LIFT TRUCK TRENDS

Before the recession of 2008 and 2009, the results of a lift truck usage study would have been an excellent reflection of how fleet managers are planning to upgrade their current fleets over the next 12 months. However, when you ask fleet managers about their relationship with lift trucks these days, they say that much depends on how the future takes shape.

According to Logistic Management’s 2nd Annual Lift Truck Usage Study, much of future purchasing activity will be shaped by what happens when the recession ends. Neither lift truck sellers nor their customers are sure economic recovery is imminent, and that insecurity was implied in almost every answer to the survey. Apart from the numbers, many comments reflected the sentiment: “I’m waiting to be convinced that recovery is real and my purchase will be justifi ed.”

The reluctance of lift truck buyers and managers to upgrade their fleets is resulting in machines working well beyond their economic service life: 10- year-old trucks are certainly common these days. According to the 552 respondents, some of the toughest challenges resulting from this hesitation include:

• "Balancing the need for high performance from the fleet and the need to limit spending."

• "Maintaining the aged fleet we own until we feel able to update to a lease."

• "The ability to bring in replacement vehicles to keep the age of the fleet in check."

• "Parts are not as available for trucks over 10 years old."

End users are not only worried about the survival of their older fl eets, but that of their lift truck suppliers. Dealers are the lifeline to uptime for many end users, but sometimes these users' survival strategies put their suppliers at risk.

Jim Shephard, president of Shephard's Industrial Training Systems in Memphis, recalls the case of one client that was planning a major lift truck purchase: "They told me they're not going to buy those new trucks after all. They just shut down one of their plants and they're going to move the lift trucks from that site to another and see what they can make of them."

That's not an uncommon view, based on the survey results. Almost half (46 percent) of respondents indicated that they keep their lift trucks 10 years or longer. Shephard believes that these fleet managers are in for a big reality check when business starts coming back if they don't get serious about maintenance and training practices – and start appreciating depreciation.

Much like a car, put enough miles on a lift truck and trade-in value drops drastically. "That old equipment in the field will fade away within a year of a comeback," Shephard says

TRAINING ISSUES

There will also be a temptation to keep lift trucks rolling without investing in proper operator training. But let’s be clear: not only will skimping on training not save money, it will cost more.

“Companies aren’t training as well, and they’re not maintaining as they should,” Ken Van Hook, president of Safe-T-Consultants in Humble, Texas says. “If it runs, it’s considered good. They may do preventive maintenance every three months instead of every month. As a result, there is an increase in accidents due to poor maintenance.”

If a fatality is involved, legal action is usually taken within six months. Both Van Hook and Shephard are often called upon as expert witnesses during legal proceedings. “In the litigation I’ve been involved in, operators have not been trained because the companies have downsized,” says Van Hook.

Shephard agrees. “A lot of times companies will pull their horns in on training because they’ve laid off a lot of folks and they have skeleton crews,” he continues. “Any time you have a guy in a training class, you’re paying someone else overtime. So they’ll ask, ‘What can we do to get this training program over in two or three hours?’ They’re not looking for conditions that need to be improved.”

Judging by the service attributes that were indicated as the most important in making purchasing decisions, the survey respondents tend to agree with Shephard’s assessment. Only 44 percent cited “training materials/programs” as highly important. Serviceability, parts availability, ease of maintenance, and productivity were the highest scoring service attributes among more than 80 percent of respondents.

Again, that’s the economy talking. In the lift truck buyer’s mind, he’s being practical. Look at it this way: Many operators who were trained two years ago aren’t driving lift trucks today. The budgets for training have been cut because the workforce has been cut. In this economy, supervisors (or others who can be quickly taught the controls) are driving lift trucks.

MEASURE TO MANAGE

For safety and productivity to be managed effectively, they must be measured. The survey asked: “Do you use any kind of technology to measure fleet performance?” Only 17 percent said yes; and of those, 39 percent involved vendorprovided systems, 31 percent were home-grown, and 21 percent required paper-based tracking. For those who don’t measure fleet performance, there were plenty of rationalizations:

• "Not enough units to measure."

• "We don't see the need. We like the brand of truck we use and this is not an issue."

• "Cost-to-benefit ratio has not been there."

• "Right now the supplier with whom we have a complete maintenance agreement with provides us a quarterly assessment statement of hour usage, parts repaired, labor, etc. We use that instead."

Shephard is an optimist, however, and believes as business comes back, relationships with dealers will become more important to fleet managers. Energy costs will also become more important, and these managers will put in more sophisticated analytical tools to manage them.

"They'll have to change warehousing concepts to lower energy costs," Shephard says. "Some may not be able to go from LP gas to electric because of the initial cost of the electrics. But if they change their logistics systems, they'll be looking at running trucks fewer hours and rotating their fleets."

That means balancing out lift truck usage so the overall fleet ages more gracefully. The technology is there today to help users monitor lift truck activity and it tends to pay for itself – even the life cycle of batteries can be monitored.

POWER OPTIONS

It was clear from the fi ndings that many survey respondents have their eyes on future power alternatives. Fifty-eight percent indicated they are interested in converting their fleets to another power source. The favorite candidates (when widely available) are lithiumion batteries (33 percent), hybrids (32 percent), and fuel cells (23 percent).

For now, however, fleet managers can still be more cost efficient in what many see as the tail end of the down economy. The lowest hanging fruit can be found by being smarter about balancing labor and equipment usage.

Take trailer loading, for example, where much of the work is still singlelayer loading. Shephard says that this is a great opportunity to make better use of pallet trucks. However, our survey indicates that only 14 percent of respondents said pallet trucks were most commonly in use at their facilities, while 35 percent said electric-powered counterbalanced trucks were their vehicles of choice. This indicates labor may not be getting rationed productively.

Consider how long it takes someone to prepare a trailer for loading. While an employee is doing this, there may be nobody pulling orders, moving product, or staging pallet loads.

“There’s a lot of wasted time if you have one person doing everything,” Shephard says. “But if you have two people, you have fewer trucks in the warehouse and you pull just as many – if not more – orders while the worker loading trucks can pick up and load with a pallet truck. Fleet cost would go down and quality of loads would be a lot better.”

SQUEEZING OUT LIFE

Even if respondents took Jim Shephard’s advice, chances are they wouldn’t buy brand new trucks to establish that balance. When asked how much they plan to spend on lift trucks through 2010, 48 percent said less than US$25,000.

That means the first surge in sales the suppliers can expect post-recovery will be in parts, says Van Hook. “End users will lease used equipment for a year to see how stable things will be,” he says.