Each year, The MHEDA Journal interviews a random group of MHEDA Member distributors across North America to find out expectations for the year to come. According to this year’s survey of distributor members, 2008 is shaping up to be an uncertain year for a lot of material handling distributors.

As recently as three years ago, more than 90 percent of those interviewed projected sales increases. This year, that number is down to 72 percent. Almost 22 percent expect sales to remain level and more than 6 percent are bracing for declines.

However, the numbers do vary significantly across product lines. Ninety percent of storage & handling distributors interviewed forecast an increase, as do more than 81 percent of engineered systems distributors. However, only 57 percent of those with diversified product lines do.

Geographic variations are obvious as well. Only 50 percent of distributors in the Northeast forecast a sales increase, while nearly 88 percent of those in the Southwest and 83 percent in the Midwest do.

Explanations for such inconsistencies include an uncertain economy as the presidential election approaches, the rising costs of health insurance and fuel, and the ongoing struggle to attract qualified technicians. On the bright side, distributors are seeing technological enhancements and more focused training to help add to their successes.

For the most part, MHEDA distributors are still expecting things to Accelerate in ’08. Read on to learn how they plan to achieve it.

STORAGE & HANDLING Distributors Stock Up For Increases
The theme of acceleration is nowhere more evident than among distributors of storage & handling products, as 90% of those interviewed foresee a sales increase in 2008 by an average of 13%. Reasons for such optimism include increased inventories, new business operating software and a host of new distributor facilities.

By the fourth quarter of 2008, Brian Reaves, president of Integrated Warehouse Systems (Woodridge, IL), will be consolidating two companies under one roof, a move that will solve some space issues and allow the company to stock more inventory. “End-users are tending to wait until the last minute to make purchases, and the demand for immediate products and quicker turnaround will be crucial in the coming year,” he says. Reaves will focus on the company’s relationship with a fewer number of key vendors and improving relationships with each. All told, Reaves expects sales to increase by 10%.

Increased inventory will be a key at Ludlow Sales & Service (Columbus, OH). President Michael Talis says, “We fight against Internet sales every day, so having more product available here will help give us an edge.” Talis will, for the first time, invest in developing a Web site. “I never saw the need for it before, but the necessity of it has become apparent,” he says. He predicts that an uptick in the used market will offset a slow new market, and predicts sales will be up at his company by 10-15%.

“We are expanding our design capabilities and investing in online marketing efforts.” Kevin Rowles, President Storage Solutions (Westfield, IN)   “We are updating our server and account management programs.” Don Mays, President Craft Equipment Company (Tampa, FL)   “We are bringing in complementary products and focusing on new markets.” Dan Powers Vice President Dunn/Powers Caster Corporation (Phoenix, AZ)   “We must find good people to take over management and sales positions when people retire.” Marilyn Tang, President Certified Handling Systems (Salt Lake City, UT)   “End-users are demanding a more concise approach to move their products from point A to point B.” Dan Seago, President North American Material Handling (Dallas, TX)   “Distributors who have good inventory in-house will be better positioned to serve customers.” David Shank, President Deluxe Systems of Florida (Tampa, FL)   “We’ll look at our hourly rate for technicians to make sure we’re counteracting rising fuel costs.” Jeff Ross, President ESS Group (Brenham, TX)

A similar forecast is offered by Robert Bogaczyk, president, Track Systems (Madison, WI), who expects that new territory salespeople will yield 10-12% sales growth. Bogaczyk will open a new Michigan location once he acquires the space, and is in discussion with potential partners on new technology to help customers. “We want to offer additional communication to our client base, from error-proofing to data logging. That’s a brave new world for us,” he says, adding that the company is also working on a patent for a new assembly product.

Don Mays, president of Craft Equipment Company (Tampa, FL), foresees a down year ahead. Quoting activity slowed down dramatically in the fourth quarter, so Mays thinks bad debt is catching up with customers and will continue to restrict their spending. The key, Mays says, is to prospect harder and work with existing customers for opportunities to save money. Despite the predicted 20% slowdown, Mays will be looking to double the size of his facility and add as many as five employees in sales and service.

A much more optimistic forecast comes from Kevin Rowles, president, Storage Solutions (Westfield, IN), who is expecting a boost of 15-20% driven by a concentration on account penetration and installation services. Rowles is considering a warehouse relocation for additional new and used equipment inventory, and notes, “The biggest challenge will be a potential move while maintaining our normal work schedule.” Rowles expanded his national account sales staff and project management teams in 2007 and expects them, along with additional crew leaders and laborers, to be fully functional in 2008 to drive growth.

New opportunities in areas such as in-plant buildings and bearings are enough for Dan Powers, vice president of Dunn/Powers Caster Corporation (Phoenix, AZ), to predict a 5% sales escalation. “Customer needs tend to fall on the cycle of quality, then price, then back to quality,” says Powers, adding that he needs to make sure his people can identify which cycle the customer is on. He expects to add two inside and outside salespeople, though acknowledges the difficulty finding those people. “We can teach them the widget, but we need to find the right personality for our company.”

Certified Handling Systems (Salt Lake City, UT) is celebrating its 40th year in business, and President Marilyn Tang is poised for a good year. She forecasts a 20% sales increase thanks to some technological advancements in project design. “We are approaching customers with a way for them to look at a laptop and see how their building will look and make instant changes to what they don’t like,” she explains. Tang will also do more in the used rack business, accepting trade-ins of pre-owned equipment. Finding employees will be a challenge, but Tang will try to add three people in sales and accounting.

Diversification into the solar panel business has Dan Seago, president of North American Material Handling (Dallas, TX), expecting good returns in 2008 and even into 2009. The company opened a sister division called Solar Power USA in 2007 and already has several projects underway throughout the United States. Seago sees many new projects started in material handling also, leading him to speculate sales growth of 15%. “Our growth will be dictated by the base of customers we’re expanding to,” he says. Seago expects to expand into a new building sometime during 2008 and add at least two salespeople.

“End-users are doing more with fewer people, which makes us more important to them because we provide valuable solutions,” says Jeff Ross, president of ESS Group (Brenham, TX). Ross will be focusing on conveyor lines and an automatic storage and retrieval line in addition to pallet rack sales. ESS Group will be expanding its geographic footprint to cover more of Texas and adding two salespeople. Add that to a strong oil industry in his market, and Ross expects sales growth of 10%.

At Deluxe Systems of Florida (Tampa, FL), President David Shank is making a host of changes in 2008, including offering a line of rivet shelving, stocking new pallet rack and cart inventory, and dealing more in used rack. The company now has a printed product catalog and a revamped Web site. Shank says all this, plus three to four new salespeople, will combine for 8-10% sales growth. “Being able to logistically handle all the installation and delivery activity to keep up with sales will be a challenge,” he adds, noting that two installers hired near the end of 2007 will help lighten the load.

Cautious Optimism Pervades INDUSTRIAL TRUCK Market
Several industrial truck distributors interviewed are careful to point out that the market for new equipment may decline in 2008. However, many of these same distributors say their own individual businesses will increase due to new product technology, revamped marketing efforts and renewed concentration on parts and service business. Among the 64% of truck distributors predicting a sales increase, the average gain is 8.8%.

For Clarklift of Des Moines (Des Moines, IA), a 10% increase is in the offing as President Rick Radcliff and his staff implement some internal changes, including more focused direct marketing and investment in inventory and accounting software. “We’ll have efficiency improvements without adding staff, especially in dispatching and inventory control,” Radcliff says. He is also working to implement a strategic plan for the company.

A similar expectation is in the offing for Tri-Lift NC (Greensboro, NC), which was able to add Clark forklifts to its product line. President Bob Bond believes this will help drive sales growth of 10%. The recent completion of a 4,500 sq. ft. warehouse for the company’s rental fleet will also help, as will the addition of technicians and a product support representative. “Companies really need to be spending money on diagnostic tools and training for technicians to properly diagnose equipment,” Bond says, though he expresses concern about fuel costs, interest rates and health care expenses.

“Customers are looking for partners to solve problems and share in the risks and rewards of their businesses.” Tim Heesacker Material Handling Division Manager NMC Material Handling (Omaha, NE)   “We’re providing lift trucks to a local vocational school to help teach people about the industry.” Wayne Dick, President Independent Lift Truck of Alaska (Anchorage, AK)   “We will invest in vehicles with greater fuel economy to mitigate the cost of fuel.” John Waugh Jr. President/ General Manager Gray Lift Inc. (Fresno, CA)   “We’re trying to convince customers to optimize spending by paying for utility rather than paying for the truck.” John Faulkner, President FMH Material Handling Solutions (Denver, CO)   “We’ve seen a lot of building and development of industrial parks in our area, which may contribute to a need for new equipment.” Alicia Nyborg, Owner SuperTech (Fayetteville, GA)   “We’ve disciplined ourselves to have more of a personal touch and not rely so much on e-mail and phone calls.” Eric Davidson, President Santana Equipment Trading Company (Gurnee, IL)   “End-users have many other things to worry about, so it’s our job to help them keep their costs down.” Gary Fairchild President/Owner Yale Materials Handling –Green Bay (Green Bay, WI)   “We have an in-house trainer who will be out on the road with new technicians.” Randy Matthews President Preferred Material Handling (Oklahoma City, OK)   “We will take process cost out of our operations and mine more of the customer database.” Ken MacDonald President M & G Materials Handling Company (East Providence, RI)   “We will be more creative in our approach to serve auto plants and auto suppliers by partnering with battery providers.” Greg Blackwood, CEO Fraza Forklifts (Plymouth, MI)   “We are enhancing our Web site so customers have access to more information about our company.” Scott Huff Sales Manager Viccaro Equipment Corporation (Hauppauge, NY)   “Our customers are moving toward more electric product, and we’ve got to educate ourselves and our customers about applications for those products.” Carl Swanson, President Equipco Division Phillips Corporation (Bridgeville, PA)   “It’s critical that we watch what’s happening with the economy so we don’t overstock our inventory.” Joe Loya, Vice President CB Toyota-Lift (Kent, WA)   “Customers want to see reports and cost reductions as we get into more guaranteed maintenance, and software improvements will help us provide that.” Steve O’Leary, President Northland Industrial Truck Company (Wilmington, MA)   “We are looking for add-on products that will help us meet the needs of our customers.” Michael Snyder, CEO Vertical Lift Truck Services (Anaheim, CA)

“In the past, we have supported our customers by providing quality forklifts and superior service and product support, but customers today need more,” says Tim Heesacker, material handling division manager at NMC Material Handling (Omaha, NE). “They need support in managing their business.” Therefore, NMC will become a true partner by providing support and consultation on fleet management. Combined with the ethanol boom and the hiring of additional salespeople, Heesacker sees sales rising by 9%. In order to find the product support and salespeople he’s looking for, Heesacker will rely on in-house company recruiters.

One of the most optimistic forecasts comes from Michael Snyder, CEO of Vertical Lift Truck Services (Anaheim, CA), who is anticipating sales growth of 22-23% thanks in part to increased service presence and the addition of three technicians and one salesperson. “We’re totally mobile in service and are very responsive to customer needs of quicker turnaround times,” Snyder says, adding that a move from Brea, California, to a larger facility in more populous Anaheim in fall 2007 is helping to generate new business.

A less rosy outlook is offered by John Faulkner, president, FMH Material Handling Solutions (Denver, CO), who blames an overbuilt housing situation in Denver for an expected 3-4% decline in sales. “Our only bright spots are areas that touch energy—oil, natural gas and mining,” Faulkner says. To overcome that and help retain existing customers, FMH will revamp its customer service structure and aggressively promote rentals and full maintenance contracts. Faulkner plans to make technological upgrades to the company’s internal operating systems during the second quarter.

Another distributor looking at declining sales in 2008 is Dan Phillips, president of Carolina Industrial Products (West Columbia, SC). He believes the cost of energy and health insurance are two contributing factors to an overall reduction of 5-8%. To counteract this, Phillips will increase the marketing of service and reconditioned equipment while focusing on new charging concepts on the market. “We are recommending more batteries to accommodate shift requirements and opportunity charging when the application fits,” he says. Despite the downturn, Phillips hopes to hire one to three service technicians, provided he can find good ones who pass background checks.

Diversification is the key to surviving a down economy, says Alicia Nyborg, owner of SuperTech (Fayetteville, GA). “People will be looking to save money by buying used equipment and fixing older equipment, which is where the margins are,” Nyborg says. SuperTech will expand offerings to include more pallet rack while also adding customers with larger forklift fleets. In addition, Nyborg is looking to purchase a new facility. “I think providing employees with the space to do their jobs properly is a large benefit and is good for morale and productivity.” It all adds up to a sales increase of 10%.

Ten percent growth is also the anticipation of Mike Greenwood, president & CEO, Shipping Utilities (St. Louis, MO), thanks to targeting larger accounts and greater emphasis on Class II and III products. “Although the customer base in St. Louis is shrinking, more major customers are taking a stronger look at our products,” Greenwood says. After adding two new salespeople in the first quarter, he plans to sell more fleet management and GPS instruments to help customers report accurate data immediately.

Wayne Dick, president of Independent Lift Truck of Alaska (Anchorage, AK), foresees a sales elevation of 4% based on a flourishing Alaskan economy and the addition of a low-end Chinese forklift line that will appeal to a new base of customers. He sees a challenge in finding technicians to keep up with a widespread customer base. “We would like to go out and get more customers, but we just don’t have enough techs to take on any additional work right now,” he says. Despite this, Dick plans to expand the service department by trying to recruit employees from the Lower 48. ILT covers the whole state, meaning the company has to do a lot of flying to cover its territory, which poses another challenge.

Similar results are expected by Daniel Smith, president, Hansler Industries (Brockville, ON, Canada). The company just consolidated a branch location into a new facility and hopes that will help generate new equipment sales. “Our strong Canadian dollar will affect customers. As they get less busy, our market may go down, so it will be a challenge to maintain what we’ve got,” says Smith, who predicts a sales escalation of 3-4%.

The same prediction of a 3-4% increase is offered by Joe Loya, vice president of CB Toyota-Lift (Kent, WA). Although he sees a flat overall market, he believes aftermarket sales will be picking up to account for the increase. “Customers will be buying less new equipment and fixing the older machines, so our revenues will switch more to the parts and service side,” he says. Loya points to a new facility that is twice as big as the previous building and a focus on fleet management as boosts to business in 2008. The company will be investing in service trucks outfitted with welders and compressors to help the increased service business.

Fresno, California-based Gray Lift saw a slight downturn toward the end of 2007 that will lead 2008 sales to be level with 2007, according to John Waugh Jr., president and general manager. “Maintaining our sales levels will be a challenge, especially because of the huge price increases we’ve had on batteries due to the cost of lead,” Waugh says. Doing business in the state of California provides its own set of challenges, most notably emissions regulations. “End-users have to meet some pretty strict emissions goals with their fleets, and we need to do a good job making them aware of the requirements.”

Central Forklift (Piscataway, NJ) does solely forklift repair, and President Robert Salimbene predicts level sales even in a soft economy. “If people aren’t buying new equipment, they’ll need to fix old equipment and we will see that activity,” he says, adding that more and more customers are moving to electric equipment. Salimbene will try to generate more business by advertising online.

A flat economy and level sales are also the outlook by Brian Gretz, vice president, Transamerican Equipment Corporation (Matthews, NC). Gretz is looking to find new markets to sell more product, so the company recently hired a bilingual employee to help develop the local Spanish-speaking market. “We’ve talked about that for years and finally did it,” Gretz says, adding that the contacts generated by this employee will start to show more benefit throughout 2008. In addition, Transamerican will relocate its Savannah branch in the first half of the year and add equipment to the rental fleet.

President Rich Mattern will expand his service department by 10% at Raymond Handling Solutions (Santa Fe Springs, CA), leading to overall sales escalation of 5%. The addition of customer service reps and service technicians will be bolstered by a new method of retention developed by Mattern to hold on to good employees. “The cost of housing is so high in California that we often lose people to other states after getting them educated in the business,” he says.

Internal changes made over the past two years will help Santana Equipment Trading Company (Gurnee, IL) realize a sales gain of 5%. The company expanded to include a retail division after doing strictly wholesale business for several years. “We’re finally getting situated at our new location with the warehouse for loading and unloading, hiring warehouse guys and modifying our business practices,” Eric Davidson, president, explains. Santana also has branched out to more aerial equipment, industrial floor cleaning equipment and forklift attachments.

A declining economy and devalued dollar are concerns for Ken MacDonald, president, M & G Materials Handling Company (East Providence, RI). It will be a challenge to control variable costs like fuel, energy and taxes. However, MacDonald expects to counteract those issues with new Yale products and fleet management services that should allow him to gain market share, plus the addition of technicians and a marketing associate. MacDonald predicts all these factors will combine for level sales in 2008.

New product offerings from manufacturers will play a role at Viccaro Equipment Corporation (Hauppauge, NY), where Sales Manager Scott Huff forecasts a sales increase of 12-15%. Huff says that new narrow aisle and very narrow aisle products are in demand in the Northeast as warehouse space becomes more valuable than ever. Huff also says that a new training facility at the company headquarters will help draw customers into the facility and enhance sales and service revenues.

Equipco Division Phillips Corporation (Bridgeville, PA) will build its allied business through the addition of JLG and Tennant lines, and President Carl Swanson expects these to help the company achieve level sales. He sees more end-users moving toward electric units and focusing on ergonomics, two areas where Equipco will help meet customer needs. He is concerned about the economy, saying, “We’ve got people in our market thinking about spending capital dollars, but the housing market concerns may keep them from spending. We need to look at all available avenues to find sales.”

The same is forecasted by Greg Blackwood, CEO, Fraza Forklifts (Plymouth, MI), who says a “horrid” Michigan economy will continue. To overcome that, Blackwood and his team will change their approach to serving auto plants and auto suppliers. “We’re trying to be more creative in showing them how they can save money by eliminating unionized positions and using us as a vendor,” he explains. Blackwood, who purchased Fraza Forklifts in 2007, is also working to continue merging GB Sales & Service into the larger company, which will be more efficient in 2008. “We made huge investments as part of the acquisition and communication will improve as we move forward.”

Slight growth of 2-3% is the expectation for A F Enterprises (Texarkana, TX), where President Scot Akins is in the process of testing GPS technology to manage his technicians and his sales force. Akins is looking to add an as-yet-undetermined supplementary product line, provide improved in-house employee training and introduce new insurance to retain employees.

Blair Boyette, owner of Triad Forklift (Asheboro, NC), expects a 10% sales boost due to lease expirations and many batteries and chargers that must be replaced. “A lot of our customers have five-to seven-year-old equipment that must be replaced in 2008,” he says. He knows it won’t be easy in a highly competitive market, but he hopes his company’s record speaks for itself and encourages customers to stay. Boyette will also invest heavily in technician and sales training. “It’s not just a cut-and-dried forklift anymore,” he says, “so we’re providing a lot of specialty computerized products and attachments for end-users.”

Preferred Material Handling (Oklahoma City, OK) President Randy Matthews agrees. “What worked yesterday may not work today, so we have to know each customer individually and tailor our offerings to them,” he says, while predicting sales growth of 15%. The company has a lot of order activity in the works and has restructured internally to move some employees to different positions. “We evaluated where people were strong and weak and made some changes accordingly,” he explains. Matthews says he will be looking to add as many as eight employees in customer service, sales and repair and may add a showroom to his facility.

Steve O’Leary, president, Northland Industrial Truck Company (Wilmington, MA), says 2008 sales will be equal to 2007 levels. He doesn’t expect the economy to offer much help, particularly with housing and oil, but anticipates raising service rates and enhancing efficiencies. “We will consolidate our service calls and perform work at multiple locations within an area to cut down the travel time and fuel usage,” he says. O’Leary expects more business with guaranteed maintenance and fleet contracts and is looking to add eight service technicians.

CHECKPOINT How did you measure up? Find out by revisiting the 2007 Industry Forecast.

At Yale Materials Handling–Green Bay (Green Bay, WI), President/Owner Gary Fairchild predicts that continued demand for aftermarket services and outsourcing by customers will help his company achieve an overall 10% sales increase, which encompasses definite growth in the company’s Minnesota branches and level sales in Wisconsin. Adjusting to a new computer system will pose a challenge, but Fairchild is prepared to dedicate the necessary time and training to get everyone on the same page. Fairchild hopes to grow his service department by 10% and take care of his people so they will provide good customer service. “In a lot of respects, lift trucks are lift trucks,” he says. “It’s the people who provide the goods and service that make the difference.”

Automation To Take Off For ENGINEERED SYSTEMS
Distributors of engineered systems will continue to speed along in 2008. More than 81% of integrators project sales increases, by an overall average of 14.5%. The rosy outlook is fueled, in part, by increased focus on national accounts and international sales, product diversification and new product technologies like motorized rolling conveyors and robotic systems.

Longtime systems integrator S&H Industrial Services (Batesville, AR) will expand into general lines to take advantage of the needs of local customers. “Many major manufacturers in our area are losing product lines to Mexico and overseas,” says President Ken Hendrix. “While a few may try to add automation and reduce cost, I see most simply trying to maintain the operations they currently have.” Hendrix thinks the diversified offerings, along with the addition of three salespeople and relocating to a new building, will lead to 15-20% sales growth in 2008. To overcome the challenge of building name recognition for the general lines products, S&H will increase its marketing budget in direct mail and at local trade shows.

“Our large national accounts have been holding back the last couple of years, and they’re in need of some upgrades,” says Scott Lee, president of Conveyor Solutions (Schaumburg, IL), who predicts 10-20% sales growth due to multiple large systems that he already knows are coming in this year. Lee believes that maintaining margins will be a challenge, so the company will stay away from low-margin jobs. Lee also anticipates that more focused marketing of the planned maintenance and emergency service sides of the business will help achieve that growth.

“We must communicate effectively with clients as local building codes become more burdensome.” Michael Tucker, President Applied Handling NW (Kent, WA)   “We’re revisiting our existing customer base to market more sophisticated automated equipment.” John Williams, President ConveyorMan (Memphis, TN)   “We’re keeping our Web page updated with current, fresh content and also sending out newsletters.” Peter Lauder, President McCombs-Wall (Garden Grove, CA)   “We may rely on the strategic use of subcontractors, which we rarely do, to handle our sales growth.” Don Betman, President W&H Systems (Carlstadt, NJ)   “We won’t even bid on jobs where we know price is the only factor.” Scott Lee, President Conveyor Solutions (Schaumburg, IL)   “We’re seeing growth in dot-com and back-end DCs as brick-and-mortar stores realize more online success.” Bill Bastian II, President Bastian Material Handling (Indianapolis, IN)   “We must find people who have the ability to do more engineering sales.” Gary Ashley, President Conveyors & Drives (Atlanta, GA)   “One-stop shopping is a key need for our customers. That’s exactly what we offer.” Roger O’Brien, President Cross Bros. Co. (Rochester, NY)   “We must get our identity out there to let people know that we are about solutions, not just products.” Daryle Ogburn, President Advanced Equipment Company (Charlotte, NC)   “We will continue to expand employee benefits in an effort to retain our current work force and attract good people to our company.” Ken Hendrix, President S&H Industrial Services (Batesville, AR)   “We will work hard to implement ergonomic projects for our customers.” Richard Vandemark, President VanLyn (Memphis, TN)

John Williams, president of ConveyorMan (Memphis, TN), is forecasting a sales increase of 10-15% based on pent-up demand that is ready to break loose. “Our customer base is going to lose market share if they don’t automate and improve their operations,” he explains. He also expects to make up for flat domestic sales with robust sales internationally, particularly with installations in South America, Canada, Mexico and Asia. Williams will be training his sales force to become more involved with automated controls and warehouse management systems. He is looking to add a salesperson or two.

At McCombs-Wall (Garden Grove, CA), President Peter Lauder saw sales fall in 2007, but is predicting a rebound in 2008. He believes sales will jump by as much as 12%, thanks to a new salesperson who started in January and the addition of a project manager and mechanical engineer midway through the year. “Our biggest challenge is to have our customers correctly project what their budget is going to be for capital equipment. We spend too much time on projects that never go anywhere,” Lauder says.

A similar outlook is provided by Don Betman, president of W&H Systems (Carlstadt, NJ), who thinks his company’s strong fourth quarter will parlay into a sales leap of 13% in 2008. Managing such growth could be a challenge, however. “Our business is seasonal; all of our customers want us in there from January to August so they can ship at the end of the year,” Betman says. “We really have to cram a year’s worth of business into eight or nine months.” Betman is adding project managers along with mechanical and electrical engineers to handle the growth and is updating the company’s maintenance package so customers are more aware of when service must be done.

An overall sales rise of 10% at Conveyors & Drives (Atlanta, GA) may be bolstered by a large job on which the company bid on at the end of the year. If that project comes through, sales could be as high as 75% above last year, according to President Gary Ashley. Growth will come from increased marketing of overhead trolley conveyor systems, the development of outside salespeople and enhanced Web site emphasis. “It’s getting more and more difficult to get in and see people,” Ashley says, “so we are emphasizing our Web site much more to have people find us on the Internet.”

Cross Bros. Co. (Rochester, NY) President Roger O’Brien foresees a 20% sales gain resulting from aggressive capture of a more diversified customer base. He plans to increase his work force by 25% within the next six months and consolidate two facilities into one to accommodate that growth. He also sees robotics, optical sensing systems and lean consulting to be growth areas on which material handling distributors can capitalize.

Another optimistic forecast comes from Bastian Material Handling (Indianapolis, IN), where President Bill Bastian II predicts a sales escalation of 16-20% resulting from a strong load of orders in the fourth quarter. “The good news is sales will be up, but the bad news is you have to have the resources and infrastructure to execute those projects,” he comments, adding that he wants to make sure the quality of life for his employees in the field does not suffer when working on installations far from home. “We’ll try to rotate them back to home base or send their families with them on extended stays.”

“We’re positioned well if we just get a little help from the economy,” says Advanced Equipment Company (Charlotte, NC) President Daryle Ogburn. “What always concerns us is what the news media does to frighten people and keep them from spending on capital projects.” Ogburn believes that improvements to the sales force and internal computer systems over the past few years have the company on the right track. He will focus on training and getting better at the services offered by the company. It all adds up to level sales, perhaps a slight increase, building on activity in the fourth quarter of 2007.

Level sales are predicted for 2008 by Michael Tucker, president, Applied Handling NW (Kent, WA). Sales and marketing activity will continue to target large national scale accounts. “We will continue to work at separating ourselves from the price-driven world of some competitors and consumers,” Tucker says. A continuing challenge will be dealing with the complications associated with compliance to changing building and fire codes. “It is equally important that we educate potential clients as to the risks associated with a casual approach to the rules and regulations governing the application of material handling and storage equipment.”

Richard Vandemark, president of VanLyn (Memphis, TN), sees heightened customer interest in ergonomics. Meeting those needs could help his company see a sales increase of 10-15%. Plus, the influx of several new manufacturing facilities to the Mid-South area will lure business from second-tier and third-tier suppliers. Vandemark says insurance costs remain a major concern, along with retaining personnel and maintaining cash flow. “If you don’t have cash flow, you can’t afford insurance. If you don’t have insurance, you can’t keep anybody, and if you don’t have people, you can’t generate cash flow,” he says. “They’re all intertwined.”

DIVERSE MIX Companies To Experience Measured Growth
Distributors with a diverse mix of lines are further diversifying their offerings to try to achieve growth in 2008. Only 57% of these distributors are forecasting growth, while 29% are looking at sales to be level. Economic concerns are among the most-cited challenges, but those who are predicting increases can expect growth of 9.5%.

American Warehouse Systems (Minneapolis, MN) was recently awarded several long-term government contracts, and Director of Sales and Marketing Mark Juelich says this should increase his company’s sales by 25%. “We’ve always been a niche company specializing in federal government contracting,” he says, “but we will be expanding out to do more local on-the-street sales.” Handling such large growth may present a challenge, but Juelich plans to add several sales and support positions and a new facility on the West Coast to help manage the sales increase.

After purchasing a small, independent forklift company in the fall of 2007, Quality Forklift Sales and Service (Shakopee, MN) is poised for a 7½% sales increase. Vice President of Finance and Administration Colleen Wright says the acquisition, along with added sales staff, positions the company to better serve customer needs. “If they’re not in a position to replace equipment, then we need to make sure we keep their equipment running on the service end,” she says. Wright expects to remodel the current facility to add more offices.

“We will be more proactive in bringing what’s new in the marketplace to end-users.” Victor Perelmuter, President Siggins Company (North Kansas City, MO)   “We’d rather lose a customer because of price than sacrifice the customer-motivated goal of the company.” George Pimpl, President Reno Forklift (Sparks, NV)   “I see a shift toward much more high-density automated solutions.” Mark Juelich, Director of Sales and Marketing American Warehouse Systems (Minneapolis, MN)   “I’m concerned how the American subprime mortgage rate and credit crunch will impact the Canadian economy.” Art Wuschke, President Arpac Storage Systems (Delta, BC, Canada)   “Our growth in 2008 will come from the new facilities and new products we added in 2007.” Jim Dietz, General Manager National Lift Truck (Franklin Park, IL)   “We pulled our rentals in-house to concentrate on another class of customer without losing focus on our A and B customers.” Wayne Smith Vice President/ General Manager Forklift Enterprises (Hobbs, NM)   “An improved business system will improve our overall efficiency with better reporting capability.” Steve Rice, President Welch Equipment Company (Denver, CO)

Victor Perelmuter, president of Siggins Company (North Kansas City, MO), has seen “a good foundation” of orders near the end of 2007, which compels him to forecast an overall sales increase of 7%. He is hedging his bets somewhat, based on a sluggish economy and whether the funds will be available to finance larger projects. Siggins Company will be aggressively prospecting to overcome the challenge of finding new customers among a base of end-users who are more educated than in years past. “We must provide more complete services and be proactive in bringing what’s new in the marketplace to end-users,” Perelmuter says.

“There’s more money being pumped into our local economy than there has been in years,” says Steven Marmande, president, M & L Industries (Houma, LA). The rebuilding of New Orleans and surrounding infrastructure, upswing of the oilfields and a new chemical plant all contribute to Marmande’s positive outlook. It’s a struggle to find people though, so he will rely on headhunters, internal training and online advertising to try to find five to seven parts and service employees. “There will be more of a trend of end-users wanting to simply move product rather than own equipment,” which M & L will fight by providing more fair-market value leases with full maintenance. It all adds up to level 2008 sales.

The same results are expected at Anderson Wood & Metal Works (Girard, PA), where President Jim Anderson has seen much industry leave the area. “Erie is not as big as it was 20, 30, 40 years ago, but the companies that are left still need good equipment, on-time delivery and quality service,” Anderson says. He and his staff will rely on the time-tested methods of knowing the product and knocking on more doors.

Economic pressures are also a concern for Arpac Storage Systems (Delta, BC, Canada) President Art Wuschke. “The strengthening of the Canadian dollar versus the U.S. dollar may impact some of our customers who are in the export business to the United States,” he says, adding that western Canada faces a labor shortage that may impact pricing as wages rise. Arpac is currently in the middle of a one-year implementation of a new computer system, which will be a learning experience for his employees.

Being heavily tied to the fate of the automotive industry, Taylor Material Handling (Toledo, OH) will likely see a 5-10% downturn in 2008, according to President Jack Anton. He also sees a shift in his market from manufacturing to more warehousing and distribution. New products, new salespeople and new marketing strategies are all going to be in place to overcome the faltering economy. “We recently re-did a portion of our Web site to be more of an e-commerce site,” Anton says, adding that the company will also expand other marketing avenues, including direct mail.

Reno Forklift (Sparks, NV) is also likely to see a drop in sales, by as much as 10-15%, due to a sluggish economy and rising costs of insurance and company vehicles. “All of us in the material handling industry need to take a look at our profit structure and not make deals that take us below that. It’s a challenge,” says President George Pimpl. He will try to overcome the downturn through diversification. “We’re looking at some other avenues of income, like selling forklift trailers and performing service on air compressors and customers’ long-haul fleets,” Pimpl says.

Diversification is also a strategy at Forklift Enterprises (Hobbs, NM), where Vice President and General Manager Wayne Smith has taken on a line of agriculture equipment to try to offset slumping industrial sales. The company also developed a lease-to-purchase rental program that is handled in-house, which he expects to help boost sales. A volatile oil and gas production industry in his market will keep sales growth limited to 10%. Smith plans to invest in human resources, safety and new product technologies.

For Kellen Watkins, president of Materials Handling Equipment Corporation (Fort Wayne, IN), slow forklift sales will be offset by strong activity on the crane side of the business. During 2008, the company will unveil an asset management product developed in-house that will provide customers with real-time information about their fleets. The new revenue streams created by that investment will result in some sales increase to further offset truck sales.

Welch Equipment Company (Denver, CO) will experience 3-5% sales growth in 2008 thanks to increased sales coverage and deeper penetration of existing customers. The company is also reviewing a new business system and options for mobile, wireless technology to allow technicians to bill customers more efficiently and accurately. “We will constantly monitor our 2008 sales and marketing strategy and respond quickly to any market changes,” says President Steve Rice, who also says that increasing market share for all key vendors will be an ongoing challenge.

Gerald Rogers, president, Manchester Industries (York, PA), believes an uptick in aftermarket programs such as guaranteed and full maintenance contracts will help boost his company’s sales by 5%. Rogers sees operating costs as a major challenge, and has seen success in cost-cutting in part due to a safety committee, composed of Manchester employees, that is certified by the state and meets monthly to encourage safety in the workplace. This has helped lower the company’s insurance premiums by 15% over the last three years. Rogers will be marketing a full fleet management program to help the company achieve its sales growth goals.

A good buildup of back orders and a new inside sales methodology have Jack Norton, president of Warner Specialty Products (Cheshire, CT), anticipating a 5-10% increase in sales. The company spent money improving its Web site in 2007 which, coupled with new accounting and order-entry software being implemented in 2008, should further enhance sales. “Our business seems to be moving more toward customized solutions for customers,” Norton says. “I think that will continue.”

A similarly optimistic outlook is offered by Jim Dietz, general manager, National Lift Truck (Franklin Park, IL), who is looking at a broader product mix and new computer systems as reasons to expect a 10% sales elevation. The company opened multiple facilities in 2007 that “have room to grow more than the market will grow,” though Dietz cautions about the nature of business in a global marketplace. “The ability of end-users to go online and find hard-to-get items outside of their markets makes business much more complicated,” he says, adding that often customers are trying to sell equipment on their own, which he ends up competing against. “The global world has become smaller. One of our biggest issues is determining how to compete in this new marketplace.”

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