About 30 brands of lift trucks for warehouse applications are sold in the United States today. So why are new entrants eager to enter such a crowded field?
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Lift trucks have been around for a long time—Clark Equipment Co. is widely credited as the inventor of the sit-down counterbalanced forklift, back in 1917. In the 100 years since, lift trucks have become both ubiquitous and indispensable. More than half a million forklifts are in use in the United States today, and orders for new equipment have grown to well over 200,000 units annually, according to the Industrial Truck Association (ITA), which represents providers of lift trucks and associated products and services in North America. About 30 brands of lift trucks for warehouse applications are currently sold in the U.S.—some manufactured here and others imported.
Clearly, this is a mature and highly competitive market. Yet in the past few years, new companies have entered the U.S. marketplace, and others that already had a toehold have expanded their presence. What is drawing them here, and why would they want to enter—or expand in—such a crowded field?
ANOTHER RECORD YEAR AHEAD?
The main reason the U.S. lift truck market is so attractive right now is that it's red-hot. The June 2017 report "Lifting America: The Economic Impact of Industrial Truck Manufacturers, Distributors and Dealers," produced by Oxford Economics for ITA, notes that U.S. domestic orders for industrial trucks have grown by 150 percent since 2009, representing a volume increase of 130,000 units. For North America as a whole, 2015 and 2016 were "historic" years for retail sales, with approximately 226,000 and 231,000 units sold, respectively, says ITA President Brian J. Feehan. This year seems primed for another strong performance: North American sales for the first six months of 2017 were a little above those for the same period a year earlier. If that pace continues, Feehan says, sales could surpass 2016's record high.
Several factors continue to push sales upward, according to Feehan and other industry observers. One is the need to replace equipment after years of recession-induced belt-tightening that led companies to try to squeeze more life out of older trucks. Another is the desire to take advantage of technological innovations like telematics, new power sources, and more fuel-efficient designs that can boost productivity and reduce operating and maintenance costs. A third is the growth of e-commerce. With online sales soaring, companies such as Amazon are opening more distribution centers—and that means they're buying entire fleets of forklifts, too. Even companies that expand or reconfigure existing facilities to accommodate e-commerce fulfillment need more forklifts, particularly electric trucks, which are experiencing especially strong sales, according to Feehan.
But what goes up must come down, and it's reasonable to wonder how long the market will continue to accelerate or at least sustain its current performance. Almost every industry is affected by cyclical economic factors, and material handling equipment is no exception. There's also the question, Feehan says, of "how much is too much, and how little is too little"—in other words, what is a sustainable level for the industry. The past few years have seen some consolidation among forklift makers, and if the market becomes too crowded, there could potentially be further consolidation at some point. Still, he says, "all the economic forecasts we get for 2017 through 2019 are pretty positive, and it looks like we'll continue to have a healthy, robust industry for at least the next several years."
WANTED: SOMETHING NEW AND DIFFERENT
But strong demand in and of itself is not enough to assure sales for any newcomer. To break into the market, they must identify a growing need that is not being adequately met, bring something new and different to the market, or both.
BYD Forklifts, which entered the North American market in late 2015, is doing both. In North America, the company offers three counterbalanced rider forklift models and a pallet truck with lithium-ion (l-i) batteries made by parent company BYD Heavy Industries of China, the world's largest manufacturer of rechargeable batteries. Proprietary battery cHemiätry and the first forklifts designed specifically for lithium-ion batteries will position the company to capitalize on the expected high demand for l-i-powered lift trucks, according to Brian Rippie, BYD's sales director, forklifts-North America.
Because BYD designs and builds its forklifts and batteries as a unit, the bright blue trucks allay some of the concerns buyers may have about lithium-ion, Rippie said in an interview at the 2017 ProMat Show in Chicago. For example, the lift trucks' form factors were designed to accommodate lithium-ion batteries' lighter weight, and the battery management system is fully integrated into the forklift, rather than provided as an add-on, he said. A 10-year warranty on the battery and environmentally friendly battery cHemiätry are also among the features that differentiate the trucks from others on the market, he said.
Another "newcomer," France's Manitou, may be a familiar name from its rough-terrain lift trucks, compact loaders, telescopic handlers, and aerial platforms, but now it's aiming to get into the North American warehouse and manufacturing logistics space, too. At ProMat, Manitou Americas Inc. announced that it would be launching four new internal combustion (IC) and 10 new electric forklift models in North America in 2017, with more (including diesel versions) planned for 2018. The company had two of those new product lines—one IC and the other electric—on display at the show.
Manitou's target market is clear: The company's announcement refers to "simplicity and value positioning" that will provide an "alternative to the highly technical forklifts available in the industrial market." Other manufacturers have "value" brands, but Manitou says what will set its forklifts apart is that they'll be designed to the same quality and service standards that its heavy-duty equipment is known for.
Similarly, Germany's Kion Group, the world's second-largest manufacturer of forklifts, is focusing in 2017 and 2018 on gaining a stronger foothold in the U.S. warehousing market. At ProMat, Kion previewed an extensive lineup of brand-new trucks designed specifically for this market—four from Linde (electric and IC models) and a diesel-powered model from its Baoli brand, which made its North American debut in late 2015. Another Linde electric was introduced prior to the show, and the company said it would launch yet another Linde electric, a line of Linde lithium-ion-powered trucks, and two more Baoli models by the end of 2017.
One reason Kion has been slow to expand its market share in the U.S. is that its Linde brand, the top seller in Europe, is often perceived as too high-quality and expensive for the market—a Mercedes-Benz where a Ford or a Volkswagen might do. Kion is addressing that head-on, spending more than $5 million to reconfigure and upgrade production lines at its Summerville, S.C., plant this year and introducing new efficiencies and other cost-saving changes. "[The new models] are the same high-quality forklifts that our customers have come to rely on, but at a price point we've never been able to deliver before," said Kion North America President and CEO Vincent Halma. The company expects that strategy to pay off: Its goal is to increase production capacity in Summerville to 12,000 lift trucks annually by 2020, up from 3,000 in 2015.
ROOM FOR ALL
BYD, Manitou, and Kion are not the only forklift manufacturers that believe there is plenty of room for new providers and new products in the U.S. and North American warehouse markets. Since the end of the Great Recession, others have begun distributing here, including China's LiuGong, which entered the North American market in 2011. Heli Americas, a subsidiary of Chinese manufacturer Anhui Heli, last year signaled its intent to expand in North America when it began hiring engineers for a new U.S. design center; among the center's charges is designing new products for the North American market.
With demand continuing to grow, others are likely to follow, either entering the market for the first time or expanding their product lines. If conditions continue as they have been for the past two years, then there could well be room at the table for everyone.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
The “series B” funding round was financed by an unnamed “strategic customer” as well as Teradyne Robotics Ventures, Toyota Ventures, Ranpak, Third Kind Venture Capital, One Madison Group, Hyperplane, Catapult Ventures, and others.
The fresh backing comes as Massachusetts-based Pickle reported a spate of third quarter orders, saying that six customers placed orders for over 30 production robots to deploy in the first half of 2025. The new orders include pilot conversions, existing customer expansions, and new customer adoption.
“Pickle is hitting its strides delivering innovation, development, commercial traction, and customer satisfaction. The company is building groundbreaking technology while executing on essential recurring parts of a successful business like field service and manufacturing management,” Omar Asali, Pickle board member and CEO of investor Ranpak, said in a release.
According to Pickle, its truck-unloading robot applies “Physical AI” technology to one of the most labor-intensive, physically demanding, and highest turnover work areas in logistics operations. The platform combines a powerful vision system with generative AI foundation models trained on millions of data points from real logistics and warehouse operations that enable Pickle’s robotic hardware platform to perform physical work at human-scale or better, the company says.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."