If it’s good enough for Sainsbury’s…

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Sainsbury’s caused a stir when it announced that it was prolonging the life of its materials handling fleet with a programme of refurbishment. So, if it is good enough for Sainsbury’s, is it good enough for you?

Forklift sales are on the up, having risen by 10.6 per cent for the year to June 2012, according to the British Industrial Truck Association. But the shadow of the recession is still influencing fleet maintenance strategies, and ideas about how to optimise performance from materials handling equipment.

The manufacturing and building supply sectors, and forklift suppliers in particular have been investing to replenish aging hire fleets, which pushed sales of counterbalance trucks to 13.6 per cent to 13,450 units.

The market for warehouse trucks increased by 7.7 per cent to 13,350 units in the year up to June, but counterbalance trucks outsold warehouse trucks for the first time post-recession, albeit by just 100 units.

This development was expected as sales of warehouse trucks recovered much quicker in the immediate aftermath of the economic crash, largely due to the resilience of the UK’s retail sector which is a major user of powered pallet trucks and low level order pickers.

“The main impression is that the UK market continues to show the steady growth which has been a consistent feature since the recessionary low point of December 2009,” says James Clark, secretary general of BITA.

“One feature that seems to be clear when looking at the UK market as a whole is that there are two distinct tiers visible. The top-tier, market-leading firms, whose customers tend to be distribution centres and supermarkets are doing the best in the current climate. The market followers who typically supply smaller industries are experiencing more of a challenge, primarily because their own customers are still struggling.”

And there is a knock on effect in the rental and second hand market. Barloworld Handling recently invested £3m in 150 new Hyster forklifts for its short term hire fleet in anticipation for a trend for rentals. And the Sainbury’s refurbishment deal shows that even the big grocers are now making the most of used kit.

Neil Warren, Jungheinrich’s used equipment and short term rental director, points to the significance of the deal: “Historically, the biggest buyers of used materials handling equipment have been small to medium sized companies keen to increase or upgrade their truck fleets but with budgets that cannot quite stretch to new machinery, but more and more larger organisations are choosing to include used trucks in their overall fleets.”

This pressure to squeeze value out of materials handling equipment is reflected in a strengthened focus on service and maintenance as a key to keeping older equipment going for longer. Essentially sweating assets as much as possible.

Toyota also reports increasing demands for and of used equipment and service contracts. Phill Bird, after sales director, Toyota Material Handling UK says this his has caused a “higher demand for flexible solutions for service and maintenance as many companies start to see the positive effect…

“After several years of decreasing spending but increasing quality of service, companies have come to expect high levels of service support and cost effective solutions to meet their operational needs, continually expecting more for less.”

Businesses are still looking the potential of reorganising their service contracts. Builders merchant Grafton Merchanting has taken on Barloworld to manage the maintenance of its fleet of some 500 pieces of materials handling equipment from manufacturers including Yale, Caterpillar, Jungheinrich and Linde. The fleet was previously maintained by more than 40 different suppliers.

Smaller operations are staying savvy about the value of maintaining vehicles in the best condition. For example timber and builders merchants, Ridgeons who purchased 12 engine counterbalance trucks, two electric counterbalance trucks and two side loaders from Linde, all with a 10 year full maintenance contract.

The quality and availability of service assistance is one area where manufacturers are keen to differentiate themselves.

Linde for example, offers a 24 hour call out facility, from its 23 local customer support centres across the UK, and nine national network companies which have full workshop facilities.

Toyota has long prioritised the speed and effectiveness of its call out responses, with figures such as 98 per cent first time fix rate and 3.48 hours average response time. Jungheinrich too promises to attend equipment breakdowns within four hours.

And Crown has taken on an overnight delivery service to make sure its parts arrive with engineers by 8am. ByBox collects parts from Crown’s European parts centre in Munich, flies them from Frankfurt to Birmingham, and sorts them in Coventry, before delivering them overnight to lock boxes on Crown’s own customer sites.

“ByBox has been able to provide Crown with a daily pre 8am next-day delivery from our European parts centre to all Crown engineers and customers with ByBox locations in the UK,” said Mike Knowles, UK operations director of Crown.

Defining terms

Service and maintenance can seem like an unwelcome extra layer of planning and jargon when organising fleet deals. But a recent focus within the industry has been on setting the record straight, and defining terms.

The Fork Lift Truck Association has produced a booklet defining “fair wear and tear” for when a truck is returned at the end of a rental period.

“We are all aware of what is expected when we hire or lease cars. We’re aware – right down to returning it with a full tank of fuel – of any costs which will need to be paid,” says FLTA outgoing chief executive, David Ellison.

“There is a great deal of confusion, however, over what is expected at the end of a fork lift truck contract. There is a temptation to think that a fork lift truck is just a lump of steel which is immune to bumps and bangs.

“Certainly, it is designed as a workhorse and will take a bit more punishment than a family saloon. But if it does get damaged, it can cost a lot more than you would imagine.”

The booklet illustrates the types of damage which are unacceptable, such as damaged tyres, torn canopies and buckled backrests and is designed to help customers and dealers reach amicable agreements, but the guide also advises on next steps in case of end-of-contract disputes.

As part of its “Taking Care with Toyota” year of safety, Toyota is launching a campaign to raise awareness about such legislation and provide guidance to help make sure their equipment stays safe and legal.

For example it is addressing confusion surrounding the legal requirement for a “Thorough Examination” by providing facts and answers for customers as well as an internal education campaign for its employees.

Toyota’s Phill Bird says: “Like an MOT for a car, a Thorough Examination is a legal requirement for lifting equipment, unfortunately confusion arises when customers believe a Thorough Examination is part of a standard service and are not clear on the benefits of a Thorough Examination carried out by a CFTS accredited company”.

Thorough Examination is a clear, definitive procedure which ensures a consistent, high national standards for safe, genuine and regular examinations of forklift trucks in line with PUWER and LOLER regulations.

The national accreditation scheme for Thorough Examination is the Consolidated Fork Truck Services, handled by an accredited body made up of BITA and the Forklift Truck Association.

“A team of Toyota examiners accredited by CFTS will be on hand across the country to give local support to all customers and companies that would like to discuss Thorough Examination further for advice or to book an examination,” says Bird.

As the ways of staying in the loop regarding service requirements develop, pleading ignorance will be scant defence when things go wrong. And not paying attention, or looking for short cuts is, as ever, a risky business that’s likely to burn operators.

In particular, looking to save a few quid by buying forklift trucks online can be dangerous, because as with all internet shopping, it is so difficult to verify the provenance and quality of items for sale.

Recently one FLTA member dealer who had advised that a counterbalance truck was beyond economical repair, was subsequently contacted by the vehicle’s new owner who had purchased it without warranty online.

“The customer was distressed as his ‘new’ truck had stopped working,” said Andy Pilkington, managing director of Allways Forktruck Services.

Quality assurance

“You can imagine his reaction when he discovered that the truck that he purchased in ‘as new condition’ had been written off just weeks earlier.”

Martyn Fletcher, chairman of the Fork Lift Truck Association, said: “Stories like these are by no means commonplace, but we are aware of a small number of rogue traders operating online who consistently sell trucks of poor quality. Unfortunately, customers have little or no recourse when things go wrong.”

Jonathan Morris of Jungheinrich points to the security of dealing directly with the manufacturer: “Dealing with a forklift truck manufacturer that retains ownership of its downward supply chain by taking the direct route to market ensures that a uniform standard of service is achieved across the fleet…

“After all, can the client be sure that the level of service and after-sales support provided by the forklift manufacturer’s long established Germany-based distributor will be matched by that offered by the newly appointed dealer in Bosnia and Herzegovina?”

Every materials handling strategy will necessitate balancing costs against getting the optimum cover and security for its trucks, and ultimately the most value for the lowest spend.

Even with new purchases back on the agenda for some, the range of ways operators can access equipment, and the information available about its upkeep means that there is no one-size fits all approach.

The integrity of service and maintenance offerings that has allowed operators to push equipment to the limit through the recession, is now allowing them to be more inventive and open minded about used or older equipment.

Case study- Keep on lifting

Sainsbury’s is extending the life of its materials handling fleet with an extensive refurbishment programme from Jungheinrich.

A mix of 140 low-level order pickers, reach and counterbalance models that were originally supplied as new products by Jungheinrich in 2005, have been refurbished, and redelivered on a rental basis to Sainsbury’s St Albans distribution centre.

After six years of service, the fleet had been due to be replaced. Jungheinrich suggested buying back Sainsbury’s entire fleet and refurbishing each truck – together with the batteries used to power them – and then contract hiring the forklifts to Sainsbury’s on a three year deal with parts and maintenance included.

Sainsbury’s mobile plant equipment fleet manager Derek Boghurst said: “My colleague Gary King and I both looked very closely at Jungheinrich’s proposition and the kind of environmental and financial savings which the deal could bring to our business.

“We concluded that it was an excellent opportunity that worked well for us on a number of levels,” he said.

The refurbishment process began in Autumn 2011 and was completed in phases over six months. Jungheinrich supplied “bridging” trucks to ensure that Sainsbury’s business was not interrupted during the phased refurbishment process.

Trucks and batteries were sent to Jungheinrich’s dedicated forklift refurbishment plant in Dresden. Machines were dismantled and all worn or defective parts replaced – including tyres and lift chains. The trucks were then cleaned and repainted before being safety tested.

Neil Warren, Jungheinrich’s used equipment and short term rental director, said: “We have always contended that a good quality used truck that has been fully refurbished to the relevant European standards represents far better value than certain new models on the market. As I believe this deal demonstrates, Sainsbury’s agrees with our view.”

Case study- Briggs takes on Hyster sales and service

Briggs Equipment, the Yale forklift dealership, is also taking on Hyster after reaching agreement to buy the assets of Barloworld Handling UK.

It expects to complete the deal by 30th September from when it will have responsibility for sales and service of both the Hyster and Yale brands, which are both part of the US-based NACCO Materials Handling Group.

Briggs chief executive Richard Close said: “This move reflects the aspiration of Briggs which is to invest, grow and expand; building on our platform of success since the Yale UK acquisition two years ago.”

Briggs Equipment UK is a subsidiary of Briggs International which has dealerships of Yale and Hyster products across the southern United States and in Mexico.

Ralf Mock, managing director of NACCO Materials Handling Group EMEA said: “On completion, this acquisition will position Hyster and Yale with the largest, multi-skilled engineering workforce in the UK, delivering an enhanced service solution for their customers.
“Barloworld is a long standing and valued partner of NMHG and will continue to work in partnership with Hyster on their dealerships in the Netherlands, Belgium and South Africa.”

On the move

– Peter Harvey MBE has taken over as chief executive of the Fork Lift Truck Association from David Ellison who has retired after more than a decade’s service. Before joining the FLTA, Harvey spent 37 years with the British Army. “He has, in David, a very tough act to follow, but I am certain Peter will play a pivotal role in the development of the FLTA and the entire fork lift truck industry,” said FLTA chairman Martyn Fletcher.

– The British Industrial Truck Association has appointed Hans-Herbert Schultz, managing director of Jungheinrich UK, to its management board. BITA secretary-general James Clark said: “We are extremely pleased to welcome Hans-Herbert to our management board. He further strengthens our active and busy board of industry professionals representing the industrial truck sector nationwide.”

– Jonathan Morris has been appointed sales director – corporate accounts at Jungheinrich UK. He has held senior national and international sales roles with a number of key suppliers to the sector.

– Linde Material Handling has appointed Francis Bleasdale head of marketing. He joins Linde from Nissan GB, where he worked for nine years, including as commercial vehicle director.

– Toyota Material Handling UK has appointed Kevin Davies as operations director, and Tony Wallis as sales and marketing director. Davies has worked for Toyota for over 25 years and will look after business centres, supply and transport, fleet refurbishment and the Toyota Training Academy. Wallis has been with Toyota for ten years, and had previously served as operations director.

– The Automated Material Handling Systems Association has appointed Dave Berridge as secretary to take over from Graham Watts. Berridge has over 25 years’ experience in the material handling industry, including being a member of the AMHSA Council for the past three years and is chairman of MHE/14, one of British Standards Institution’s committees responsible for safety in handling and storage automation. AMHSA president Peter Lerigo said: “Graham became secretary almost 20 years ago when AMHSA was in decline; with help from a series of presidents, he built the association’s membership up to about 50 companies and made it a very effective networking group.”


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