Warehouses hum with activity as forklifts shuttle back and forth, yet some units remain idle—silent drains on operational budgets. During economic booms, such inefficiencies might be overlooked, but when markets cool, every dollar demands scrutiny. The North American forklift market, after reaching sales peaks last year, now faces economic headwinds. The solution? Embracing intelligent fleet management to optimize resources.
The Warning Signs
Industry experts note that despite early signs of economic softening in late 2018, many companies maintained bloated forklift fleets as if still riding the wave of rapid growth. This approach carries significant risks during downturns.
"The economy can't sustain high growth forever—cooling is inevitable," warns John Rosenberger, Director of iWarehouse Gateway and Global Telematics at Raymond Corp.
Brian Markison, North American Sales Director at UniCarriers Americas, observed slowing growth in the latter half of 2018. While annual figures remained positive, the 14% first-half growth rate dropped by 9 percentage points in the second half. He anticipates 2019 will still be strong for forklift sales but cautions businesses to prepare for potential economic cooling.
The Telematics Imperative
Kevin Paramore, Sales and Marketing Manager for Power and Telematics at Yale Materials Handling Corp., highlights how many companies manage forklift fleets less rigorously than labor costs. During prosperous times, cost control often takes a backseat until economic pressures force closer examination.
"Telematics adoption will continue growing because it removes the blindfold from decision-making," Paramore explains. While the technology has become essential for many businesses over the past three years, those considering adoption purely as a recession response might find the timing less advantageous.
Markison acknowledges customer hesitation but emphasizes the long-term value: "Even if 2019 performs well, there's still time to gather 12-24 months of valuable cost trend data—that's a smart investment."
Proactive Fleet Optimization
Rosenberger warns companies ignoring economic risks face potential shocks. Many fleet management solutions fall under operational rather than capital expenditures, making them particularly valuable when profitability declines.
"The era of managing modern warehouses through visual inspections is over," Rosenberger states. "Judging operations simply by whether forklifts look busy doesn't work in today's fast-moving environments."
The key to weathering economic slowdown lies in proactive measures. Tighter markets demand greater efficiency, requiring optimal workforce utilization to minimize losses. Companies with telematics systems can implement data-driven strategies, though executing more radical recommendations sometimes proves challenging.
"You must trust your data, even when analysis reveals gray areas," Rosenberger advises. "If you discover five excess forklifts but only remove two initially, plan carefully for the remaining three."
Strategic Fleet Adjustments
Options include renegotiating leases, buyouts, or transitioning excess units to service models where dealers provide equipment as needed. Contract maintenance can prevent major breakdowns while balancing costs.
Paramore stresses telematics helps establish fleet parameters for both boom and bust cycles: "Determine your baseline minimum and maximum equipment needs. Many clients initially claim they need more trucks because they're 'always busy,' but data often reveals better utilization opportunities."
Telemetrics can identify concurrent usage patterns—for example, a 20-unit fleet might average 12 simultaneous users, peaking at 15, yet data may show five units never being used together. Trial-and-error remains valid for matching leases to utilization patterns.
Linking Costs to Productivity
Jim Gaskell, Global Director of Technology and Business Development at Crown Equipment, notes forklifts enable warehouse material flow: "While operations track product movement extensively, fleet management reveals how forklifts facilitate that flow."
At enterprise levels, telematics helps mitigate recession impacts by identifying underutilized equipment for transfer between facilities. While leased equipment can be returned or parked, Gaskell emphasizes fleet management optimizes these decisions.
"Companies are assessing recession duration because no one wants to be unprepared during recovery," Gaskell observes, noting few businesses with confirmed underutilization actually return leased equipment.
Market fluctuations affect fleets unevenly. Specialized equipment like milk-run forklifts experience different impacts, where adjustments might create operational ripple effects. Telematics provides insights into whether cutting specific models would harm overall performance.
Operator Considerations
Markison recommends leveraging lease terms while identifying cost-efficient equipment. Telematics simplifies tracking operating hours versus output, but any lease professional can negotiate favorable terms based on utilization changes.
"Extending leases by six months often costs less in interest than lease payments," Markison suggests. "The original lease options remain intact."
Fleet changes inevitably affect operators. Data helps identify top performers for retention during workforce adjustments. "You want to keep your best operators and let the 'cowboys' go first," Markison concludes.