Lift truck industry in slow recovery mode
At the Material Handling Industry of America’s fall meetings in September, Hal Vandiver, MHIA’s economist, had an interesting observation about the recovery of the materials handling industry: We won’t fully recover until the lift truck industry is back on track.
So, how is the lift truck industry doing?
The answer is that after a nearly 50% drop from the market peak; the lift truck industry is in a slow but steady growth mode. “The industry is tracking this year to sell around 124,000 units from a low of 94,000 last year,” Chance said. “We’re anticipating a modest increase to about 145,000 in 2011.” Chance believes the increases are providing a solid foundation for the future, adding, “We think the recovery will be gradual. We won’t be back to our peak numbers until 2013 or 2014.”
As to NMHG, Chance says Yale and Hyster successfully weathered the recession. “We improved our manufacturing processes and we maintained our R&D budget for product development,” he said. “We introduced new products this year, which included our new electric rider 2-3 Ton in 36-, 48- and 80-volt packages as an alternative to internal combustion engine (ICE) riders.”
In an industry that relies on its dealers, NMGH’s distribution network remained solid throughout the recession. In addition, NMHG maintained profitability in North America. “We think we’ve positioned ourselves well for a recovery,” he said.
Finally, I asked Chance what he believes are the important trends in the industry. He identified three to watch.
Distribution predominates: As a result of the recession, the warehouse distribution segment of the lift truck industry has remained strong – people still need to eat and drink – while the trucks most commonly used in manufacturing waned. As the economy recovers, Chance expects to see an improvement in the manufacturing sector.
Going green: Sustainability is still a board room topic, and one that has been more difficult to translate to the materials handling level. However, companies with an interest in reducing their carbon footprint are looking at electric lift trucks as an alternative to internal combustion engines. Moreover, there is emerging interest in alternative fuels, and “through the Yale brand, we have one of the largest hydrogen fuel cell deployments in the country, with over 200 trucks running completely on hydrogen fuel cells,” Chance said. Down the road, he added, he expects that improvements in lithium battery technology will drive the continued adoption of electric trucks.
Fleet management: NMHG instituted an “in house” fleet management program over ten years ago in response to a growing interest by end users in maintaining a level of performance at a fixed cost. “Today, we’re servicing over 50,000 units,” he said. Chance expects that trend to continue as end users continue to look for ways to optimize their investments and control their capital costs.