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!

I received a press release today about a major material handling distributor in the Southeastern United States expanding its rental fleet. This company now offers more than 4,200 pieces of rental equipment in its fleet. The first thing that jumped out at me was that large number of fleet units, unquestionably one of the largest in the nation. The second thing that jumped out at me was the reason given for doing so. “We have been encouraged by the increased activity in many of the industries that we currently provide rental equipment to, especially the convention services business, which is steadily rebounding after a tough couple of years,” said a company spokesperson.

Anticipating growth in the market, this particular distributor strategically purchased equipment in three major categories—aerial booms, industrial forklifts and telehandlers. When conducting interviews for MHEDA’s Annual Industry Forecast, multiple respondents cited the need to rebuild inventory levels and rebuild their rental fleets. The thinking was, the demand for these items is bound to recover, and when it does, the companies that have the trucks in stock will be able to most quickly handle those customers. It’s sound logic, and it looks as if that scenario is already playing itself out.

Of course, it’s a fine line between having enough inventory to meet customers’ demand and having so much that you’re not utilizing your assets. How can you ensure that you’re in that supply-and-demand sweet spot?

As I mentioned in a previous blog entry, I spent the last couple weeks of 2010 reaching out to manufacturers and suppliers in the material handling industry, trying to develop a list of article ideas for the magazine in 2011. Among the people who responded was Marcel VandenTop, general manager at Intella Lift Parts. According to VandenTop, there is a trend developing whereby some dealers are selling more parts outside of their geographic area. “Let’s say you’re a dealer in Oklahoma. In the past, you’d have a couple of stores and that was the area you focused in. Now, companies have a web presence and can take phone calls from anywhere in the country. They’re drop shipping and selling anywhere, which is kind of a new thing.”

Of course, he doesn’t mean that everybody is doing this, but it’s not all that uncommon, either. As VandenTop says, “I see some strange shipping requests. Someone in Oklahoma is shipping to California. There’s a whole undercurrent that some dealers are engaged in. Not everyone, but it definitely happens.”

I mentioned a similar situation in a blog several months ago that got the world abuzz, and it’s clear that the industry is not gotten less connected online since then. One interesting thing VandenTop notes is, “Some of this movement is being led by people who literally work out of their houses. They don’t have any overhead.”

What do you think? How does this situation affect a territory-based distributor? What does it mean for the industry as a whole?

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.

How many ears of corn grow on one giant stalk? Most people (myself included) think the answer is “a lot.” But if you said “one,” that means you’re either from Nebraska or you attended 2009 MHEDA President Duncan Murphy’s workshop at last week’s MHEDA Convention.

I want to revisit Duncan’s presentation before it gets too much further into the past. Not that the information would be any less timely…I just don’t want to forget to mention what I got out of it. I didn’t really have time to give it the attention it deserved at the time.

Duncan gave a presentation titled, “Strategic Planning: A Practical Application to Help Grow Your Business and Your Profits.” It was well-attended by distributors and suppliers alike, and I have no doubt that everyone left with some new information and tips to better run their businesses. As the title suggests, the session was about the importance of developing a strategic plan. I won’t go into the details of the strategic planning model used (it’s the same one MHEDA uses that has been presented at past conferences) but I do want to focus on the point of the corn analogy above.

One stalk only grows one ear of corn, but each ear of corn has 300 kernels, which are the seeds to grow a new stalk of corn. Duncan explained that the strategic planning process at your company can sprout the same way. He explained that a strong team of managers developed the plan (the ear) and then dispersed the message to all the employees (the kernels). Once the employees buy-in to the plan – which is a multi-step process that includes improved communication, measured results, goal setting, reviews and revisions, etc. — then the “kernels” can sprout. The employees will perform better, and they can be the basis for a new, improved company (the stalk).

I thought this was a really interesting concept. I assure you that Duncan explained it much more eloquently than I just did. (Downloads of presentation materials are available on MHEDA’s website.) All you really need to know is that by following the strategic plan he outlined in his presentation, Riekes Equipment Company was able to increase its profit despite a 18% drop in sales and earned 2009 “Top Dealer” awards from both Yale and Combilift. Not a bad year, all things considered. That’s the importance of a strategic plan.

Technorati token: B8X9XQUR3JHB

Today is Earth Day; it’s the 40th anniversary of Earth Day, in fact. I learned yesterday that the impetus for Earth Day was the day when my hometown Cuyahoga River notoriously caught on fire near Cleveland, Ohio. Can’t say I was proud to learn that fact, but at least something positive came out of that debacle. (Well, two things, if you count the song “Burn On” by Randy Newman.)

Earth Day seems like as good a time as any to talk about the continuing efforts of our industry to go green and help end-users of material handling equipment (which is virtually everyone) do the same.

The material handling industry is at the forefront of the sustainability movement, whether it’s:

• Reducing forklift emissions
• Warehouses that go up instead of out and preserve more green space
• Turning off power to certain parts of a customer’s warehouse when not in use
• Encouraging adherence to green building codes
• Embracing alternative fuels
• Increasing remanufacturing opportunities.

And just today, I read about a study finding that logistics companies made commitments to sustainability during the recession.

Consider this a tribute to our industry. Keep up the good, green work! (Editor’s note: See The MHEDA Edge Editor’s Blog to read another perspective on Green Material Handling.) Happy Earth Day, everyone!

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!

In my post titled, “More Forklift Distribution Mergers” from January 8, I may have misled some readers by saying that Alta Lift will be representing Yale in the Chicago market. That is incorrect. Yale will continue to be represented in Chicago by YES LIFTS. Alta will be representing both Hyster and Yale in certain markets, however, and the posting has been corrected to reflect that.

Here’s the full language of the original press release:

GREENVILLE, N.C., Jan. 7, 2010 – NACCO Materials Handling Group, Inc. (NMHG) has appointed Alta Equipment Company (Alta) as the Hyster dealer in the Western Michigan and Chicago markets, effective January 1, 2010, with the acquisitions of Mid-State Industrial Services, Inc. in Michigan and the Aurora Lift business in Illinois.

 On December 30, 2009, Alta completed the stock purchase of the Hyster dealer, Mid-State Industrial Services, Inc., based in Eaton Rapids, Mich.  Mid-State, a Hyster dealer since 2005, covered 12 counties in Indiana and 37 counties in Western Michigan. Mark Drummond, the dealer principal of Mid-State will remain with the business and will be part of the leadership team at Alta.

 Alta also acquired the Aurora Lift business in Montgomery, Ill., as its first Chicago-area location, with several more locations expected to follow. Alta will not represent competitive brands previously represented by Aurora. Alta has been the Yale dealer in Michigan since 1984 and has been recognized eight times as a Yale Dealer of Excellence.

 “We are delighted to expand our forklift footprint to represent the Hyster^® brand in Western Michigan and Chicago,” said Steve Greenawalt, owner and dealer principal of Alta. “The acquisition of Mid-State Industrial brings a committed workforce and a customer service culture consistent with what we provide at Alta. The acquisition of Mid-State provides us with a contiguous corridor into Chicago. We are excited about the opportunity from Hyster^® to become the exclusive dealer for the Chicago market and aim to bring our unique approach to customer satisfaction to that market as well.”

 “We are very pleased to see the merger of Alta and Mid-State to create a strong dealer representing both Hyster^® and Yale^® brands in Western Michigan, said Colin Wilson, chief operating officer and president, Americas for NACCO Materials Handling Group, Inc. “We are equally pleased to have Alta move into Chicago as the Hyster brand representative and feel that the dealership will do a great job serving the needs of current and future Hyster customers in that market. Yale will continue to be represented in the Chicago market place by YES LIFTS, LLC, Voss Equipment Inc and Fitzgerald Equipment Company, Inc.”

Sorry for the confusion, and thanks to Chris at YES LIFTS for bringing this to my attention.

A few days ago, I posted a note about Yale dealer NITCO Material Handling taking over the Hyster dealership in its territory. I said:

Though the announcement doesn’t explicitly say so, the combination of NITCO, a Yale dealer, with the Hyster dealer in its territory would appear to be another instance of NACCO Materials Handling Group, the owner of both Yale and Hyster, strategy to allow distributors to carry both lines for the first time.  To my knowledge, Arnold Machinery Company (Salt Lake City, UT) is so far the only dealer to take advantage of this arrangement.

Well, yesterday word came that, indeed, NITCO is taking on both lines by way of a press release from NMHG stating:

NACCO Materials Handling Group, Inc. (NMHG) has appointed Northland Industrial Truck Company, Inc (NITCO) as the Hyster dealer for Connecticut, Maine, New Hampshire, Rhode Island and parts of Vermont and Massachusetts. In addition, NITCO will remain the Yale dealer in Maine, New Hampshire and part of Massachusetts.

In a separate NMHG release I received yesterday, it was confirmed that Alta Lift Truck is now a distributor for both Hyster and Yale in certain markets. This is going to be an interesting trend to follow in 2010. I’d be interested to know what other people think about this.

Earlier this month, Northland Industrial Truck Company (NITCO) of Wilmington, MA, agreed to purchase North Billerica, MA-based Hyster New England. According to the press release on NITCO’s Web site, Hyster New England president Charlie Haywood is stepping down after 40 successful years in the material handling industry.

According to the release, “The combined organization will move forward under the ‘NITCO Materials Handling Solutions’ brand and will add two new full service facilities bringing its total facility count to six throughout the New England area.”

Though the announcement doesn’t explicitly say so, the combination of NITCO, a Yale dealer, with the Hyster dealer in its territory would appear to be another instance of NACCO Materials Handling Group, the owner of both Yale and Hyster, strategy to allow distributors to carry both lines for the first time.  To my knowledge, Arnold Machinery Company (Salt Lake City, UT) is so far the only dealer to take advantage of this arrangement.

It will be interesting to see how this continues to play out.