Chain of Thought

Lift Truck Cost Pie in for a Re-Bake

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One of the most difficult components to price on a lift truck is the operator. This occurred to me after exchanging e-mails with Scott Friedman last week. He's CEO of Seegrid, makers of systems that are turning pallet trucks into vision-guided robotic vehicles. He asked if I ever saw a chart that breaks down the cost of a lift truck. I told him I remember seeing something that did that but it was quite a while back.

Eventually he found what he was looking for and shared it with me. In this breakdown of “typical lift truck costs,” maintenance and purchasing were two of the bigger pieces of the pie, together accounting for almost half of it. Fuel & insurance and disposition were slivers. By far the biggest chunk was “Operator Cost,” which constituted almost half of the pie.

That's pretty huge, I thought, but Friedman thought it was even bigger than this—closer to 70 or 80%. You might expect someone who sells robotic systems to think this way. But we traded ideas on what could be included in this nebulous “Operator Cost” category. A few things came immediately to my mind: hiring, training, medical, and the cost of losing and then re-hiring and re-training.

He agreed, and said that these factors are probably left out of most operator cost calculations. In fact, he said, because there has been no alternative to operators for so long, no one has done a thorough job in quantifying the costs around operators.

In MH&L's June issue, we mention automated lift trucks as a relatively new factor in the U.S. lift truck market. Established players like Raymond, Linde, Toyota and Crown are starting to introduce products in this category. Friedman gave his rationale for this:

“Due to high wages and labor laws that very much favor the worker, the thinking is that almost any amount of money is worth it to permanently eliminate an operator resource in a facility.”

He added that one of his U.S. dealers did his own calculation with a customer. They found that on a cash basis, even if a robotic truck were priced at $300,000 it would still pull less money out of an operational budget on a week by week basis than one worker.

Of course that would depend on the size of your fleet. Still, at a time when fleet managers are starting to look at making new investments, potential game changers like fuel cells, 3D safety sensors, and yes, even automation, will start to change how the industrial vehicle cost pie is carved up. The operator costs category may soon be a sliver of its former self. How much of a sliver depends on the economy and on you. Let us know if you have an appetite for what's cooking in industrial trucks.

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