A Word from the General Manager - July 2014

July 1, 2014

Brian Isard

As part of our ongoing discussions about equipment purchases in our industry, this month we will look at aspects of forklifts purchasing.

Over the past 30 years I have had a hand in purchasing just about every type of forklift on the market, Linde, Nissan, Toyota, Hyster, Crown, Raymond, and Caterpillar and I have dealt with a good number of the companies handling forklift sales and service across Canada. I have managed electric forklift fleets but in the main I have worked with 5000 lb. “sit down" forklifts. 

In the early days I was focused in finding a lift truck that provided value for money and a very good service department which is the key to making sure that truck uptime is maximized and driver productivity remains high. 

However since then I have learned to pay attention to three other aspects related to the decision making process:

1) Forklift safety factors such the manufacturer's limitations on the truck, the load being carried, adequate stopping distances, operating surface conditions and features such as horns affecting pedestrian traffic inside the plant.

2) Forklift maintenance programs and by a maintenance program I mean plant leadership focused on operator training and supervision, to ensure truck are not damaged and a robust planned maintenance program  which are key to keeping operating costs low.

3) Driver training support in providing training programs that help operators better understand both the general and the workplace specific operating characteristics of the forklifts and the consulting arrangements that are available to help with meet the requirements of the local regulatory agencies.

Over the years I have followed some best practices that I can share, 

Define Your Needs First 

  • How heavy and what size are your loads? How high do you have to lift? In determining the capacity that you need, keep in mind that typically, forklifts are rated on a 24" load center. For example, a forklift rated 5000 lbs. will lift a maximum of 5000 lbs. at a 24" load center. As the forks are raised or the load moves away from the mast of the forklift, the capacity drops off quickly so it is critical that you define the lifting capacity you require in your operation.
  • Will you be using it indoors, outdoors or both”? Cushion (rubber, indoor) tires are for use on concrete and can be driven on asphalt to a certain extent. Pneumatic (air, outdoor) tires are designed for use on asphalt, hard packed dirt or firm large-stone gravel. These units are also "higher profile" than cushion forklifts. All-terrain forklifts, with large tractor-type tires, are needed for work in sand, loose gravel and for construction sites.
  • How much room do you have to maneuver inside your plant and what type of trailers will you be loading/unloading? Make sure your forklift mast height can handle all of the variety of trailers you are handling. 
  • How many hours per day will it be used?

Determine Your Fuel Choice 

  • Internal combustion engine forklifts may run on gasoline, diesel, and liquid propane (LPG) or liquid natural gas (LNG).  They are less expensive to purchase, but their operations costs are higher due to fuel costs and the installation of refueling stations if required.  
  • However, they can be refueled easily at on-site fueling stations or with on-hand LPG or LNG canisters.  An internal combustion forklift will be required for loads over 15,000 lbs. and generally has better acceleration and speed.
  • Most suppliers have a Cost of Fuel calculator to help you determine the cost of fuel as a contributor to the operating costs of a forklift.

Compare Forklift Performance

  • The largest cost of operating a lift truck is neither its acquisition cost nor its maintenance costs but is in fact the labor, which can account for up to 70-75% of the costs to operate the forklift. So I recommend doing a trial with a loaner and run a test with your major activities to see how the truck performs. Track the time to complete a half dozen major tasks in your plant then obtain some feedback from your drivers and this will give you some important feedback on which trucks perform better.
  • Review your record of parts defects especially on transmissions and brakes to determine equipment failure rates.

Evaluate the Dealer 

  • What is the dealer’s record for after sales service, their access to parts inventory policy and their service call response time?  Learn about the skill level and number of their technicians and try and get a handle on who will be servicing your trucks as this simple factor has a major influence on uptime. 
  • Consider the prescribed maintenance schedule and maintenance program being offered and skills required from service technicians determine whether you used an independent or a dealer’s service program.
  • Employers are responsible under their provincial occupational health and safety legislation to ensure that not only are forklift operators and supervisors properly trained but they are also responsible to ensure proper procedures are in place for maintenance and repair of forklifts used on site. In managing this responsibility, the independent or dealers service program is a critical partner in ensuring the employer meets their legal responsibilities to ensure the forklifts are mechanically safe and can demonstrate the capability to support a proper maintenance records system.

Consider Your Financing Choice 

  • There are as many different financing schemes as there are pallet sizes and you might want to have an accountant help you with this area. This is where a thorough understanding of the number of operating hours on a daily basis will be of benefit.
  • Leasing forklifts for 36 to 60 months depending on anticipated annual usage is very common, where basically the customer is only paying for the usage and at the end of the term they turn it in and get new units before the high cost of repairs period kicks in. These leases can be structured with or without a maintenance agreement. A finance company owns the equipment during the lease period is ultimately responsible for selling the asset at the end of the lease to recoup at least a predetermined residual value or greater if the condition of the equipment value will allow it. A proper maintenance program is a real benefit in keeping the residual value of the forklift high at the end of the lease.
  • Short Term Rentals define as less than one year rental period but there are long term rentals programs for greater than one year available as well. Most of these are financed but the assets belong to the dealer & their balance sheets but offer the dealer flexibility to exchange equipment during agreement term.

Of course there are other considerations that I haven’t mentioned but I learned that it  pays to be well armed and educated when acquiring a new forklifts.

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