The Mheda Journal

In December of 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Part of this regulation extended a tax credit for propane usage available to, among others, operators of propane-powered lift trucks. Users of propane are eligible to receive a credit of 50 cents per gallon used through December 31, 2011. Usage is also retroactive to fuel used in 2010. However, claims can only be filed once and must be applied for by August 1, 2011.

Believe it or not, that’s only about 7 weeks away! Distributors can encourage their customers to take advantage of this credit. Thought I would pass the info along before it gets too late!

One of the great things about this year’s Convention theme, “The Customer Convention,” is that, for the first time, it’s given me the chance to talk to end-users of material handling equipment. Starting with the Second Quarter issue, we’ve started a feature called Customer Confidential that outlines what end-users are really looking for from their material handling equipment providers. It’s been enlightening to hear some of the responses. That feature will continue for the rest of the year.

In addition, we’re also interviewing end-users for other articles. In the upcoming (July) issue, we spoke with 15 purchasers/users of material handling equipment to talk to them about what goes into their buying decision. What fuel source do they prefer? What works best for their application? Do they prefer a one-stop-shop provider of lots of products or a specialty provider? Do they prefer working with distributors or direct from manufacturers? I think the answers may surprise you. They did me. Suffice it for now to say that the power source of an end-user’s forklift that they actually have may not be the one they want. Check out the Third Quarter issue of The MHEDA Journal next month to see more!

That being said, it raises the question of how do you know what customers really want. You could always ask them, but even that’s not foolproof. If you’re not asking the right person or asking the right question, their needs may not be clearly identified. Customer service advocates say truly outstanding service companies know what customers want before the customer does. It’s a tricky balance that material handling distributors must strike every day. So, I ask you: How do you know what your customers really want?

Earlier this week, I was talking to MHEDA Board member Mark Milovich of Lift Atlanta about what customers want from their forklifts. Mark, as always, gave great insight into the different advantages and disadvantages of propane, electric, diesel and fuel cells. It’s part of an article we’re preparing for the next issue of The MHEDA Journal, so I don’t want to go into too much detail right now. I do, however, want to talk about one comment I found particularly interesting.

When I asked if he does business with hydrogen fuel cells, he said, “The fuel cell is a great idea, but it’s at least another 6 to 10 years before we start seeing that as a real viable option.” He was referring to his company in particular, so that’s not meant to be a blanket statement for the industry at large, but, still, this blew me away. I’ve been working in the industry for eight years now, and when I started, fuel cells were 6-10 years away. They’re still there.

My question is, why? From all I’ve read, the technology has advanced dramatically in that time. There are some customers who have jumped in with both feet, installing hydrogen fueling stations and revamping their operations around the hydrogen infrastructure. But those stories remain few and far between. Questions about the volatility and accessibility of hydrogen are holding people back. But with the price of gas and electricity both likely to rise in the coming months, will that hasten the adoption of fuel cells? What do you think?

As I mentioned in my last post, we at The MHEDA Journal have been talking to members over the past few weeks to try to develop some articles for next year. As part of this process, I spoke last week to Terry Wickman at Keytroller. He brought up an interesting topic for distributors to consider: How do you break into a new account? “One of the ways to break into a new account is to solve a problem that they have. Even if a customer is using a competitive brand of forklifts, solving a problem that they have related to those forklifts is a good way to get your foot in the door without talking about new trucks. You’re solving their problem even though he or she may not have your equipment,” he said.

Safety products are one way, aftermarket parts are another and attachments would be a third. That’s just what I can think of off the top of my head, and I’m certain there are others. (Anyone care to share any more examples? Leave a comment to let me know!)

So as you’re making plans for recovery in 2011, take into consideration these and other ways to break into new accounts. That market share growth that seemingly everyone is planning on has to come from somewhere. Speaking of which, congratulations to everyone who weathered the storm of past couple of years and is still around to take on 2011. Happy holidays to everyone, and best of luck next year!

As material handling distributors look toward a new beginning in 2011, one of the areas many of them plan to focus on to generate more revenue will be fleet management. As most of you are aware, fleet management is the complete oversight of a customer’s fleet, including service calls, invoicing, leasing agreements and anything else you can think of. “The more services we can provide for the customer, the more they will need us, and the harder it will be to get rid of us,” the thinking goes. Sound logic, and when executed well, it does indeed pay off for the distributor.

However, in the words of one MHEDA member, success with fleet management is just a pipe dream for many distributors. The problem, according to Steve Ross, operations manager at Komatsu Forklift Retail Operations in Long Beach, CA, is that these distributors give good lip service to fleet management but don’t actually perform it very well for customers. “There are a lot of people who do fleet management,” Ross says, “but what happens is they don’t communicate it with the customer. They’re afraid the customer will find out how much it costs for the distributor to fix the forklift and they don’t want to stand up for their profits. However, the most profitable dealerships are the ones who make it a point to communicate this with their customers.”

It’s an interesting observation. The age-old industry question of “How much is the customer willing to pay?” rears its ugly head again. As has been pointed out on more than one occasion, there’s nothing wrong with profit. The end-users of your product are businesspeople who surely understand that. But it takes a true partnership, one in which both parties are willing to be frank with other and broach those not-so-fun to talk about subjects. According to Ross, fleet management doesn’t need to be one of those issues. “The truly successful dealerships have a partnership mentality, not an ‘I’m-going-to-make-money-off-this-customer’ mentality. You have to get over that and communicate with your customer. If you do enough of the right things for the customer, you’re going to make money. And if you don’t do it, there are plenty of people out there who will.”

What do you think? Have you seen this mentality at play in the marketplace? How can it be overcome?

Yesterday, two of my colleagues and I had the opportunity to visit MHEDA Distributor Member Liftech Equipment Companies in East Syracuse, NY, just a short 10-minute from our offices. Liftech President Joe Verzino, who served as MHEDA President in 1997, was kind enough to take some time to show us around the operations of a real lift truck distribution facility.

Sometimes, as writers, it’s easy to forget that that we’re not actually in the industry we write about. We do the best we can but we don’t see the equipment every day and don’t have the hands-on material handling experience that MHEDA Members do. That’s why it’s imperative for us to rely on you for insight, article ideas and comments on trends that impact your businesses.

So getting a chance to visit a distributorship is an opportunity that we wanted to take advantage of. My colleague, Steve Guglielmo, who just joined the company a few weeks ago, had an interesting take on our visit in his blog about learning the industry. This was my second tour of the facility, but it wasn’t without a few learning experiences of my own.

One of the things I found interesting was how, even though Liftech has 7 branches across 3 states, all of their rental activity was controlled at the East Syracuse headquarters. I knew about this thanks to a story we published last year on their switch to a centralized rental program, but I had never seen the plan in action. It was amazing to see that just a few people in one place could handle so much activity spread across a 600-mile territory. Also, Verzino mentioned the difference between the major manufacturers his company represents. As a distributor for Hyster Company forklifts and JCB construction equipment, Verzino can see a definite difference between the publicly owned company (Hyster/NACCO), and the private one (JCB). He was quick to point out that neither approach was better than the other, but it is easy to tell from the way they operate which is which. The NACCO group is much more traditional and  JCB is more free-wheeling.

Thanks to Joe and the crew at Liftech for their hospitality!

Before it gets too far in the rearview mirror, I wanted to take a moment to remember the tragedies that occured in New York City, Washington, DC, and a field in Pennsylvania on September 11, 2001. As we passed the ninth anniversary of those events last weekend, it reminded me that our industry, the material handling industry, played a significant role in the aftermath and cleanup of the World Trade Center. The First Quarter 2002 issue of The MHEDA Journal (unfortunately, this article isn’t available online) outlined a few of the many inspirational acts that MHEDA members made in the days and weeks following the attacks.

• MHEDA staff worked diligently to coordinate hundreds of calls to the office by members who wanted to help. They found an organization who accepted donations directly to help the relief efforts, and donated pallet jacks and more poured in via the Feed the Children charity.
• A conveyor was set up at the Fresh Kills landfill on Staten Island to help sort through debris being remvoed from Ground Zero. This is, of course, in addition to all the equipment and supplies being used at the scene.
• 2007 MHEDA President John Cosgrove, was a volunteer firefighter in his hometown of Fair Lawn, NJ, about 15 miles from Manhattan. The morning of the attacks, his unit was designated as a “task force” and he reported to his fire house. His house was never called, but it was an experience he won’t soon forget.

These are only a few of the ways that our industry rallied in the days that followed. Thank you to everyone who helped and our prayers remain with those who perished. God Bless America.

A

So it’s September already. How did that happen? I’ve been immersed in preparing the Fourth Quarter issue of The MHEDA Journal, and time has been rolling along at a pretty good clip.

Speaking of rolling, one of the articles I’ve been working on is an analysis of how forklift tires reach the end-user. So far we’ve come up with 10 different paths. 10! It’s a much more convoluted market than I had anticipated. I’ve talked to several tire manufacturers, a few forklift distributors, parts departments and more to get as many perspectives on this interesting and often overlooked aspect of the material handling business as possible.

One person I spoke with was Mike Sain at Material Handling Inc. in Nashville. Mike’s company had a long history of providing tire service before getting out of the business about 15 years ago. Within the last year or so, he has gotten back in thanks to some help from his forklift manufacturer. Mike says, “We’ve used our tire service as a door opener into some large target accounts. We’ve worked deals with some local fleet users who previously weren’t using our trucks, service, parts or rental, but were unhappy with the local tire guy. We went in and offered better tire service. We delivered, and that has led to business in other areas of our company.” Read more of Mike Sain’s comments in the upcoming issue.

I’m still trying to round up some info on the market, so if you have any inside details about the forklift tire industry, let me know.

In preparing some headlines for wikiMHEDA today, I came across an interesting story from the Chinese website peopledaily.com. It is the online home of People’s Daily Online, whose tagline says, “Launched in January 1998, People’s Daily Online is a website built by People’s Daily, the official newspaper of the Communist Party of China.” I say that to pre-emptively say that I’m not sure how reliable the information I’m about to share is. China is not known for its open journalism. 

That being said, the facts stated in the story are interesting and may have some impact on industrial truck distributors and suppliers in the United States. The lead of the article states, “Forklift sales in China more than doubled in the first half of the year and are poised for further growth in the full year, industry experts said on Monday [July 19]. China will continue to lead the global market and the gap with US, the next biggest player, is set to widen further, they said.

“During the first six months of the year, domestic forklift sales rose across the 90,000-unit barrier, up nearly 113 percent from a year earlier.”

Two things strike me about this. One, that’s a hefty boost in sales. The article says it’s “forklift sales in China,” but it’s not clear if that figure accounts for only Chinese-made forklifts or imports into China as well.  Either way, that’s a pretty quick recovery and upward trend.

Second, it says the gap between China and the U.S. is expected to widen. While that doesn’t come as much of a surprise at this point, I’m hoping that is not the case. Here’s wishing that our domestic industry can rebound quickly enough to remain competitive, at home and abroad. Any thoughts on this? I’d love to hear from someone with more knowledge on the situation.

This is the second case of material handling in China I’ve written about in the last week. Check out the newly improved website for The MHEDA Journal and an article discussing the antidumping duty saga regarding wire decks.

One of the biggest sporting events in the world literally kicks off tomorrow. To us in America, it may not seem so, but the FIFA World Cup is believed to be watched by more viewers globally than any other event. So it’s nice to know that our industry will be playing a role, even if it’s a small one. My colleague Dan Vest, editor of MHEDA Edge, came across a news item that I wanted to share with you.

Evidently, several JCB forklifts will be present at six World Cup venues for use both inside and outside, mainly for preparking hospitality suites, concession stands and other visitor facilities in and around the venues. The trucks were also used during the final construction and fit out phases of the construction of Soccer City in Johannesburg, the 94,000-seat stadium that will play host to the first and final games of the tournament. Other venues featuring the forklifts include Royal Bafokeng Stadium at Rustenburg, Free State Stadium, Bloemfontein, Peter Mokaba Stadium, Polokwane, the Durban Stadium and Green Point Stadium at Cape Town.

If nothing else, it’s more good exposure for the industry. I’d love to hear if anyone spots one!

U-S-A! U-S-A!