In an effort to earn the trust and the business of every customers, we offer a series of articles that are designed to share some of the important things we’ve learned.
We’ve been in the forklift truck business for more than thirty-five years and we have learned a lot. One of the key things we’ve discovered is that the more a customer knows about forklift trucks the beer we can serve them. Customers that are savvy and understand all the aspects and nuances of the business are our best customers. We have also learned that exceptional customer service makes all the difference in the world to our customers. So, to serve you better, we’ve produced a series of articles aimed at arming end users of forklift trucks with the knowledge they need to become educated consumers. And as one local retailer we used to know always said “an educated consumer is our best customer”.
Forklift Maintenance 101
If you load or unload tractor trailer trucks or railcars or move product in your warehouse or plant, then at some point you’ve had to call a forklift service company for repairs or maintenance. If you’re a 3rd Party Logistics Company, manufacturing plant, food processor or product distribution center then you’ve probably had to call them a lot. In some cases, forklift costs may be in the top 10 highest expenses on your P&L. If you’re like a lot of people we’ve meant, the issues of forklift maintenance, if not being done properly, are really ruining your day. Here’s a synopsis of some of the things we’ve learned of the forty years we’ve been doing this:
1. Comparing labor rates doesn’t tell you much.
The fact is, the labor rate is only one factor in this complex equation. Where most of the other factors are subjective. If company A has a $100.00 per hour labor rate and company B has a $125.00 per hour labor rate, most people would say company A is cheaper by 25%. That might be true, if you also had a hard and fast objective standard for how long it should take a technician to do a specific job. But nobody does. If company B sends out a highly skilled and motivated technician to diagnose and repair a problem and he does it in 2 hours, but the company A tech takes 3 or 4 hours to do the same job, who is cheaper? There are an infinite number of ever-changing subjective variables in this exercise such as; how much sleep did the technician get? did they have to leave to pick up parts? what sort of physical condition are they in? how long did it take them to enter and exit the warehouse? It goes on and on. But this is often the measure customers use to evaluate and choose between companies. Suffice to say that the simplest and most widely-used comparison to distinguish between forklift service companies, price, is completely irrelevant and essentially useless.
2. Everybody pays for travel:
To take the above example a little further, what our sales people often run into is the objection “the other guy’s labor rate is lower than your rate and they don’t charge me for travel.” It’s a nice thought. But again, “a pig in a poke,” so to speak. The most expensive thing a forklift technician does is drive to a job. He’s wearing tires, using fuel, depreciating the value of his vehicle, creating insurance exposure, paying tolls and getting paid a technician’s wage for doing a driver’s job, while producing no income. Regardless of whether stated or not, you’re paying for travel. It’s in there somewhere. So, if you have a lower labor rate with a company that doesn’t charge travel charges and you still can’t figure out why your maintenance costs are so high, then maybe you need a company with a labor rate that tells you right up front, we charge for travel. Remember, you will pay for the travel one way or another. It is best to have every cost shown to you upfront and honest.
3. You don’t have to call the OEM to get your forklift fixed.
We’ve been hearing this one for thirty years. We walk into a customer location and they continue to tell us “Oh no, we have to use the dealer. They said that they are the only ones who can service this, or it voids the warranty.” or “No one is allowed to access their software. We don’t have the passwords and codes” or some permutation of the two. This of course is untrue. Neither Forklift manufacturers nor their dealers can compel you to use them for service. Often when a service customer of ours gets new forklifts that we are not an OEM dealer for, they are more comfortable with us triaging the repairs and letting them know if something should be covered under warranty. Manufacturers warranties are limited to defects in workmanship during the manufacturing process and warranty repairs that do not significantly impact maintenance costs to end users over the life of the machine. It is illegal for forklift dealers to lock you out or refuse to give you software codes or passwords for forklift trucks you’ve purchased, unless you’ve signed an agreement that specifically states this.
4. If you’re only considering the purchase price when you buy, you’re only considering half the cost.
Over the life of a forklift truck, the total maintenance cost is spread out and will generally be pretty close to the initial purchase price of the truck. A $25,000 forklift with a useful life of 7 years uses 15,000 hours over that term, assuming a high cycle operation (using 2,000+ hours per year). That machine depreciated to zero over the term. This depreciation adds up to about 1.66 per hour or a little less if the machine has some salvage or scrap value at the end of term. Most users cycle at 10,000 hours and 5 years. But the costs work out in the same range. That’s at least the cost of maintenance on a per hour basis for a high cycle operation. 1.66 is probably low by a dollar or more. Likewise, this does not include fuel or power consumption. That’s why picking the right service provider is so important. Even simple things like propane system maintenance, improperly done or not done in a timely manner, can have enormous costs over five to seven years, even in a small fleet. This is due to both downtime AND fuel consumption. For electric forklift users, this is analogous to battery maintenance. Having a service company that takes the time to evaluate all the aspects of your operation and perform maintenance in an efficient and timely manner can save substantial sums over the life of fleet. Likewise, downtime generates real costs. Think of it this way. You don’t really pay for forklifts. You pay for the USE of those forklifts. Any downtime, even an hour, results in a loss. You are not producing income while a forklift is sitting there unused. And this is increasing your costs. It’s a double whammy. Service companies that habitually respond late or poorly to service calls and always seem to need to order more parts or just leave machines down for days and weeks on end, can really cost you. Carefully consider the forklift trucks you need before you buy. But don’t forget that the quality of the service you receive once you actually start using them can have as much or more impact on total costs then the purchase price of the machine.
At Accurate Lift Truck we’ve always operated on the principal that the value of forklift trucks is differentiated by the quality of the organization that supports and maintains that truck. Accurate is a service-centric organization and we deliver value by delivering products that are wrapped in the value of our service. When it comes to maintenance, our product is a skilled technician that arrives on time in a van fully stocked with the tools, parts and other items required to keep your forklifts running efficiently. That technician is provided with a high level of back office support, a critical component of our value equation. This ensures timely parts delivery, rental truck support when trucks are down or unexpected needs arise. It also ensures data on costs and anything else the full support of a back office, that has years of experience in all aspects of materials handling, can provide. If forklift maintenance issues are giving you headaches, give us a call, we can help.