Forklift Purchase Price vs. Total Ownership Costs

When you are purchasing a new forklift or aerial lift, you obtain competitive quotes, verify specifications and generate a purchase order. For that matter, just about anything we purchase goes through the same process. However, there is much more to purchasing forklifts and other material handling equipment. We have found, over the years, that often there are variables that can greatly affect the total cost of ownership of anything, be it an automobile, forklift or a giant cargo container.

The price you pay for your piece of equipment, by most accounts, reflects about 10% of the total ownership costs of that piece of equipment. This leaves 90% of your total costs up in the air. Depending on many variables, you could pay much more for the equipment than you needed to, or much less. These variables include:

Performance and Reliability of Equipment – Comparing cost per hour to operate can give you a good idea of what competing pieces of equipment will cost you over their useful life. When comparing cost per hour to operate, you should be sure you’re comparing similar models under similar circumstances. A lift truck operating 1500 hours a year for a light weight product manufacturer will cost far less over its lifetime than the same lift truck operating at a recycling facility. This cost should reflect general maintenance requirements as well as fuel costs.

Fuel Consumption – While this is often a part of performance and cost per hour, knowing the fuel costs for each comparing brand and calculating total costs over the life of the equipment can sometimes be quite an eye-opener. In addition, what are your fuel alternatives? Can you use electric models? Thinking outside the box may result in lower costs to power your forklift and other lift equipment.

Specifications vs. Operations – It is rare that two 5,000-lb-capacity forklifts from competing brands will have similar specifications. Knowing what your facility will accommodate and comparing that with each model will give you insight into how each model will perform, given your operating parameters. Factors include: aisle width vs. turn radius, draw bar pull, suspension and ergonomics compared to your floor condition, indoor/outdoor use and ceiling height/rack height vs. max lift height. You will also want to compare features between brands to ensure that each lift truck model is equipped with the proper components to meet your operational requirements. For example: Can it operate properly inside your ice cream freezer?

Ergonomics – A comfortable and smooth-running piece of equipment will provide you with increased productivity. These are costs hidden in equipment that are quite real in daily operating conditions. How much time and research and development, does each brand put into the comfort and ease of use of their equipment? Happy, comfortable operators are simply more productive.

Safety – Never underestimate the safety features of your equipment. What equipment is being specified and what equipment is optional from each manufacturer is very important to know. Reducing your accident costs or product/facility damage can make a big difference in your total fleet operational expenses.

Useful Life – Finally, how many hours can you expect from each piece of equipment until the cost to operate becomes cost-prohibitive? This can vary widely depending upon brand and model. But having some qualitative and quantitative information on hand, if possible, will help you make a better decision about the total cost of operating each unit/model.

There are many factors beyond price tag or lease rate that can help you make good decisions about the equipment you purchase. Having a partner that listens, evaluates and fulfills your needs is essential in building a fleet that is most productive and less costly in the long run. Contact us at 888-375-0829 to speak to one of our material handling professionals about the right forklift for your operation.


OSHA to Increase Fines

On November 3rd it was announced that OSHA would increase penalties for the first time since 1990. The new provision is entitled the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.”

This law compensates for the “freeze” on financial penalty increases that had been in place for the last 25 years. The Agreement allows OSHA to make a one-time “catch-up” increase to compensate for the more than two decades of no increases. The catch-up increase can’t exceed the inflation rate from 1990 through 2015 as measured by the Consumer Price Index (CPI), which will be about 82%.

Assuming OSHA applies the maximum catch-up increase allowed, the current maximum $70,000 fine for a Repeat and Willful violation would grow to as much as $125,000 each. The new act does include a potential exception to the increases. OSHA is allowed to forego following the  guidelines if “increasing the civil monetary penalty by the otherwise required amount will have a negative economic impact [on America]” or “the social costs of increasing the civil monetary penalty by the otherwise required amount outweigh the benefits.” This language gives OSHA considerable latitude to apply these fines as they see fit. After this one-time catch-up increase, OSHA will use inflation rate as a guide for future increases.

Employers may have several months to anticipate these higher penalties, but action on safety should begin immediately. Ensuring your forklift fleet is being properly maintained by service professionals and that all your forklift operators have current training on the equipment they operate, in the facility they operate them in, will keep you protected from these fines.

As we have discussed in previous articles forklift operator training and forklift maintenance have benefits that go beyond avoiding expensive penalties.  Workplace safety protects workers, improves morale and can actually help the bottom line profits for all workplaces. Rather than just treating safety as an expense, management should work to develop a business plan to achieve safety goals, avoid fines, and reduce insurance expense and lost time.

Visit our Forklift Operator Training page and learn more about our Planned Maintenance Program to ensure your fleet, and operators are safe and productive. Then contact us at 888-375-0829 for a quote to proving ongoing training and maintenance to ensure they both stay within safe operating parameters.


Section 179 is Back for 2016 and Better!

Sec179Congress has approved much needed improvements in Section 179 which allows companies, like yours, the ability to completely deduct the purchase cost of equipment the first year it is put into service. The new limits are:

Maximum 179 Deduction for 2016: $500,000

This means for qualifying equipment purchases of up to $500,000, your company can deduct 100% of the purchase price from its taxes the very first year it is put into service.

Further, this maximum will be increased annually, with the maximum tied to inflation, at $10,000 increments.

Bonus Depreciation; Maximum Qualifying Purchases: $2,000,000

Once you exceed the maximum deduction of $500,000, bonus depreciation kicks in at 50%, until you reach the maximum qualifying purchases of $2,000,000. For example, if you spend $1,000, ooo on new equipment, you can fully deduct the first $500,000, then deduct 50% of the remaining $500,000 for a total tax deduction the first year of $750,000.  It then begins to phase out dollar for dollar until you reach $2,500,000, where it is then completely eliminated.

Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

Note: The section 179 deduction applies to NEW and USED equipment whereas the bonus depreciation is only available for NEW equipment.

What that means to the purchase price of a NEW, $30,000 forklift? Assuming your company is in the 35% tax bracket, your effective cost, after deducting the entire $30,000 from your taxes, is only $19,500!

With Section 179 in effect for the remainder of 2015 and all of 2016, and beyond, there’s never been a better time to invest in new forklifts for your facility.

Note: We always suggest you consult your accountant or tax professional before you utilize section 179 for tax savings. Not all companies are structured the same and your savings may vary.

To learn more about Section 179, please visit; www.section179.org. Visit our New CLARK Forklifts showroom, our New Doosan Forklifts showroom , New Sellick Forklifts showroom and our Used Inventory to see our models. Then Contact Us for a quote, or give us a call at 888-375-0829.


Five Steps to Workplace Violence Prevention

Violence in the workplace often erupts without warning, and can have tragic results. Taking steps to prevent these situations can improve safety in your workplace, improve employee satisfaction and lead to increased productivity. Conversely, ignoring potential hazards can result in employee injury, even death — and legal action at considerable costs to the company.

OSHA has outlined five steps you can take to identify and prevent these violent encounters before they happen. While they are not directly related to materials handling operations, we feel these guidelines can apply to a wide variety of organizations, including your company.

Management Commitment and Employee Participation

As with any initiative, without the commitment of management and leadership, the rank-and-file of the organization will likely ignore any efforts to improve safety with regards to violence. Company leadership must be involved on a regular basis and visibly endorse the effort. This can be achieved by establishing a safety and health committee, and having leadership rotate in and out of meetings conducted by the committee.

Management must articulate a policy and establish goals for the company. Once a plan has been developed, leadership should allocate sufficient resources to accomplish the goals and uphold program performance expectations. Providing resources could entail meetings with health professionals to help identify potential hazards, creating visible signage and using other communication methods to keep workers involved in and aware of the program.

Worksite Analysis and Hazard Identification

There are probably facets of your operation that are prone to producing higher anxiety or tension among your employees. These could be actual physical conditions such as heat, cold, and hazardous areas as well as departments that demand high productivity, or even interaction with the public. Taking stock of these areas and identifying factors that are the least or most likely to create a stressful atmosphere are key to prevention.  Two steps you can take to identify and prevent violence include:

  • Conducting job hazard analysis – Management can conduct surveys of their departments to assess the potential risk of violence among employees. This not only includes internal assessments, but assessments of destinations to which your employees may travel, including specific neighborhoods, time of day, etc. Sites that expose your employees to violent behavior are often outside the walls of your facility.
  • Conduct employee surveys – Employees will often tell you if their jobs create stressful situations for them and if they feel endangered by some of their job tasks. Conduction of reviews on a regular basis will help you identify these areas and create a plan to reduce danger.

Hazard Prevention and Control

Once management has established and articulated its commitment, and evaluations have taken place, a plan to reduce potential hazards must be implemented.  This step includes:

  • Identification and evaluation of control options for workplace hazards
  • Selection of effective and feasible controls to eliminate or reduce hazards
  • Implementation of these controls
  • Follow up to confirm these controls are being used and maintained
  • Evaluate effectiveness and improve, expand or update these controls as needed

Safety and Health Training

As with any program you want to succeed, employees must be trained in order to follow the steps outlined by the company to identify and report these risks and follow up as needed.

This training could include meetings with mental health experts to help identify signs of stress in colleagues that could lead to violence. It also can include training on how to avoid violence outside your facility by taking common-sense actions (such as parking under a street lamp), what to do if an employee feels threatened and even self-defense training. Other training topics can include:

  • The company’s workplace policy on violence prevention
  • Documentation and reporting
  • Location, operation and coverage of safety devices such as alarms
  • Ways to identify and deal with hostile situations
  • A standard response plan for violent situations

Recordkeeping and Program Evaluation

Recordkeeping includes reporting procedures, what gets reported and to whom, and how these records are kept. Keeping track of both “close calls” and actual events helps you identify patterns, areas of particular concern and even certain job functions that might be creating undue stress on employees. It can help you identify areas outside your facility that present a danger to your employees, such as areas of town they serve.

OSHA Log of Work-Related Injuries and Illnesses (OSHA Form 300) can help you organize information not only for reporting to your proper internal sources but also for reporting to OSHA if necessary. As of January 2015, all employers must report:

  • All work-related fatalities within 8 hours
  • All work-related inpatient hospitalizations, all amputations and all losses of an eye within 24 hours

Injuries sustained as a result of assault must be entered on the log if they meet OSHA’s recording criteria (CFR Part 1904, revised 2014).

Keeping track helps you improve your program, improve employee safety and ensure your employees are operating in a safe and productive work environment.

We hope this summary is helpful to you in establishing your own workplace violence prevention plan. To learn more about what you can do, download the complete “Guidelines for Preventing Workplace Violence) by OSHA, HERE. While it was prepared for healthcare and social service workers, the overall content of this guide can assist any company, big or small, in achieving a safer work environment for all.


Five Things Your Forklift Might Tell You, if They Could Talk

Talking ForkliftEach day, your forklift bears the brunt of your material handling operation. It works hard for you day after day, rarelycomplaining about the workload or its surroundings. Occasionally it tells you something is wrong, by breaking down. But waiting for a breakdown is expensive. Repairs are more costly once a breakdown occurs and breakdowns can create dangerous situations at your facility. Have you ever wondered what a forklift might tell you, if it could talk? We did, and came up with the following:

  1. “I’m not getting inspected frequently enough.”  Although OSHA requires pre-shift inspections, few companies require them. Pre-shift inspections ensure that if I get sick, you catch it quickly, before it becomes a dangerous and costly situation. You can find forms to help my operators inspect me on Valley Industrial Trucks’s forklift safety page.
  2. “I think my operators need more training.” They jerk me from forward to reverse, to forward again, putting a strain on my transmission. They don’t slow down at intersections or use my safety features as frequently as they should. My horn is rarely used, I don’t have any strobe lights and I’m afraid I might end up in an accident. I don’t want to get hurt and I sure don’t want to hurt anyone else. I think we need some additional operator training.
  3. “My co-workers need more attention.” You put all of us on the same service cycles. The other guys work harder, lift more weight, more frequently and need to be seen by your forklift service pros more often. Give them a call.
  4. “My feet hurt.” These tires are old, they have chunks missing, they’re worn and at the end of the day, I can’t wait to stop and give them a break. Worn and damaged tires use more fuel, make my operator more fatigued and create a dangerous work environment. When’s the last time you inspected my tires carefully?
  5. “I’m shocked at how my electric friends are being treated.” I run on gas, but my electric friends are always complaining about their batteries, that the water levels aren’t inspected enough and they get hot all too often. They also complain about how they get charged at weird times and it doesn’t feel good. Maybe you should talk to their operators about how they use their electric forklifts. I’m told batteries are really expensive and making them last as long as possible is best for everyone.

Have you ever wondered what else your forklifts might tell you, if they could talk? Our team of service professionals can share their experience with you to determine the best plan to keep all your forklifts operating at peak efficiency and productivity. Happy and healthy forklifts are more productive and safer for those on them, and around them. Contact Us to speak to a service professional today. Next time you talk to your forklift, you’ll get nothing but “thank you’s” and compliments!


3 Tips to Forklift Fleet Maintenance Optimization

In recent forklift fleet maintenance and management articles, we have discussed the benefits of properly maintaining your equipment. There is no doubt that companies that engage in robust and comprehensive equipment maintenance save money in the long run and improve the efficiency of their forklift fleets.

Establishing a program that proactively maintains your equipment to maximize productivity takes just a bit of work. But with the right partner by your side, the process can be much easier to set up and manage. Following are three tips we suggest in order to establish programs that maximize productivity and reduce your overall costs.

Fleet Analysis

We observe, most of the time, that all equipment in your facility are not utilized the same way or under the same conditions. Some equipment might sit idle for a few hours each day and lift/transport far less overall weight. We suggest not only analyzing the hours each piece of equipment is used, but also how it is used. A piece of equipment used outdoors will required more attention than the same piece of equipment used indoors in a warehouse setting. Using both quantitative and qualitative information will help you develop a service plan that treats each piece of equipment uniquely and provides for the proper level of maintenance.

Quantitative Information – This would include the number of hours used each year, the average weight of each load hauled, service history, equipment age and any other quantitative information available through any type of fleet management software you may use.

Qualitative Information – This information is usually observation-oriented and includes the type of conditions under which each forklift operates, and the training or experience level of the operator. This observation would also include the types of loads each piece of equipment hauls. Hauling seafood off the dock versus processing retail-ready seafood, for example, will result in two very different wear-and-tear scenarios.

Daily Inspections

Although they are required by OSHA, we have found that most companies do not perform pre-shift inspections.  And we can’t tell you how many times we’ve gotten a call from a customer who has had to lock out a unit as a result of a pre-shift inspection because the unit is not fit for operation.

Pre-shift inspections will results in catching small maintenance issues before they blossom into giant repair headaches and dangerous scenarios.  Performing inspections also reduces your liability should an accident occur during a shift. Being able to provide a recent and thorough inspection prior to operating the equipment will help your cause dramatically, should litigation occur.

You can find pre-shift inspection forms on our website HERE.

Partner Selection

Having a service partner who has the experience, skills and trained repair staff to work with you is a major key to a successful program. Not all service providers are created equal; selecting one based on price could result in spending more without reaping the benefits. Instead, select a partner that has demonstrated to you that they understand your equipment, your operation and have the trained staff to execute your service plan. Doing so will give you the desired outcome for your operation. To help ascertain the ability of your potential service partner, inquire about the following:

  • Training that the service technicians receive (formal and informal)
  • Experience level of service staff (including technicians)
  • Level of experience in servicing your type of equipment
  • References from other clients that utilized similar equipment under similar operating conditions
  • Visit their facility to see how it operates. You can pick up pretty quickly whether the facility is organized and professionally represented.

Taking the time to establish a comprehensive service program takes a bit more work up-front, but in the long run it pays for itself many times over. To discuss your service program with our trained staff of service professionals, please contact us, or call us at 888-375-0829.


Three Essentials of Effective Training

Training is one of the most important functions of any manager. From top to the bottom levels of an organization, employees that are well-trained to do their jobs perform them better, are more efficient and make greater contributions to the bottom line of the organization. When we discuss forklift operator training with our clients there are three essentials they must commit to in order to take full advantage of the training we provide. This of course transcends forklift operator training and could apply to training in about any other function within your organization.

Planning – Setting out on any quest, whether it’s comprehensive training or how your department will function, doing so without a plan, even a simple one will leave you wandering in the wilderness, drifting from one program to another, no sure if what you’re doing contributes or detracts from your quest.

Put together a plan, including what you want to accomplish, the steps it will take to get there and what you will do to maintain the levels of training you provide as well as what you will do to take it to each “next level” once you have attained your planned levels of training.

Time – Nothing happens overnight, there is no magic elixir for time and practice committed to your plan. You can expand or contract the time it takes based upon your level and amount of training provided to do the job. Time can be your commitment personally or the time commitment of external or outsourced training. Either way, it takes time with the trainer, then time practicing the skills by the employee to hone them to an efficient and effective state. We have addressed how people learn in our Feature Article “Training vs. Teaching; Knowing the Differences.”

Resources – Time is one of your most valuable resources in any organization and we have addressed the need for that above. But you must also provide the resources for effective training. This can include time with a skilled trainer, a location to provide and practice the skills, equipment needed to learn and practice on as well as materials needed to support the training efforts.

Providing comprehensive ongoing training is an investment in your employees, your organization, and your bottom line performance. The results are usually commensurate with the levels of each of the three essentials we’ve listed and it is rare that results oppose the efforts. Invest in your bottom line with complete and professional training and watch the results, over time, compound for your company.