If your lift truck fleet is typical, you probably have too many vehicles and bigger trucks than you really need, say the experts. A fleet audit can help you find ways to trim the fat.
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.
With peak season around the corner, a supervisor puts in a call for several
lift truck rentals. The trucks arrive and are immediately put to use. After the busy season, the
supervisor leaves the company for another job. But the rented trucks stay in the fleet for weeks,
maybe months, and the rents continue to mount. No one in the operation seems aware that the
rented vehicles are not part of the regular mix of leased and owned vehicles. Supervisors authorize
payments for maintenance. And accounts payable routinely sends a check to the rental company
and never bothers to ask why the DC still has the equipment.
Sound far-fetched? Fleet management specialists say stories like that are more common than
you might think. With DC managers focused first on moving product, fleet productivity and efficiency
can easily become secondary issues.
But with the current intense pressure to reduce costs in a poor economy, now may be a good
time to take a close look at the lift truck fleet to determine if you have the right equipment in the
right place at the right price. And, indeed, fleet management specialists say they've seen renewed
interest in fleet optimization from customers.
"More so than ever," says Scot Aitcheson, vice president of sales and marketing for Yale Materials
Handling Corp. "Customers were not necessarily focused on fleet management a year or two ago.
Now, if there is a possibility to save a penny, they are looking for that."
"Capital expenditures are pretty tight right now, so businesses are going to focus on keeping
their trucks going as long as possible," adds Joe LaFergola, manager of fleet operations for
Raymond Corp. "It is important to have a sound model for understanding whether it is [more cost
effective] to keep a truck or replace it."
Details, details
Implementing a fleet management program can provide savings in any financial environment, says
Mike McKean, manager of fleet management sales and marketing for Toyota Material Handling,
U.S.A. But potential cost-savings come into much sharper focus in a slow economy. The question
is how to find those opportunities.
DC managers can start the process of analyzing their fleets on their own, particularly in small or single-site operations. For bigger operations, it's a bit trickier. But there are places they can turn for help. Most lift truck OEMs offer fleet management services in addition to their equipment lines. Independent fleet management companies also provide services that include fleet evaluations.
These companies offer a number of suggestions on how to proceed with evaluating the current fleet, implementing changes to it, and then keeping the fleet fine tuned. For example, John Russian, manager of fleet marketing for Hyster Co., says his company suggests a five-step process that begins with a survey of current operations, followed by analysis, proposing changes, implementation, and monitoring results.
The first step sounds simple enough, but taking a vehicle count can actually be somewhat complicated for companies with large fleets across multiple locations. Jason Bratton, vice president of business development for BEB Fleet Source Group, which helps clients evaluate their fleets and implement fleet management strategies, says that in order to get an accurate tally, his company literally counts the vehicles in a facility and then works with the customer's dealer to see what's on the books.
Russian says that along with determining the number of trucks in use, the equipment audit should include a detailed accounting of the vehicles' age, operating hours, make and model, and aftermarket attachments. Other questions to ask include: What equipment is owned, what is leased, what is rented? What has existing warranties? What equipment is fully depreciated?
Critical, too, is information on the number of operators and the configuration of the facility. And changes made in the layout of the facility need to be understood. Does it have more narrow aisles, for instance, or raised racks?
Russian also recommends gathering the maintenance history for each truck in the fleet. "The customer may have a total, but not get granular," he says. "We need a good understanding of what is being spent on a specific truck."
The initial survey should also include a careful look at how vehicles in the fleet are actually being used. To help gather the necessary data, several companies have developed remote monitoring systems that automatically collect, transmit, and analyze data about vehicle performance and productivity. Crown Equipment Corp., for instance, offers a wireless fleet management system that captures a variety of operational data from meters installed on the trucks. Matt Ranly, Crown's senior marketing product manager, says the system provides detailed information on how each truck is being used. "It feeds that data back to the warehouse manager so he can make good decisions about equipment."
The results of these studies sometimes contain surprises. Aitcheson of Yale tells of one customer, a manufacturer, that was using one lift truck as a lift table. You may find multiple trucks assigned to tasks where one would do, or trucks that are idle much of the time. And a careful survey may expose other facility issues. For instance, a search for the root cause of high tire expenditures might reveal flooring or dock or drain problems that require attention.
Aitcheson notes that it's important to allow several weeks for the monitoring process. He suggests conducting an evaluation over a 30- or 60-day period to get an accurate picture of fleet operations.
Analyze this
It's not enough to just collect operating data; you have to analyze it as well. That can be done a number of ways. For example, Raymond's approach to analyzing fleet utilization is to look at deadman hours per day. A "deadman" is a safety device on all modern lift trucks that must be engaged by the operator for the vehicle to operate. It might be the pedal in a lift truck or a handle on a pallet jack. "When the deadman is engaged, the vehicle is doing work," LaFergola says. "In an eight-hour shift, that can be anywhere from two to five hours."
Bratton says that his company uses the results of its fleet surveys to calculate each truck's cost per operational hour— including maintenance costs. "We need to get the information for a set period of time," Bratton says. BEB has developed analytical software to help derive the cost per hour for each piece of equipment in a customer's operations.
Hyster concentrates on usage patterns. "We look at the inventory summary, the department summary and we get to the granular level," says Russian. "Are trucks used in shipping or receiving? Are they used in freezer applications? Are they used in production? We look for redeployment or retirement opportunities. We look for short-term rentals being used for longterm use, which is not advantageous."
That may sound like a lot of work, but the payoff can be big. Bratton reports that in his experience, fleet utilization analyses almost invariably reveal savings opportunities. "In almost every case, we find there is too much equipment," he says. And often, the trucks in the fleet are bigger than they need to be. That happens as DC operations change over time, he explains. "DCs often buy a forklift that's just like the old forklift, but the job has changed."
What's it all mean?
With detailed information on the existing fleet in hand, the next step is to determine what the fleet should look like and how to get there. Part of that process is deciding what equipment needs to be replaced and establishing a schedule for that. Bratton advises fleet managers to determine a metric for cost per operating hour specific to their own operation to help guide future equipment replacement decisions. The goal, he says, is to develop a plan to ensure that the fleet is operating at the lowest possible cost with the highest possible equipment utilization.
As for what the optimal cost might be, Bratton says there is no "magic cost per hour." The nature of an operation, the condition of the facility, and other factors create great variability.
LaFergola agrees that the type of operation has a big effect on the cost per deadman hour. "Grocery operations will be higher than pharmaceuticals," he says. "Pharma operations are clean, they have an immaculate product, and the product is light. Grocery products are heavy, the warehouses are not as clean and the floors are not as smooth, and throughput is running full bore, so the cost per hour is going to be higher."
The end result of the analysis should be a comprehensive plan that includes details on retiring and replacing lift trucks in the fleet. In some cases, Russian adds, the plan might also call for redeploying trucks. "The best use may not be in that given facility," he explains.
Put it to work
Once a plan has been drawn up, the all-important implementation stage follows. "The customer can begin right sizing the fleet based on the operation and any finance options that may be available," says Russian. For example, one fleet manager may choose to outsource maintenance at a fixed monthly cost, while another may opt to have maintenance billed on an hourly usage basis, and a third may elect to handle maintenance in house. Each of those has cost implications that must be clear at the outset. And the decision must fit with the DC management's comfort level.
A thorough fleet evaluation, development of a plan for change, and implementing that plan can take several months. And the plan could have some upfront costs of its own for such things as fleet management software or electronics to keep detailed records on truck use.
Implementation steps may also be limited by financial factors, such as time remaining on the leased vehicles' contracts or depreciation remaining on owned vehicles. And it requires a commitment by management at all levels. "The key piece to that is the customer actively responding to recommendations," says Aitcheson. "That can be very difficult." Often, he says, managers have grown accustomed to having more backup equipment available than is strictly necessary. So implementing a successful program may require a shift in attitudes as well—likely driven by executive management insistence.
Still, the rewards can be substantial. Aitcheson estimates that customers on average save about 15 percent on overall fleet costs within the first year. And that should be just the beginning.
All of the fleet management specialists interviewed for this article stress that fleet managers have to build into their operations a way to perpetually evaluate and improve their fleets. "You can get the fleet right sized, then it can get fat over time," says McKean. "What are you going to do to retain, retire, and redeploy equipment on a consistent basis?"
The ongoing monitoring should include regular tracking of truck utilization, maintenance costs, and operational issues such as lift truck accidents and their causes. "It is important to have the tools to segment where the money is going—tire expenses, rack damages, and so on—to make intelligent decisions," Russian says.
Aitcheson adds that nowadays, fleet managers can obtain reports that break down spending by facility, by vehicle, even by specific components. Managers can also get reports that compare facilities or that break out top component issues or damage issues, he says. "That's where fleet management really takes off."
Ongoing improvements are the key to long-term gains, Aitcheson says. And long-term gains are what smart managers should be aiming for. "Everyone is tightening their belt this year," he says. "But you want benefits for the next three, five, seven years."
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.