In some cases, the ergonomic and safety features that let
operators today drive and handle loads faster than in the
past may make older trucks obsolete, Schwieterman says.
In high-volume multishift operations, these features may
boost productivity enough to warrant replacing older
trucks, she says. And if you plan to use a forklift differently—for more shifts, increased hours, or a new application—first consider whether the current truck will be up to
the task or should be replaced, she adds.
EXHIBIT 1
Lifecycle of a forklift
THE FINANCE ANGLE
The decision to retire a forklift should take into account
not only the factors mentioned above, but also a truck’s
“book” value and its resale value. One common problem,
McKean says, is that a company’s finance department may
insist on keeping a lift truck on the books for seven or
more years until it is fully depreciated, without considering
the vehicle’s hours, maintenance costs, or resale value.
That means fleet managers may be told to put thousands
of dollars into repairs because a lift truck has several more
years to depreciate, even though the maintenance costs
might be high or the trade-in value may be considerably
less than its book value. “Once a truck is over a certain age,
the trade-in value drops significantly,” Rowan says. To help
make the case for replacement, he suggests, show your
finance people how rapidly maintenance costs will rise and
the trade-in value will decline while an older truck remains
on the books.
To bring some clarity to the economics of lift truck
ownership, forklift makers have put together charts to
help fleet owners find the sweet spot—where all of the factors affecting a lift truck’s value and productivity are
favorable—as well as determine when a truck has reached
the end of its economic life. See Exhibits 1 and 2 for a couple of examples.
Exhibit 1 maps maintenance, ownership, and total costs
per hour over the life of the truck. The point where the
total cost is lowest is the best time to retire a forklift, say the
experts interviewed for this article. After that, total costs
will only rise, and the longer you hang onto a truck, the
more it will cost to maintain and operate.
Exhibit 2 segments the trucks in a fleet into green, yellow, and red zones denoting peak (keep), declining
(watch), and poor (replace) performance. Which category
a truck falls into depends on its productivity and maintenance costs. As their productivity declines and maintenance costs rise, they move into less desirable categories.
Keep in mind that fleet segmentation may not automatically translate into replacements, because a company’s capital expenditure planning will influence whether replacement purchases will be approved. “How many trucks you
leave in the yellow and red zones will be partly based on
whether you have enough dollars to replace X number of
trucks,” Markison explains.
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
Lowest cost
of ownership
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Economic life
Physical life
Maintenance cost per hour
Ownership cost per hour
Total cost per hour
SOURCE: UNICARRIERS AMERICAS CORP.
EXHIBIT 2
Productivity cost cycle
High
Maintenance costs
Productivity
Maintenance
Low
Operating hours
Peak performance zone Declining performance zone
Poor performance zone
SOURCE: HYSTER CO.
Does this sound like fleet managers need a degree in
finance to do their jobs? It all might seem a little daunting,
but experts say digging into costs is worth the trouble.
Given the relationships among maintenance, operating, tax,
and other costs associated with forklift ownership, a manager who wants to run the most productive fleet at the lowest cost will benefit from understanding how all of these
pieces fit together. ;
