Though they serve as critical elements in many material handling operations, forklifts can come with many potential hidden costs, such as maintenance and operator salary — in total, costs can reach as high as $250,000 annually per machine!
Despite these expenditures, more and more companies are making use of forklifts; a recent Peerless Research Group survey of material handling managers found that 69% of respondents planned to acquire a new forklift in the near future, with a per-respondent average of seven planned purchases, up from six the year prior.
When it’s time to add or replace a forklift at your facility, it’s important to not only consider these costs but to take into account usage, initial investment and equipment availability as you assess your different acquisition possibilities. With these factors and respondents' average forklift purchase quantities in mind, we’ve outlined the four best options for acquiring a new forklift for your facility.
Buy
The first and most obvious option is to purchase a forklift. Purchasing outright allows users to more easily maintain consistent forklift costs: Factors like fuel, preventative maintenance, and operator salary typically do not change significantly from month to month, making it simple to manage operational forklift costs.
Purchasing also reduces the risks associated with equipment damage. A dent in owned equipment presents no real issue, but a dent in rented property could result in extra expenditures. Full-service options can also help in controlling forklift cost.
There are some disadvantages to buying, however. Purchasing outright requires a significant amount of available capital as new forklifts can cost anywhere from $10,000 to $100,000, or well-established credit and the willingness and ability to take on debt. Plus, as equipment ages, its technology will become outdated and may fall out of compliance with evolving Occupational Safety and Health Administration (OSHA) standards.
There’s also the option of purchasing a used forklift. Used forklifts cost much less than new ones, but as Toyota-Lift of Minnesota Director of Service Kyle Thill points out about purchasing used forklifts, “a used lift truck comes with a history that you will likely not know.”
Rent
Forklifts can also be easily rented. Benefits of renting include minimal credit requirements, both short- and long-term rental options, and easy access to the most up-to-date, modern equipment. Renting a forklift can also reduce costs in certain areas, as there’s no need to maintain an in-house mechanic and users generally aren’t responsible for maintenance costs.
However, the specific equipment you want may not always be available, and prices can fluctuate, making it difficult to estimate overall costs over time. There’s also the possibility that operators will not be familiar with forklift controls from different OEMs, leading to damaged products, production delays, and even potential injuries.
Lease
Leasing a forklift is also a viable option. Forklift leasing costs are spread out over several years, and servicing is typically included, helping to simplify both cost and cash-flow management. Leasing also allows users to easily access the latest technology, and equipment retirement and replacement processes are greatly simplified.
As with renting, the primary disadvantage here is that the equipment you need may not always be readily available. And, as Thill notes, “lease options are not one-size-fits-all,” so it’s important to shop around carefully for the “lease that is right for you and your business.”
Rebuild
Rebuilding, or, more accurately, remanufacturing, is often overlooked but is another viable forklift sourcing method. H&K Equipment Account Manager Mike Roebuck explains the process: “We completely disassemble the vehicle, every part. We then examine all aspects of the machine, adding the latest technology to any components (hydraulics, electronics) that can be upgraded and replacing other parts. The machine is then reassembled, piece by piece, and completely repainted."
Rebuilding lets users get more use out of older equipment while allowing for cost reductions of “around 20 to 40% off the price of a new forklift,” according to Roebuck. Most forklift rebuilders also back their work with warranties.
The primary disadvantage of rebuilding is that different components will age at disproportionate rates. While newly installed components offer long lifespans, pieces that were considered usable at the time of a rebuild and were not replaced have already experienced years of wear. These older components will continue to age at a faster rate than the newly installed pieces, leading to disparate part quality and lifespans. The right supplier can address these concerns and proactively work to prevent such disparate wear.
Making a Decision
Each forklift acquisition method offers its own unique benefits and disadvantages, so carefully consider all options before making a selection to ensure the best fit for your specific application.
It's equally important to conduct proper supplier evaluation so you select a knowledgeable, reliable and quality partner. Yet the Peerless Group Survey found that only 1/3 of respondents are “likely” to conduct supplier evaluation prior to making a decision and slightly more only “somewhat likely.”
The right supplier should not only suggest the best equipment options for your needs based on your facility dimensions, maximum load requirements, and overall usage needs but also offer their recommendation on the best acquisition option.
Avoid potential issues down the road. Begin evaluating your forklift supplier options today on Thomasnet.com. You’ll find both dealers and OEMs, local and regional suppliers.
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