Saturday 10th Dec 2016 - Logistics Manager

Good as new

Forklift truck buyers face a wide range of options – from premium trucks with all the bells and whistles, to budget equipment that is basic but serviceable. But the used truck market is worth considering with the promise of premium-spec equipment at highly competitive prices.

This article was first published in Logistics Manager, June 2016.

This article was first published in Logistics Manager, June 2016.

Most of the major forklift manufacturers have schemes for supplying used and refurbished trucks – and it makes sense for them to maximise the opportunities available in this market.

The reason for this is that a very high proportion of new forklift trucks – some estimates suggest up to 75 per cent – are on some form of operating lease. This means the manufacturer is not only providing the truck but is also providing servicing and maintenance for a monthly fee.

At the end of the lease term, say five years, the truck is going to go back to the manufacturer, which will then have to sell it on.

And this final part of the process is critical to the profitability of the truck over its whole life.

The manufacturer’s income from a leased truck is made up of the sum of the monthly lease payments, plus the price that can be achieved for the truck at the end of the lease.

And to make the monthly leasing fee as competitive as possible, the manufacturer has to be able to get the best price possible for the truck at the end of the lease.

But it is equally important to make a realistic assessment of the residual value – there are some horror stories about companies that were over-optimistic, only to find that the real value of the returning asset was lower than the book value. That can make the difference between profit and loss on a contract.

Just how important the used truck market is to the major manufacturers is highlighted by figures from Kion Group’s annual report. Kion’s brands include Linde, Still and Baoli.

The Service business (which includes used trucks, rental trucks, spare parts, systems and software solutions and financial services) accounts for some 45 per cent of the group’s sales which were just over €5 billion in 2015.

In fact, sales of used trucks alone totalled some €270 million. And globally, about 50 per cent of Kion’s new truck sales are financed by the Kion group or by external banks and dealers.

For the buyer of course, there are some real advantages. First there is the opportunity to buy a premium truck for the price of a budget unit. And, the fact that the vehicle has been maintained by the manufacturer means that it should be in the best condition possible.

A Yale ‘Approved Used’ forklift truck can deliver a higher rate of reliability and better value for money than some of the lower priced new trucks on the market, says David McIntyre, business services manager at Yale Europe Materials Handling.

He argues that operations managers should be looking at the approved used market as a first choice investment when considering their options, rather than as second best.

McIntyre said: “The typical used forklift user has changed in recent years.

“Historically the biggest users of used machines were small to medium sized companies keen to increase or upgrade their fleets within a set budget. They were customers looking for a quality and reliable used product for low to medium usage applications.

“But financial considerations are not always the most important driver, and many large organisations now choose to invest in Approved Used equipment if their application warrants it.

“Customers are now very open minded about buying used equipment, with a growing number of companies happy to order a mixed fleet of new and used products.”

Key to buying approved used, added McIntyre, is the reassurance afforded by a reputable name like Yale.

“Yale Approved Used units provide the reassurance of the full backing of a major forklift manufacturer with a proven track record in after-sales care and customer service that

the forklift market simply cannot match.

“A good quality used forklift truck that has been fully refurbished to the relevant Yale Approved Used standards can therefore represent far better value than certain new models on the market.

“Typically the running and operating costs of a Yale Approved Used unit will be similar to a new model which means that our Approved Used units will give many additional years of productive and cost-effective service.”

Toyota highlights the fact that its used trucks have previously been part of its contract hire fleet, “which means we’ve looked after them from new, using Toyota genuine parts. Once they have come to the end of their hire term, they are refurbished in Toyota’s UK centre.”

Toyota makes it clear that not every truck will make it – to be considered at all, a truck must meet the company’s quality and safety standards. Vehicles that meet these criteria are graded and prepared to one of three finish levels.

Platinum level forklifts are as close to ‘new’ as Toyota can get them, making them suitable for an intensive operation. Toyota says all components are inspected thoroughly and any defective parts are replaced with new, Toyota parts. They are then given a full re-spray and original decals are applied.

Value for money

Gold level truck offer a balance between reliability and value for money, and are intended for normal day to day materials handling operation. All of their functions are tested and any defective parts are replaced with new, Toyota parts. Again, they are repainted and new safety decals applied.

Silver level forklifts are designed to offer value for money without compromising on reliability. They are suitable for less intense operations or as a backup to the main fleet. Toyota checks all of their functions to make sure they’re operating to manufacturer tolerances, their paint is touched up and new safety decals are applied.

Briggs Equipment has a dedicated used forklift centre in Staffordshire with up to 600 used trucks in stock at any one time including counterbalance (diesel, LPG or electric), powered pallet and reach trucks. Over 90 per cent of the trucks come from its long term rental fleet. Jungheinrich has just opened a new used forklift site in Dartford offering zero per cent finance. Crown offers a complete line of pre-owned electric lift trucks and forklifts including three and four wheel counterbalanced, low, mid and high level order pickers, narrow-aisle reach trucks, pedestrian rider pallet trucks, and pedestrian stackers. It also offers pre-owned internal combustion forklift trucks.

Linde’s approved used fork lift trucks are, typically, ex-contract hire and have been maintained from new to the manufacturer’s standards. Like Toyota, Linde offers three grades of used truck.

Linde Select 24 is a nearly-new machine – no more than 24 months old – with low usage hour meter readings. Typically they are ex-demonstration units. The trucks are finished to Linde Approved Standard; fully Serviced to manufacturers recommendations. There is a full serviceability and functionality check to conform to LOLER and PUWER, and a certificate provided. Linde also offers a nine months or 750 hours parts and labour warranty.

Linde Ultra trucks are serviced to manufacturer’s recommendations; engine pressure and emissions checked and certified; charger function and pat tested and certificated; electric motors proof-tested; repainted to manufacturer’s original colours; operator’s handbook provided; full serviceability and functionality check to conform to LOLER AND PUWER (certificate provided); serviceable tyres no more than 40 per cent worn; operator’s seat renovated including seat belt; transmission pressure-tested to manufacturer’s recommendations; mast, carriage and hydraulics tested to manufacturer’s specification; steer axle checked and set to manufacturer’s specification; hour metre function-tested; original truck history available; and six months or 500 hours parts and labour warranty.

Linde Super trucks are serviced to manufacturer’s recommendations; engine pressure and emissions checked and certified; charger function and pat tested and certificated; electric motors proof-tested; tyres serviceable; operator’s seat and seat belt serviceable; transmission drive-tested; repainted to manufacturer’s original colours; operator’s handbook provided; full serviceability and functionality check to conform to LOLER AND PUWER (certificate provided); and three months or 125 hours parts and labour warranty.

Thorough Examination – ensuring safety in operation

Health and safety is a critical issue and anyone buying a used forklift needs to ensure that it meets the relevant safety requirements.

Most important is a Certificate of Thorough Examination. All forklifts need to go through a Thorough Examination, which is similar to an MOT for cars.

Only brand new trucks do not need a Certificate of Thorough Examination, but they will need to be tested within a year of purchase.

The examination is required under two pieces of Health and Safety legislation:

LOLER 98 (Lifting Operations and Lifting Equipment Regulations 1998) – which covers lifting components.

PUWER 98 (Provision and Use of Work Equipment Regulations 1998) – which deals with all other safety-related items, such as brakes, steering and tyres.

Consolidated Fork Truck Services (CFTS) is the body set up by BITA and the FLTA to provide national accreditation scheme for Thorough Examination.

Top tips for buying used heavy lifting equipment

Choosing heavy lifting equipment can be a complex business. Application and machine utilisation are key factors, but for smaller businesses price tends to be the differentiator and the challenge is how to source a quality used machine that won’t let them down.

Tony Rooney, director of Cooper Specialised Handling, says: “Unfortunately, many of the heavy and specialised used machines on the market are off the continent, life-expired or have dubious histories.”

Cooper has come up with ten tips to help companies buy or rent used heavy lifting equipment.

  1. Be wary of very low priced machines. You get what you pay for, so if the deal looks too good to be true, it probably is.
  1. When it comes to reliability and high productivity – and achieving the best resale value – quality tells. Choose modern, quiet, low emissions, low hours machines that are LOLER-certified and have been well-maintained. In particular, pay attention to the engine, transmission and steer axle, as a failure will be costly to repair/replace.
  1. Overall appearance is a good indication of how equipment has been treated. High tyre wear and/or extensive dents and scrapes suggest a machine may have been damaged through abuse or misuse.
  1. Always check the equipment’s authenticity. A quality machine from a reputable supplier should come with a complete, substantiated history, which includes machine hours, specification and condition.
  1. Review all finance options. Don’t assume that outright purchase is the only route to acquiring the forklift you want. Ask your supplier about hire purchase and transferring the asset into rental at a future date.
  1. A reliable machine is one that is maintained properly. Check whether your supplier employs qualified engineers that can meet your servicing requirements and provide a fast response in the event of a breakdown.
  1. For added peace of mind, make sure your chosen lifting equipment comes with a comprehensive warranty.
  1. Not all warranties are the same. Check exactly what the warranty covers and ask about extending it and/or tying it in with a maintenance programme to suit your specific handling needs.
  1. Choose a flexible service plan. Whether you need total fleet management to reduce your overall operating expenses, or scheduled maintenance support to minimise equipment downtime, ask your supplier about a package that suits your requirements.
  2. Seek advice from the experts. The best deals are available from reputable suppliers that really know this marketplace and will take the time to understand your heavy lifting requirements before recommending a cost-effective solution.

Linde app for used trucks

Linde Material Handling has developed an app that gives access to its database of available approved used forklifts for sale.

The app, which is available for both Apple and Android devices, enables customers to search by product, capacity, mast lift height and budget.

Used equipment manager Matt Dearman says: “We developed this app to give our customers a quick and easy way to find their perfect truck wherever they are. The app allows you to quickly and easily view our latest stock of Linde Approved Used fork lift trucks. Your search can be filtered on your requirements such as truck type, mast lift and closed height, and most importantly of all – budget. If you are not sure what you are looking for, or if you would prefer to rent rather than buy, the app also contains an interactive map which will provide contact details for your nearest Linde National network company who will be happy to assist.”