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.
Sometimes, all you need is the right partner to solve your logistics problems.
In 2021, global paint supplier Sherwin Williams faced driver and hazardous material (hazmat) capacity constraints: There simply weren’t enough hazmat drivers available in its fleet to maintain the company’s 90% fleet utilization rate expectations for key partner store deliveries while also meeting growing demand for service. Those challenges threatened to become even more acute in the future, as a competing paint supply company began to scale back its operations in the Pacific Northwest, leaving Sherwin Williams with an opportunity to fill the gap.
The paint supplier needed a logistics partner that could help it overcome the shortage of hazmat drivers while also helping to manage its West Coast trailer pools, out-of-region runs, and ad-hoc freight. It also needed a solution that would meet quarterly and annual fleet budgets.
SCALING UP
Enter ITS Logistics, a third-party logistics service provider (3PL) that offers supply chain solutions for drayage, network transportation, distribution, and fulfillment across North America. ITS proposed a combined owned-asset and asset-light approach that would provide Sherwin Williams with the equivalent of 21 additional drivers. The 3PL would leverage its carrier network to overcome the shortage of hazmat capacity while also certifying its own drivers via a three-month process. Further, ITS would help manage Sherwin Williams’ trailer pools and coordinate carriers, providing the paint company with a single point of contact for transportation.
The project would address cost concerns as well: “ITS Logistics aligned its solution with Sherwin Williams’ budgetary cadence and offered a quarterly business review to align on price structure, adding a level of transparency and trust to the relationship,” according to a case study the partners released earlier this year.
The companies soon sealed the deal and launched the program.
Not long after that, Sherwin Williams began to feel the effects of the anticipated challenges in the Pacific Northwest—but the company was prepared. When the competing paint supply company shuttered its operations, causing demand for Sherwin Williams’ products to spike, ITS injected a blend of owned trailers and carrier power to alleviate equipment challenges, cover all locations and regions, and help the paint supplier scale to meet volume.
CLOSING THE GAPS
The project has helped Sherwin Williams rapidly scale its capacity, meet fleet utilization requirements, manage trailer pools, coordinate carriers, and flex to meet spikes in regional demand.
And the results speak for themselves.
“ITS integrating themselves into our fleet was instrumental in helping increase our outbound volume by 18.4 million pounds [year over year] in the last seven months of 2023,” said Ted Taxon, regional transportation manager at Sherwin Williams, in the case study. “This equated to approximately 460 truckloads of extra freight, a large portion of which ITS [handled] on an ad-hoc basis with no operational constraints or quality issues.”
The partnership also helped Sherwin Williams maintain a 90% fleet utilization rate with big box retailers—an increase from less than 70% prior to the partnership’s launch.
Robots are revolutionizing factories, warehouses, and distribution centers (DCs) around the world, thanks largely to heavy investments in the technology between 2019 and 2021. And although investment has slowed since then, the long-term outlook calls for steady growth over the next four years. According to data from research and consulting firm Interact Analysis, revenues from shipments of industrial robots are forecast to grow nearly 4% per year, on average, between 2024 and 2028 (see Exhibit 1).
EXHIBIT 1: Market forecast for industrial robots - revenuesInteract Analysis
Material handling is among the top applications for all those robots, accounting for one-third of overall robot market revenues in 2023, according to the research. That puts warehouses and DCs on the cutting edge of robotic innovation, with projects that are helping companies reduce costs, optimize labor, and improve productivity throughout their facilities. Here’s a look at two recent projects that demonstrate the kinds of gains companies have achieved by investing in robotic equipment.
FASTER, MORE ACCURATE CYCLE COUNTS
When leaders at MSI Surfaces wanted to get a better handle on their vast inventory of flooring, countertops, tile, and hardscape materials, they turned to warehouse inventory drone provider Corvus Robotics. The seven-year-old company offers a warehouse drone system, called Corvus One, that can be installed and deployed quickly—in what MSI leaders describe as a “plug and play” process. Corvus Robotics’ drones are fully autonomous—they require no external infrastructure, such as beacons or stickers for positioning and navigation, and no human operators. Essentially, all you need is the drone and a landing pad, and you’re in business.
The drones use computer vision and generative AI (artificial intelligence) to “understand” their environment, flying autonomously in both very narrow aisles—passageways as narrow as 50 inches—and in very wide aisles. The Corvus One system relies on obstacle detection to operate safely in warehouses and uses barcode scanning technology to count inventory; the advanced system can read any barcode symbol in any orientation placed anywhere on the front of a carton or pallet.
The system was the perfect answer to the inventory challenges MSI was facing. Its annual physical inventory counts required two to four dedicated warehouse associates, who would manually scan inventory to determine the amount of stock on hand. The process was both time-consuming and error-prone, and often led to inaccuracies. And it created a chain reaction of issues and problems. Fulfillment speed is one example: Lost or misplaced inventory would delay customer deliveries, resulting in dissatisfaction, returns, and unmet expectations. Productivity was also an issue: Workers were often pulled from fulfillment tasks to locate material, slowing overall operations.
MSI Surfaces began using the Corvus One system in 2021, deploying a small number of drones for daily inventory counts at its 300,000-square-foot distribution center (DC) in Orange, California. It quickly scaled up, adding more drones in Orange and expanding the system to three other DCs: in Houston; Savannah, Georgia; and Edison, New Jersey. The company plans to add more drones to the existing sites and expand the system to some of its smaller DCs as well, according to Corvus Robotics spokesperson Andrew Burer.
Those expansion plans are based on solid results: MSI’s inventory accuracy was about 80% prior to the drone implementation, but it quickly jumped to the high 90s—ultimately reaching 99%—after the company initiated the daily drone counts, according to Burer.
“We actually had an incident early on where one of the forklift drivers ran into the landing pad, rendering it inoperable for about a week while the Corvus team fixed it,” Burer recalls. “When we restarted the system, we noticed MSI’s inventory accuracy had dropped down to the 80s. But after flights resumed, accuracy quickly improved back to near perfect.” He adds that such collisions are rare as Corvus mounts landing pads high off the floor to avoid impacts but that accidents can still happen.
Overall, the system has helped speed warehouse operations in two key ways: First, the accuracy improvement means that associates no longer waste time searching for missing material in the warehouse. And second, the associates who used to conduct the physical inventory counts have been reallocated to picking and replenishment—creating a more efficient, and optimized, workforce.
A SAFER, MORE EFFICIENT WAREHOUSE
Robot maker Boston Dynamics is well-known for its Stretch and Spot industrial robots, both of which are at work in warehouses and DCs around the world. Earlier this year, Stretch made its debut in Europe, teaming up with Spot at a fulfillment center run by German retail company Otto Group. The deployment marks the first time Stretch and Spot are being used together—in a partnership designed to improve Otto Group’s warehousing operations by increasing efficiency and making warehouse work safer and more attractive to workers.
The partnership is part of a two-year project in which Boston Dynamics will deploy dozens of its warehouse robots in Otto Group’s European DCs. The first location is a fulfillment site operated by Hermes, the company’s parcel delivery subsidiary, in Haldensleben, Germany—a facility that handles as many as 40,000 cartons of goods on peak days.
At the site, Stretch—which is a mobile case-handling robot—autonomously unloads ocean containers and trailers, using its advanced perception system to pick and place boxes onto a telescoping conveyor inside the container or trailer. Spot—a quadruped robot—helps with predictive maintenance by collecting thermal data and performing acoustic and visual detection tasks throughout the facility to reduce unplanned downtime and energy costs. One of Spot’s jobs is to detect air leaks in the facility’s warehouse automation systems; future duties may include conveyor vibration detection, according to leaders at Otto Group.
Both Stretch and Spot will help the Haldensleben facility run more efficiently, especially during fall peak season when volume increases and work intensifies. The addition of Stretch addresses safety and comfort issues as well: Trailer unloading—a process that entails repeatedly lifting and moving heavy boxes inside a trailer, which can be dark, dirty, cold, and/or hot, depending on the weather—tends to be unappealing to workers. Along with reducing the amount of labor required, automating these tasks will have the added benefit for European facilities of helping them comply with EU (European Union) regulations limiting the amount of time workers can spend in those conditions.
Essentially, the robots are making life easier on the warehouse floor and for the company at large.
“Stretch is going to have a ton of benefits for customers here in the EU,” Andrew Brueckner, of Boston Dynamics, said in a recent case study on the project.
The trucking industry faces a range of challenges these days, particularly when it comes to load planning—a resource-intensive task that often results in suboptimal decisions, unnecessary empty miles, late deliveries, and inefficient asset utilization. What’s more, delays in decision-making due to a lack of real-time insights can hinder operational efficiency, making cost management a constant struggle.
Truckload carrier Paper Transport Inc. (PTI) experienced this firsthand when the company sought to expand its over the-road (OTR), intermodal, and brokerage offerings to include dedicated fleet services for high-volume shippers—adding a layer of complexity to the business. The additional personnel required for such a move would be extremely costly, leading PTI to investigate technology solutions that could help close the gap.
Enter Freight Science and its intelligent decision-recommendation and automation platform.
PTI implemented Freight Science’s artificial intelligence (AI)-driven load planning optimization solution earlier this year, giving the carrier a high-tech advantage as it launched the new service.
“As PTI tried to diversify … we found that we needed a technological solution that would allow us to process [information] faster,” explains Jared Stedl, chief commercial officer for PTI, emphasizing the high volume of outbound shipments and unique freight characteristics of its targeted dedicated-fleet customers.
The Freight Science platform allowed PTI to apply its signature high-quality service to those needs, all while handling the daily challenges of managing drivers and navigating route disruptions.
STREAMLINING PROCESSES
Dedicated fleets face challenges that evolve from day to day and minute to minute, including truck breakdowns, drivers calling in sick, and rescheduled appointment times. PTI needed a tool that allowed for a real-time view of the fleet, ultimately enabling its team to adjust truck and driver allocation to meet those challenges.
The Freight Science solution filled the bill. The platform uses advanced analytics and algorithms to give carriers better visibility into operations while automating the decision-making process. By combining streaming data, a carrier’s transportation management system (TMS), machine learning, and decision science, the solution allows carriers to deploy their fleets more efficiently while accurately forecasting future needs, according to Freight Science.
In PTI’s case, Freight Science’s software integrates with the carrier’s TMS, real-time electronic logging device (ELD) data, and other external data, feeding an AI model that generates an optimized load plan for the planner.
“We’re an integrated data analytics company for trucking companies,” explains Matt Foster, Freight Science’s president and CEO. “We’re talking about AI.”
The benefits of the real-time data are difficult to overstate.
“We’ve been able to execute in the toughest of situations because we’ve got real, live data on how long each event is actually going to take and a system to aid and even automate the decision-making process,” says Chad Borley, PTI’s operations manager. “From what traffic patterns we are battling in the morning and evening with rush hour and things like that, to the impact of additional miles to a route, or even location-specific dwell times, it’s been a huge differentiator for us.”
REALIZING RESULTS
A case in point: the collapse of Baltimore’s Francis Scott Key Bridge in March. PTI was scheduled to go live with a new dedicated account in the area just days after the collapse, which would mean rerouting and the potential for longer transit times. Instead of recalculating based on assumptions or latent data, PTI was able to reroute freight based on real-time information and analytics to give the customer timely updates.
“With the bridge going out, that changed our ability to make as many turns a day as the customer would expect,” Stedl explains. “But one of the things Freight Science could do [was to] quickly [assess] how much of an impact that traffic would have [and] what the turns [would] be based on what’s happening on the ground.
“So we were able to go back to the customer and readjust expectations in a real way that made sense, using data. Now expectations can be reset¾we’re not asking for forgiveness when there’s no reason for it.”
The system’s advanced algorithms make load planning more cost-effective and scalable as well. The platform allows PTI to monitor trucks, trailers, and driver hours in real time, recommending additional loads with remaining driver hours that would otherwise be wasted.
And they’re doing it all with much less. Stedl says tasks that used to require five people and hours of work can now be accomplished by one person in mere minutes, improving productivity and profitability while reducing labor and operational costs.
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”