Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Can you answer these questions: Exactly how much do you spend on your lift truck fleet each year? How much do you spend on each truck? In an eight-hour shift, how much time does each truck actually spend moving product? Are trucks sitting idle in your facilities "just in case"?
If you can't come up with the answers, you're not alone. Specialists in lift truck fleet management report that a surprising number of DC managers are unable to provide a detailed accounting of their fleet costs and usage patterns. Yet knowing the answers to those questions is especially important these days, and for a very simple reason: Managers are under intense pressure to control their industrial truck fleet expenses. But in order to manage these costs, they first have to know what they're spending.
It comes as no surprise, then, that customers are turning to providers of fleet management services to help them make the most of their assets. Sales of new trucks may be down, but vendors say they're seeing an upswing in demand for systems and services that collect and analyze lift truck data.
"We know that buyers are not buying, but that doesn't mean purchasing [executives] and CFOs aren't looking at what they're spending," observes Michael McKean, manager of fleet marketing and sales for lift truck maker Toyota Material Handling USA.
This pressure from the top has led companies that previously resisted investing in fleet management tools to reconsider, says Scot Aitcheson, director of fleet management for Yale Materials Handling, which manufactures a broad line of industrial trucks. "I can tell you that consistently, customers ... want to be engaged, and they want visibility. They need to have data. They are really making what they do more scientific."
These days, more and more DC and fleet managers are feeling the heat, vendors say. "With the economy the way it is, a lot of warehouses and DCs, especially in the home improvement and retail sectors, have felt a lot of pressure to cut down on overhead, reduce maintenance costs, and reduce fleet costs overall," says Joe LaFergola, manager of business and information solutions for lift truck manufacturer Raymond Corp.
Shock and audit
The first step in any cost-cutting initiative is to gather detailed data across all facets of the operation. There are two ways to approach this task. One option is to bring in fleet management specialists, either independent consultants or experts affiliated with industrial truck dealers. The other is for DCs to take on the task themselves, using vehicle management systems that collect and analyze operating data. These systems typically include a device installed on each truck that captures information and transmits it to fleet management software, which then produces a variety of reports. (For more on these systems, see "remote control," September 2008.)
Typically, data analysis begins with on-site audits that track truck operations over 30 to 90 days—long enough to provide an accurate picture of how individual trucks are being used and how the fleet as a whole is performing. The object is to create a baseline against which specific savings can be measured.
With accurate data in hand, managers can identify areas that are ripe for improvement. They can determine which trucks have the highest maintenance costs, figure out if the fleet is correctly sized and if the equipment is appropriate for the job, measure drivers' productivity, and track causes of avoidable maintenance and additional costs (like damage caused by operators to product, racks, and the trucks themselves).
The results of these audits sometimes come as a shock to managers, vendors say. In a white paper titled 5 Ways to Reduce Costs of Your Industrial Vehicle Fleet, I.D. Systems, a developer of vehicle management systems, cites data showing that in an eight-hour shift, a truck typically is in motion for just two hours and is moving a load for only one.
And that's just the tip of the iceberg. Aitcheson says—and other fleet specialists agree—that it's not uncommon for these audits to show that a given fleet is 20 percent (or more) larger than necessary. Nor is it unusual to find short-term rental vehicles on the floor for months at a time. Aitcheson even tells of one customer that spent $27,000 in a single year on maintenance for a seven-year-old truck.
Such ignorance is certainly not bliss. In fact, it's downright expensive, says Stan Garrison, manager of fleet sales for Hyster Co. "There's no point in hanging onto a truck past its useful economic life," he says. "That drives up ownership costs and productivity costs because of downtime."
One step at a time
Collecting the information needed to analyze fleet costs is one thing. Using the data to make changes in fleet operations and driver behavior is quite another. Despite the obvious benefits, it's not always easy to get everyone on board. McKean says that when it comes to "selling" a fleet downsizing program to operations managers, the key is having accurate performance data in hand. "If we can prove utilization is high and the fleet is up and running every day, then perhaps some trucks can go away," he says.
An effective cost-cutting program does not necessarily require jumping in with both feet. There's nothing wrong with taking it one step at a time, says Aitcheson. "For a company that wants to pursue [a fleet cost-reduction program] but does not want to commit to all the processes and procedures, it could be as simple as a national preventive maintenance program," he says.
Garrison is of the same mind. He notes that getting rid of older trucks in stages can help overcome managers' fears that a downsizing program will disrupt day-to-day operations. "One of the most difficult things we [deal with] is to get a buy-in from operations," he says. "The floor managers' job is to get stuff out the door, and it takes a little bit of time to earn their trust and let them know we're not just going to leave them hanging out there."
Editor's note: For more information on conducting a lift truck fleet audit, see "lean fleets," February 2009.
Autonomous forklift maker Cyngn is deploying its DriveMod Tugger model at COATS Company, the largest full-line wheel service equipment manufacturer in North America, the companies said today.
By delivering the self-driving tuggers to COATS’ 150,000+ square foot manufacturing facility in La Vergne, Tennessee, Cyngn said it would enable COATS to enhance efficiency by automating the delivery of wheel service components from its production lines.
“Cyngn’s self-driving tugger was the perfect solution to support our strategy of advancing automation and incorporating scalable technology seamlessly into our operations,” Steve Bergmeyer, Continuous Improvement and Quality Manager at COATS, said in a release. “With its high load capacity, we can concentrate on increasing our ability to manage heavier components and bulk orders, driving greater efficiency, reducing costs, and accelerating delivery timelines.”
Terms of the deal were not disclosed, but it follows another deployment of DriveMod Tuggers with electric automaker Rivian earlier this year.
Manufacturing and logistics workers are raising a red flag over workplace quality issues according to industry research released this week.
A comparative study of more than 4,000 workers from the United States, the United Kingdom, and Australia found that manufacturing and logistics workers say they have seen colleagues reduce the quality of their work and not follow processes in the workplace over the past year, with rates exceeding the overall average by 11% and 8%, respectively.
The study—the Resilience Nation report—was commissioned by UK-based regulatory and compliance software company Ideagen, and it polled workers in industries such as energy, aviation, healthcare, and financial services. The results “explore the major threats and macroeconomic factors affecting people today, providing perspectives on resilience across global landscapes,” according to the authors.
According to the study, 41% of manufacturing and logistics workers said they’d witnessed their peers hiding mistakes, and 45% said they’ve observed coworkers cutting corners due to apathy—9% above the average. The results also showed that workers are seeing colleagues take safety risks: More than a third of respondents said they’ve seen people putting themselves in physical danger at work.
The authors said growing pressure inside and outside of the workplace are to blame for the lack of diligence and resiliency on the job. Internally, workers say they are under pressure to deliver more despite reduced capacity. Among the external pressures, respondents cited the rising cost of living as the biggest problem (39%), closely followed by inflation rates, supply chain challenges, and energy prices.
“People are being asked to deliver more at work when their resilience is being challenged by economic and political headwinds,” Ideagen’s CEO Ben Dorks said in a statement announcing the findings. “Ultimately, this is having a determinantal impact on business productivity, workplace health and safety, and the quality of work produced, as well as further reducing the resilience of the nation at large.”
Respondents said they believe technology will eventually alleviate some of the stress occurring in manufacturing and logistics, however.
“People are optimistic that emerging tech and AI will ultimately lighten the load, but they’re not yet feeling the benefits,” Dorks added. “It’s a gap that now, more than ever, business leaders must look to close and support their workforce to ensure their staff remain safe and compliance needs are met across the business.”
The “2024 Year in Review” report lists the various transportation delays, freight volume restrictions, and infrastructure repair costs of a long string of events. Those disruptions include labor strikes at Canadian ports and postal sites, the U.S. East and Gulf coast port strike; hurricanes Helene, Francine, and Milton; the Francis Scott key Bridge collapse in Baltimore Harbor; the CrowdStrike cyber attack; and Red Sea missile attacks on passing cargo ships.
“While 2024 was characterized by frequent and overlapping disruptions that exposed many supply chain vulnerabilities, it was also a year of resilience,” the Project44 report said. “From labor strikes and natural disasters to geopolitical tensions, each event served as a critical learning opportunity, underscoring the necessity for robust contingency planning, effective labor relations, and durable infrastructure. As supply chains continue to evolve, the lessons learned this past year highlight the increased importance of proactive measures and collaborative efforts. These strategies are essential to fostering stability and adaptability in a world where unpredictability is becoming the norm.”
In addition to tallying the supply chain impact of those events, the report also made four broad predictions for trends in 2025 that may affect logistics operations. In Project44’s analysis, they include:
More technology and automation will be introduced into supply chains, particularly ports. This will help make operations more efficient but also increase the risk of cybersecurity attacks and service interruptions due to glitches and bugs. This could also add tensions among the labor pool and unions, who do not want jobs to be replaced with automation.
The new administration in the United States introduces a lot of uncertainty, with talks of major tariffs for numerous countries as well as talks of US freight getting preferential treatment through the Panama Canal. If these things do come to fruition, expect to see shifts in global trade patterns and sourcing.
Natural disasters will continue to become more frequent and more severe, as exhibited by the wildfires in Los Angeles and the winter storms throughout the southern states in the U.S. As a result, expect companies to invest more heavily in sustainability to mitigate climate change.
The peace treaty announced on Wednesday between Isael and Hamas in the Middle East could support increased freight volumes returning to the Suez Canal as political crisis in the area are resolved.
The French transportation visibility provider Shippeo today said it has raised $30 million in financial backing, saying the money will support its accelerated expansion across North America and APAC, while driving enhancements to its “Real-Time Transportation Visibility Platform” product.
The funding round was led by Woven Capital, Toyota’s growth fund, with participation from existing investors: Battery Ventures, Partech, NGP Capital, Bpifrance Digital Venture, LFX Venture Partners, Shift4Good and Yamaha Motor Ventures. With this round, Shippeo’s total funding exceeds $140 million.
Shippeo says it offers real-time shipment tracking across all transport modes, helping companies create sustainable, resilient supply chains. Its platform enables users to reduce logistics-related carbon emissions by making informed trade-offs between modes and carriers based on carbon footprint data.
"Global supply chains are facing unprecedented complexity, and real-time transport visibility is essential for building resilience” Prashant Bothra, Principal at Woven Capital, who is joining the Shippeo board, said in a release. “Shippeo’s platform empowers businesses to proactively address disruptions by transforming fragmented operations into streamlined, data-driven processes across all transport modes, offering precise tracking and predictive ETAs at scale—capabilities that would be resource-intensive to develop in-house. We are excited to support Shippeo’s journey to accelerate digitization while enhancing cost efficiency, planning accuracy, and customer experience across the supply chain.”
Donald Trump has been clear that he plans to hit the ground running after his inauguration on January 20, launching ambitious plans that could have significant repercussions for global supply chains.
As Mark Baxa, CSCMP president and CEO, says in the executive forward to the white paper, the incoming Trump Administration and a majority Republican congress are “poised to reshape trade policies, regulatory frameworks, and the very fabric of how we approach global commerce.”
The paper is written by import/export expert Thomas Cook, managing director for Blue Tiger International, a U.S.-based supply chain management consulting company that focuses on international trade. Cook is the former CEO of American River International in New York and Apex Global Logistics Supply Chain Operation in Los Angeles and has written 19 books on global trade.
In the paper, Cook, of course, takes a close look at tariff implications and new trade deals, emphasizing that Trump will seek revisions that will favor U.S. businesses and encourage manufacturing to return to the U.S. The paper, however, also looks beyond global trade to addresses topics such as Trump’s tougher stance on immigration and the possibility of mass deportations, greater support of Israel in the Middle East, proposals for increased energy production and mining, and intent to end the war in the Ukraine.
In general, Cook believes that many of the administration’s new policies will be beneficial to the overall economy. He does warn, however, that some policies will be disruptive and add risk and cost to global supply chains.
In light of those risks and possible disruptions, Cook’s paper offers 14 recommendations. Some of which include:
Create a team responsible for studying the changes Trump will introduce when he takes office;
Attend trade shows and make connections with vendors, suppliers, and service providers who can help you navigate those changes;
Consider becoming C-TPAT (Customs-Trade Partnership Against Terrorism) certified to help mitigate potential import/export issues;
Adopt a risk management mindset and shift from focusing on lowest cost to best value for your spend;
Increase collaboration with internal and external partners;
Expect warehousing costs to rise in the short term as companies look to bring in foreign-made goods ahead of tariffs;
Expect greater scrutiny from U.S. Customs and Border Patrol of origin statements for imports in recognition of attempts by some Chinese manufacturers to evade U.S. import policies;
Reduce dependency on China for sourcing; and
Consider manufacturing and/or sourcing in the United States.
Cook advises readers to expect a loosening up of regulations and a reduction in government under Trump. He warns that while some world leaders will look to work with Trump, others will take more of a defiant stance. As a result, companies should expect to see retaliatory tariffs and duties on exports.
Cook concludes by offering advice to the incoming administration, including being sensitive to the effect retaliatory tariffs can have on American exports, working on federal debt reduction, and considering promoting free trade zones. He also proposes an ambitious water works program through the Army Corps of Engineers.