The Mheda Journal

While talking to MHEDA members for our annual industry forecast, I heard from several people how sales of used and rental equipment, forklifts in particular, will be tools to lead the material handling industry out of the recession. The reasoning is, many end-users can’t afford a large expenditure on new material handling equipment, but may be able to afford the cost of used equipment or the small monthly outlay for a rental unit. This is a good way for dealers to maintain their cash flow now and retain a customer who may buy new equipment once the market rebounds.

It’s sound logic. That’s why it was interesting to talk to one distributor member, a forklift dealer (I’m going to keep the name out of this because they didn’t realize they would be quoted in this platform), this week who shed some more light on the used material handling equipment industry. One of the more interesting insights this person gave was that prices on used equipment will be rising because of the dearth of new equipment being sold. Before long, this distributor says, the cost savings won’t be all that much. With no new equipment that will become used equipment in a few years, the supply of used equipment will be small, and prices will need to rise.

Another point on that topic came up in a discussion with a colleague subsequent to that call. What new equipment was sold over the last few years will have less wear-and-tear on it than same-aged used equipment from a few years ago, because end-users aren’t as busy. Trucks may be running fewer shifts than normal. This will also affect used equipment pricing because the used equipment that is being resold will be in better condition than a used truck has been traditionally.

It’s an interesting trend to follow over the next 18-24 months. I’d love to hear your thoughts on this issue.

On Thursday, October 1, MHEDA published a new issue of MHEDA Edge, the association’s online magazine for young professionals. Although the issue, as always, is targeted at the young up-and-comers in the industry, I think this one is full of information that everybody can use.

Titled “The Economy: Stepping Back From The Edge,” the October issue is all about finances. It includes interviews with CFOs, tips for managing a parts department, and a recap of MHEDA’s Rental & Used Equipment conference. All important things, but I think the most useful article is from material handling consultant Matt Senecal, who explains myriad startegies for making money in sales, service, parts and rentals. 

I encourage you take a look at it and pass it along to your employees and co-workers. There’s a lot of important information in this issue. Kudos to Edge Editor Dan Vest for tackling an important issue in today’s marketplace!

In talking to MHEDA member Fred Oram, president of Oram Material Handling Systems, he made an interesting point about rental equipment. He was telling me about a long-term rental deal he made that included a full maintenance provision. “Remember, we still own the equipment,” he says. “It’s in our best interest to make sure it still runs right.”

That hit me like a ton of bricks. I’m sure this is an obvious fact to most distributors out there, but it was something I never considered. Why wouldn’t the maintenance be included? If the asset is still yours, and you’re in the position to make sure it stays running in peak condition, obviously you’d want to so. That’s not only great for the customer, who will have a top-performing machine throughout the duration of the lease, but great for the renter as well, who will have a top-performing machine at the end of the rental period to either re-rent or sell as used equipment.

I’m sure there’s lots more about renting, leasing and used equipment that I don’t know, which is why talking to Fred reminded me about the upcoming “Making Money in Rental & Used Equipment” conference MHEDA is sponsoring in a few weeks. I’m sure it will be informative and helpful to anyone in the industrial truck market.