Finding the optimum size for your lift truck fleet

The last two years of economic upheaval have taken their toll on almost every industry. This means changing lift truck fleet sizes, either reducing them if business is declining or circumstances change, or ramping them in response to increased activity. The key is to adjust risk and financial exposure to reflect the reality.

Dealers have to be flexible with financing and fleet management and come up with creative solutions for their customers. This means dealers are learning more about their customers’ businesses and creating partnerships instead of just being suppliers.

Finance flexibility

The financial downturn has seen problems for companies at all points along the supply chain and materials handling operators are no different. Tjeerd Koppenol, Sales Manager Key Accounts for Crepa in the Benelux region, admits that at the moment everyone has too many trucks and dealers are having to compromise.

“A lot of customers are consolidating sites and this can lead to twenty to thirty per cent of their trucks lying idle,” he said. “But the customers may not want to lose the trucks so we have to be flexible. We look at freezing the maintenance payments, if the trucks are not being used, and sometimes freezing the finance payments. Then we extend the lease for the same number of months.”

In France, Pierre Culot, the Major Accounts Manager of Aprolis, says that his company’s approach has a slightly different emphasis: ”We do have short term rentals of less than a year but it is more often more two years. It’s more a case of having to be flexible,” he said. Meeting customer needs is paramount, whatever the solution, and flexible response is key.

Of course short-term hire comes at a price. So although the customer is exposing themselves to lower risk – avoiding longterm commitment to an unwanted truck and associated costs – an individual truck on a short-term agreement may actually cost more per month. However, the fleet may be smaller and it is possible to hand the vehicle back, without penalty, so the overall package is more responsive in uncertain times.

Complete financial control

In the United Kingdom Paul Fox, National Sales Manager for Impact Handling, pointed out that as they underwrite their own fi nance they have complete flexibility. “Customer’s requirements are changing constantly so we need to be able to be flexible within the contract,” he said. “We can do a short term rental if customers are worried about the fi nancial risk but we have to charge more for that. We’d prefer to negotiate longer term contracts but with flexibility built in to protect the customer.”

“Meeting customer needs is paramount, whatever the solution, and flexible response is key.”

“For example, let’s say a customer took five electric and three gas trucks from us on a five-year contract. Then after eighteen months they change premises and have less inside space, so the electric trucks are standing idle. We’ll change them for gas trucks so the customer can get on with their business. It’s all about giving the customer what they need.”

Dealers get proactive

Financial flexibility, while valuable, is a reaction to the economic downturn and all the dealers we spoke to want to do more than that.

“Many times a customer will ask for, say, ten trucks. But if our analysis said that they only need eight, we’ll tell them. That way we have a chance that they will be a customer for a lot longer than the length of one contract.”

Pierre Culot said that when a customer wants to change the size of their fleet they always undertake an audit to help the customer make the right decisions. Paul Fox agreed that it is essential to qualify that the customer’s idea of fleet size is actually correct.

“Many times a customer will ask for, say, ten trucks. But if our analysis said that they only need eight, we’ll tell them. That way we have a chance that they will be a customer for a lot longer than the length of one contract.” In the Netherlands, they have gone one step further.

“We have invested in simulation software,” said Tjeerd Koppenol. Simulation software is used in conjunction with site surveys and with input from racking and storage solutions experts. Floor plans, incorporating flow calculations, are drawn up and the simulation program shows the customer a visual presentation of how efficiency can be improved. Suggestions may include reconfi guration of the warehouse from wide aisle to narrow aisle, for example. “With this, we can fine tune the blend of truck types to get the maximum productivity out of the fleet, whatever its size.”

Fleets and handlers

Dealers need to be able to assess the impact of any change in fleet size and advise accordingly, whether its about the right attachments, or even operator training requirements.

“To take a simple example, we might find that a customer is using an indoor lift truck to take pallets to a loading bay, then a gas truck takes it from there to a lorry,” said Fox. Obviously a more versatile truck that can do both parts of that journey will save goods handling time.

But there may be other implications of changes of that nature. New trucks have to fit in with the rest of the fleet or there will be an extra cost in the form of operator training. Or there might be a different maintenance schedule to the rest of the fleet, requiring more maintenance visits and consequent increase in expenditure.

Conclusions

Changing fleet size isn’t simply a case of getting in more trucks or selling them on. Planning is important and needs to cover finance and human resources issues as well as the practical side such as how many trucks, how big, their capacity and all the other attributes. A good dealer will want to understand their customers’ business and the demands being placed upon it before changing the size of a fleet, whether it is up or down.