The Mheda Journal

Last week I was talking to an industrial battery charger manufacturer who wishes to remain nameless, and we started talking about ways to replace revenue that was lost in the recession. This person told me about a scenario that exists in the battery and charger market that I was unaware of, and he had some pretty strong feelings about what it means for his business and the industry.

 “A couple of years ago, we were approached by a lift truck manufacturer to private-label a charger for them that they could put their name on and sell it through their parts catalog. We talked to our distributors, who said ‘We’d rather fight them out on the street than just have you sell direct.’ Therefore, we declined, but the manufacturer found a French partner, who produced an SCR charger for them with their name on it that they sell as a package with their lift trucks. This was the first time that we had seen one of the major lift truck manufacturers get into the battery charger business.

“At the time, this manufacturer said they were doing it because they need to replace revenue that was lost when new truck sales dropped during the economic downturn. That’s probably true, but I don’t see them stopping now that they’ve developed it and have been moderately successful.”

For distributors, this situation has created a bit of a dilemma. The biggest thing is, it creates a competitive environment, not just between the charger manufacturers like us and the lift truck manufacturers, but also amongst distributors. For a long time, independent battery and charger dealers had the local lift truck dealer as one of their largest customers. Now, if more lift truck dealers are forced to sell what I’m going to call “proprietary” batteries and chargers, that creates some major competitive issues.

At first, it was optional—the distributor could still sell whatever charger they wanted. Then it became mandatory to sell the proprietary charger. Some distributors found ways around it, but in many cases, the charger distributors felt like they were competing with the lift truck dealer. Conversely, the truck dealers were reluctant because they knew they had customers who didn’t want this new charger. They also have long-term relationships with the charger company’s salespeople and distributors. They work very closely, and a lot of them didn’t really want to see that relationship damaged.

If nothing else, it’s caused some changes and uncertainty in the distribution channel. Rumor is that at least one lift truck company has already made a similar request to the battery manufacturers, meaning “proprietary batteries” could be next.

If this does prove to be a viable revenue source for the lift truck manufacturers, it’s only going to become more common. What will this mean for distributors?

I’ve heard for a long time about the impact that proprietary forklift software has on the industry, but this was the first I’d heard of proprietary forklift chargers. I’d like to hear from you. How prevalent is this? What does the future hold?

photo courtesy of Plug Power Inc.

I had the pleasure to interview Warren Brower, product marketing manager at Plug Power Inc., a Latham, NY-based manufacturer of hydrogen fuel cells, last week. Mr. Brower was fomerly the marketing manager at Raymond Corporation and joined Plug Power in 2007.

I knew a little bit about hydrogen fuel cells before speaking to Mr. Brower, but now I feel like almost as much of an expert as he is. (I’m not, though…not even close.)

One of the things I found interestng was the go-to-market strategy for his company:

Our intention is not to go out and replace every lead-acid battery out there. We understand that a hydrogen fuel cell is not for every application. The key with fuel cells is to focus on specific applications and specific opportunities in high-volume and high-throughput applications.

Such a strategy is important for distributors to know. Do you have customers out there who are eyeing this technology? Do they fit the “high-throughput” description. If not, they may not be a good candidate for hydrogen fuel cell forklifts.

Another interesting excerpt from our interview:

You’re going to see other applications start to surface where fuel cells make sense instead of using diesel generators, backup lead-acid batteries or whatever. So I think in the next couple to three years, you’re going to see a major push within this field.

So, apparently we’re just scratching the surface with this technology. Although it’s been “a few years out” for more than a few years now, it’s something to continue to keep an eye on.

Anybody out there doing anything interesting with fuel cells? I’d love to hear about it!

While we’re at ProMat, first-time attendee Dan Vest, editor of MHEDA Edge, will be posting his thoughts too. Here’s what Dan had to say after Day 1:

Attending a show like ProMat for the first time has been quite the experience. The sheer size of the show was the first thing that struck me. It was amazing, especially in times like these, how many exhibitors and attendees were there. The show itself was fascinating. I saw everything from the latest AGV technology to the world’s first hybrid-electric forklift. For me, perhaps the most helpful thing at the show has been the 45-minute education sessions. I attended most of the same ones Chris mentioned in his entry, and also one on fast-charge and opportunity-charge batteries. As someone who is still relatively new to the industry I learned quite a bit from these sessions.

The other thing ProMat has done for me is offer me the chance to meet MHEDA members face-to-face for the first time. I’d like to say I was surprised by how friendly and accessible everyone has been, but from my phone contact with members, I knew that was how it would be. I was, however, pleasantly surprised by how many young people were at MHEDA’s reception Monday night. It was great to get to talk to the guys who are the future of our association.

Day 1 at ProMat was quite the experience. I can’t wait to see what day 2 has in store.