment in the late 1980s and so made minimal capital investments in the early 1990s. As equipment aged and the economy continued to improve, capital investment rose in the late 1990s. However, much of this investment was in retrofitting of existing equipment, rather than new equipment purchases. Orders increased within the industry in early 1996, rising almost 6 percent in the first quarter over the last quarter of 1995. The renewed health of the U.S. automobile manufacturing industry also translated into an improved financial outlook for the overhead crane, hoist, and monorail industry.

Current Conditions

The industry experienced growth throughout the late 1990s due to favorable interest rates, which fueled the construction equipment market. Congress passed a new U.S. highway bill to increase infrastructure spending, which bolstered spending on this industry. Abroad, select European markets improved, spelling good fortune for this industry. Industry shipments grew from $3.13 billion in 1997 to $5.12 billion in 2000, and employment increased from 17,784 workers to 22,528 workers over the same time period.

However, at least one company began to feel the effects of a tightening economy in January 2000. Facing declining quarterly earnings from $20 million to $15 million and a 25 percent reduction in production due to decreased orders, Terex Corporation of Westport, Connecticut, laid off 20 of its 103 employees in its Conway, South Carolina, plant and took similar action at its 16 other plants throughout the country.

Industry Leaders

Weatherford International Inc., an integrated oil drilling company, led the industry with net revenues of $2 billion in 1998. Its Artificial Lift Systems division, with 1998 revenues of $329 million, received important new projects in early 1999 for YPF in Argentina and for Mobil's Cerro Negro project in Venezuela. Terex generated sales of $1.2 billion in 1998, up $391 million (a 46 percent increase) from 1997 sales. The Terex Lifting division generated 1998 sales of $771 million, up $223 million (a 41 percent increase) from 1997.

Amherst, New York-based Columbus McKinnon Corp. generated sales of $735.4 million in its fiscal year ended March 31, 1999. In May 1999 Columbus McKinnon acquired overhead crane manufacturer Washington Equipment Co. of Eureka, Illinois, which had $16.5 million in sales for fiscal 1998. In February 1998 Columbus McKinnon acquired Univeyor A/S of Arden, Denmark, which manufactures crane systems, among other products. Dover Industries Inc. of Elgin, Illinois, created sales of $718 million in 1997, according to the most recent information available on Infotrac. Manitowoc Company Inc. of Manitowoc, Wisconsin, the world leader in manufacturing lattice-boom crawler cranes for heavy construction and equipment rental markets, garnered 1998 sales of $694.8 million.

Work Force

Total employment in the hoist, crane, and monorail industry declined sharply in the early and mid-1980s, climbed to 8,400 in 1991, fell again in 1992 and 1993, and then rose back to 7,900 in 1994. Of the 7,900 employees of hoist, crane, and monorail establishments in 1994, 4,500 were classified as production workers, while the remaining 3,400 were engaged in technical, managerial, or administrative duties.

The pattern of decline established in the 1980s proved to have lasting damage for the blue-collar work force, whose wages in 1994 (an average of $12.83 per hour) remained well below their 1991 level ($13.45), although they still were well above the total industry sector average of $12.09. In 1994 the average number of employees per establishment in the hoist, crane, and monorail industry was slightly lower than the average for all establishments engaged in the manufacturing of industrial machinery and equipment, according to Manufacturing USA statistics. The average establishment in this sector employed 47 people. In 2000 the industry employed 22,528 people, 15,388 of whom were production workers who earned an average hourly wage of $14.28.

While the recovery of the U.S. economy signaled better times for the materials handling work force as a whole in the late 1990s, blue-collar employment prospects in the hoist, crane, and monorail industry may suffer from the very durability of the products they manufacture. With a life span of 30 years or more, cranes installed in the 1980s may not need to be replaced until well into the twenty-first century. As they face the need for new materials handling functions, companies in the future are expected to "retrofit," or modernize, older model equipment to cut costs.

Consequently, the strongest employment opportunities in the industry in future years will be found, most likely, in the fields of service and technical support rather than in the production of new units. While employment of machine assemblers in the general construction and related machinery industry is expected to increase by almost two-thirds by 2005, significant cuts are expected in almost all other areas, particularly machine builders and operators and clerical staff.

Research and Technology

For an industry whose fundamental hardware components originated more than a century ago, new developments in product technology have, for the most part, occurred gradually over a number of years as the country's material handling needs have changed. According to Clyde E. Witt, senior editor for Material Handling Engineering , "Crane technology has been stimulated through innovative thinking and creative efforts of manufacturers as well as users. Mechanical and technological advances have been a process of evolution, not revolution or major breakthroughs." This is not to say, however, that significant technological innovations have not been made in this segment of the materials handling industry.

The most significant of these changes in recent years occurred, similarly to other manufacturing industries, as a result of the development and advancement of solid state logic and computer technology. Whereas overhead traveling cranes of the past were controlled by bulky relay-type systems, models developed since the 1970s were regulated by highly developed solid-state logic and computer regulated control systems. Although older control systems were sufficient for simple storage and retrieval tasks, they were less successful when applied to production functions, which often required the crane to perform a variety of precise movements by several different components. The development of these new forms of technology enabled overhead cranes to perform these complex production tasks more efficiently by reducing the size of control system hardware and improving its flexibility and durability.

In the 1980s and 1990s control mechanisms for overhead traveling cranes and other types of equipment within this industrial classification were further refined and modernized to accommodate the changing needs of their users. The major developments in this period involved the increased efficiency and wider range of applications for automated cranes regulated by programmable controllers or other computers. Such improvements brought forth the introduction of automated cranes to a wide range of manufacturing environments, servicing locations as varied as an aerospace plant and a textile factory. The widespread acceptance of automated control systems also facilitated a variety of interfacing applications, linking overhead cranes with other types of materials handling equipment, such as monorails, robots, and automated guided vehicles. Promising technological developments of special note in the late 1990s included more sophisticated radio programmable logic controllers, self-propelled floor cranes, cordless and infrared control technology, and retrofitting innovations.

Further Reading

"Columbus McKinnon acquires Danish firm." Modern Materials Handling , February 1998.

Darnay, Arsen J., ed. Manufacturing USA: Industry Analysis, Statistics, and Leading Companies , 5th ed. Farmington Hills, MI: Gale Group, 1996.

Delano, Daryl. "Demand for Materials Handlings Systems, Equipment Strengthens." Modern Materials Handling , July 1996.

"Infotrac Company Profiles," 20 January 1999. Available from http://web4.infotrac.galegroup.com .

Laughlin, Tom. "What's New in Cranes, Remote Controls, and Magnets." Metal Center News , May 1995.

"Manitowoc." The Business Journal-Milwaukee , 12 December 1997.

"New York Firm Buys Eureka, Ill.-Based Maker of Overhead Cranes." Knight-Ridder/Tribune Business News , 11 May 1999.

"Radio Control System Handles Ten Hoists on Monorail." Material Handling Engineering , January 1997.

Semling, Harold V. "Commerce Predicts Good MH Sales Year." Material Handling Engineering , March 1982.

" Sun News , Myrtle Beach, S.C., Business Briefs Column." Knight-Ridder/Tribune Business News , 5 January 2000.

"Terex Corporation Reports 1998 Net Income of $72.8 Million, or $3.25 Per Share, On Revenues of $1.23 Billion." 2 March 1999. Available from http://www.corporate-ir.net .

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

United States Census Bureau. Survey of Manufacturing , 10 February 2000. Available from http://www.census.gov/prod/www/abs/97ecmani.html .

"Weatherford Reports Results for the 1998 Fourth Quarter and Full Year." 18 February 1999. Available from http://www.weatherford.com .



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