Whether your business involves hazardous chemical storage or some other type of material handling, how do you determine when it’s time to replace your forklift or forklift fleet?
Many experts will tell you that there are maybe three general methods for deciding when its time retire lift trucks and other hazardous chemical storage equipment that are based on the concept of optimal economic life. While the life expectancy if properly maintained may reach or even exceed 20,000 hours of use, the maintenance expenses and downtime for repairs will typically justify replacement of aging forklifts long before the 20,000 hour milestone. Typically, electric units may need to be replaced every 12,000 to 14,000 hours. Internal combustion powered units may need to be replaced every 10,000 to 11,000 hours, depending on the specific application and the total annual usage.
One common approach is to replace material handling equipment based on a predetermined number of months or years of service. If you are leasing your equipment, this approach makes a lot of sense in that you need to decide whether to replace your forklift or entire fleet at the end of each lease.
A second approach often used is to replace material handling equipment at a predetermined number of operating hours. Many hazardous chemical storage companies use 10,000 hours as a rule of thumb for replacing their lift trucks. However, you need to have a thorough understanding of operating conditions and utilization patterns under which your equipment is used to know whether your equipment needs to be replaced well before the 10,000 hour mark, or if it makes sense to extend your usage to 12,000 hours or more. In some cases the severity of the operating conditions (temperature extremes, exposure to salts, brine or other corrosives, dusty environments, etc.) can and will shorten a vehicle’s useful life. If your fleet is in use by multiple shifts daily and are routinely lifting loads near their maximum weight capacity, your replacement schedule may need to be accelerated. Simply requiring that each vehicle’s vital fluids be checked at the start of each shift can prolong the economic life of your lift trucks’ by as much as 2,000 hours. Similarly, having your hazardous chemical storage equipment on a schedule for routine maintenance will also extend its useful life.
A third approach is based on cost/value analysis. In general, this method calls for replacing hazardous chemical storage equipment when its annual maintenance costs meet or exceed its replacement cost, or more typically when its annual maintenance cost meets or exceeds the resale value of the equipment. Keeping a material handling asset in front-line service beyond this point may subject you to higher operating costs per hour and reduced productivity. The key to this approach is having complete, accurate data. You need to know your annual maintenance cost per unit vs. its resale value, or the average monthly maintenance cost vs. the monthly payment on a new lift truck. Larger fleets may benefit from the use of fleet management systems to aid in the collection, tracking and reporting of the information needed to identify when it’s time to replace equipment. If you only have a small number of lift trucks, you may be able to use a manual system to collect and enter the necessary data in a spreadsheet, however, that takes time and discipline to gather and process the information.
Keeping hazardous chemical storage equipment in frontline service until the wheels literally fall off doesn’t make sense. When FW was smaller, the firm often took this approach and being frugal in the short run didn’t necessarily pay off in the long run. There just comes a point when old trucks start nickel and diming the company to death with continual repairs, downtime and the additional expense of renting trucks to keep operation running. As FW replaced and expanded their fleet as they’ve grown, FW has moved to a cost/value approach where they’re tracking annual maintenance cost vs. resale value. It takes a little extra effort to track the maintenance costs on a unit by unit basis, but it gives a much more accurate method of determining when to cycle old units out of frontline service in order to keep productivity high and costs low for hazardous chemical storage.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Kansas City, Indianapolis and St. Louis totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include contract warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage, product distribution and B2B and B2C fulfillment.
FW Warehousing has more than 50 years of experience in third-party 3PL logistics and has been ranked in the top 100 Third Party Logistic Companies in the country by Inbound Logistics magazine.
For more information about FW Warehousing’s capabilities, visit the Hazardous Chemical Storage page on the FW Warehousing website.