Is it time to invest in a refurbished forklift fleet?

Each industry has its own set of accepted truths. These are the things that are self-evident – the obvious responses. The issue is that yesterday’s truths may be obsolete, and what appears to be common sense on the surface may be significantly more complicated upon closer examination. When faced with a potentially costly decision such as the purchase and maintenance of your forklift fleet, it is prudent to consider both options. The industry is evolving, and established truths should be reconsidered. Additionally, your options have expanded, and the simple answers of the past may no longer be the best solutions.

The Fallacy of the Single Manufacturer

Most operations with a sizable forklift fleet choose a primary new truck manufacturer (for example, Toyota or Hyster for pneumatic/cushion trucks, Crown or Raymond for electrics). While dealing with a single company simplifies the process of arranging purchase or lease agreements, convenience is not the primary consideration. The primary concern is maintenance.

Maintenance costs are supposed to be covered upfront in full service leases. Ideally, they enable you to schedule and budget for maintenance and then forget about it for the duration of the lease. This lovely image has two flaws. For starters, the majority of full service leases do not cover repair costs for components that are out of factory warranty or for wear items such as brakes. You can never be certain of the cost of maintenance.

On the surface, this is another reason to choose a single supplier, as it means you will only need to stock one set of parts and train your personnel on one machine (or at least machines from a single manufacturer). While this will save you some money, at what cost?

Not all forklift manufacturers excel at all of the functions a forklift performs in your operation. Simply put, there are too many variables. Electric vehicles are quiet, inexpensive, and environmentally friendly, but have a limited range. Turning radius can become a significant factor in some narrow aisle warehouse applications. Turret trucks may be required in extreme cases.

To obtain the most efficient vehicle for each job, you must first determine the features and characteristics required for that job, then purchase the required number of trucks from the manufacturer who produces the best forklift with those features and characteristics – and then repeat the process for each job in your operation. A facility with multiple locations could easily end up with four or five different lift truck manufacturers. Is this the beginning of the beginning of a maintenance nightmare? Not always.

Bear in mind that you are still using a single brand of fork lift for a given task, and because you have chosen the brand that performs the best for that function, your maintenance costs for that brand are likely to decrease. Periodic service requirements are identical, and component failure is less likely to occur if the vehicle is more appropriately designed for the application.

Maintaining a larger inventory of parts may cost a little more initially, but should result in no significant additional expense over time. In terms of training, it is possible to specialize in that area as well. For instance, rather than training two people on a single brand of maintenance, you could train each of them on one of the brands in use – at little or no additional cost.

New vs. Refurbished Equipment

Another long-held belief that may no longer be true is that while refurbished forklift trucks are less expensive than new ones, they are less reliable and thus not a good investment.

With the rising cost of capital equipment, reconditioning used lift trucks has developed into a lucrative business. Only a few years ago, the market for reconditioned forklifts was not large enough to justify the expense of establishing an assembly line capable of disassembling, inspecting, and reassembling a vehicle with sufficient quality control to ensure reliable operation in heavy use conditions.

The term refurbished has a variety of connotations. Before considering this option, ensure that the unit has been completely disassembled, sandblasted, painted, and rebuilt. Even the engines should be completely disassembled, refurbished, and repainted to ensure they function properly and look brand new. Purchasing used forklifts can be risky, but it does not have to be.

Third parties have been refurbishing trucks for small users who cannot afford new units for years. They had to do it independently to ensure quality, and the market for refurbished trucks was extremely limited. That statement is no longer accurate. The market for reconditioned trucks has grown to the point where factory reconditioned forklifts are now available at a fraction of the price of new trucks. Additionally, they are available in quantities that should appeal to a fleet operator.

The quantities are sufficient, and the price is certainly appealing, but what exactly are you getting when you purchase a refurbished forklift truck? Is this the point at which you can end up in a maintenance nightmare? Again, not always.

Renewed vehicles have been driven for a period of time, akin to a shakedown cruise, during which the vehicle’s weak components are replaced. As a result, the unit becomes more reliable. While it is obvious that a refurbished truck has a shorter useful life than a new one, consider the following scenario. You pay one-third the price of a new unit when you purchase a refurbished unit. You have already gotten past the initial wave of high maintenance costs associated with the run-in phase. You maintain it regularly and retire it perhaps a year sooner than you would a new unit, avoiding the final stage of high maintenance as the unit approaches the end of its useful life. You have made significant capital investment savings, and your maintenance costs may actually decrease.

Brand Names

I would like to address one final accepted truth regarding the issue of maintaining a fleet of forklift trucks – brand name versus off-brand parts. It seems self-evident that an operation that operates a specific brand of forklifts will be safer stocking spare parts from that manufacturer, even if they are slightly more expensive. Thankfully, this is not always the case.

Many of my manufacturing friends and customers are concerned about China’s rise to prominence as a competitor in recent years. However, the same pricing that frustrates buyers of forklifts about China as a competitor can benefit buyers of forklifts. For years, factories in China have been manufacturing parts for other name brand trucks. Now, they are beginning to sell direct to the United States at significantly lower prices than the name brands.

Take note that these are frequently the same people who created the brand name components. The components are not less expensive as a result of their lower quality. They are more affordable as a result of the distribution strategy. There is no dealer commission. There is no forklift manufacturer that uses exorbitantly priced spare parts as a profit center in order to reduce the cost of new trucks and to maintain brand loyalty.

With these lower spare part prices, there is less reason to fear increased maintenance costs associated with a fleet of forklift trucks that is multi-manufacturer and/or refurbished. More than ever before, it is possible to build a fleet around the single most important question: what do forklifts actually do in your operation, and which forklifts – new or refurbished – can do the job(s) most effectively and economically?

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