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Faulty forklifts may flood auctions

Thursday, 24 Feb 2011 ( #502 ) - Brisbane, Queensland, Australia
Local News Story
GraysOnline has, in some instances, included statements that items are ‘not flood affected’ to alleviate any concern from the outset.
Australia’s forklift industry is likely to see a deluge of flood-affected forklifts hitting the market via auction, as insurers and private sellers seek to dispose of damaged goods.

Brian Talbot, of Starline Forklifts, is among those in the industry concerned that end users may get ripped off if sellers don’t fully disclose when forklifts have been flooded.

He tells News it’s likely some flood-affected forklifts may get cleaned up, repaired to a degree, then sold via auction without the seller being honest about the product’s water exposure.

"We have inspected these forklifts at various dealers and advised they all need a complete rebuild, wiring, hydraulics, drive train, brakes, gauges, etc. So people buying off websites won’t know the trouble they are buying."

Ross Grassick, MD of Lencrow Materials Handling, says he expects to see more flood-affected forklifts being sold in coming months.

He says corrosion around electrical components is a warning sign a forklift may be flood affected.

He tells News the company, whose Brisbane office was inundated with water during the Queensland floods, is not selling flood-affected forklifts to the public.

"We have written off any unserviceable machines and sent them to scrap. We believe non-disclosure of this type of damage is not the right thing to do."

He says Lencrow has already disposed of $50,000 worth of machines.

Brisbane forklift dealer Steve Cunliffe, of Fork Force, whose business also was flood affected, says it’s imperative sellers declare if a forklift has been flooded.

"Over the next six months, I’d advise buying only from established dealers who provide a warranty that the equipment has not been affected by flood.  

"Get it in writing or don’t get it, is my motto."

Cunliffe says he has a workshop full of flooded forklifts that people want him to repair. "They obviously don’t have insurance and just want their machine back in operation. We’ll try and repair them but won’t give a warranty on that work."

One of Australia’s leading auctioneers, GraysOnline, tells News that, after the Queensland floods and Cyclone Yasi, the company is starting to see a range of flood affected or damaged items being offered for sale via auctions.

"For example, we have a sale pending of [about] 40 late-model forklift units that were affected by floodwaters," says Damian McCarthy, director, industrial division.  

He says it is still too early after the floods to tell whether buyers are overly concerned about purchasing forklifts in auctions.

"However, it is to be expected buyers’ concerns may start to arise more in coming months as more flood-damaged stock hits the market place.

"Over recent weeks, where relevant, we have, in some instances, included statements that items are ‘Not Flood Damaged’ to alleviate any concern from the outset."

He urges auction buyers to be alert and ensure they deal with established, reputable auction businesses to minimise the risk.

"In the case of sales of flood-affected or damaged stock, GraysOnline will endeavour to ensure this is clearly stated in sale overviews and product descriptions."

He says the company ensures all information about a sale that is displayed on its website, including the sale overview, asset descriptions and photographs, is as extensive as possible and any flood impact on assets to be sold is highlighted.

However, McCarthy says GraysOnline does not conduct mechanical assessments of items to diagnose the potential level of damage from flood inundation, "although, as far as possible, we will detail the nature of the flood impact on items in lot descriptions".

He says in all auctions, items are sold on an "as is" basis, so buyers must consider all the sale information and exercise care when assessing purchase decisions.

"GraysOnline will always provide an opportunity for buyer inspections of assets and, particularly for insurance claim stock, we recommend inspections where possible."

He says all sellers must enter into an agreement confirming they will provide true and correct descriptions of assets and not provide misleading or deceptive descriptions.  "If there is any suggestion items may be flood damaged, we will insist on full disclosure or, alternatively, refuse to conduct the sale."

He says for the company’s OH&S processes, if powered items of plant (including forklifts) have been significantly affected by water, unless they are tested and declared safe for use, in certain circumstances the items may be sold as "for scrap, or parts only".

Komatsu Forklift Australia product manager Gary Hodge tells News buying any item from auction has inherent risks and buyers should take all steps possible to verify the quality of products purchased at auction.

The company, whose Sumner Park branch was affected during the Brisbane floods, has several flood-affected forklifts but no plans to dispose of them via auction.

Hodge says buyers seeking reliable, quality forklifts will not buy at auction but purchase from reputable companies. "All new Komatsu forklifts come with a four-year/4,000 hour warranty."
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