Examine running costs
August 1st 2010

Buying lift trucks at low rental prices can result in escalating costs over the contract period warns Simon Emery,md of UK operations for Crown Lift Trucks

In a bid to reduce costs and gain an advantage, many manufacturers have been tempted to offer ridiculously low rental prices to secure contracts – often at cost and sometimes below. But there is no such thing as a free lunch.

Manufacturers simply cannot supply trucks for nothing. So how do they do it? One way is by increasing costs elsewhere which will come to fruition over the term of the contract. These 'stealth' costs – usually consisting of highly profitable repair work after damage to the truck has occurred from driver error or abuse – negate any cost savings which the customer receives up front.

Today many procurement departments are incentivised to reduce costs. The greater the saving the higher these incentives can be. This generates too high a focus on the weekly rental price, when there needs to be greater emphasis on the overall running costs. There is often a disconnect between the procurement department and the operations who once a contract is signed find that they have to manage the ongoing running costs – and therefore repair bills. Ultimately, customers are missing the true cost of running a fleet over a typical five year contract.

Many manufacturers take advantage of this fact and exploit customers through highly profitable repairs and parts. This isn't to say that manufacturers are making repairs unduly. After all, the trucks have been damaged by the customer. The trouble is that more and more manufacturers are using plastic over metal in a bid to reduce production costs. Yet such parts break more easily and repairs are needed more often. Consequently the true TCO bears no relation to the highly competitive rental charge the customer was given in the first place.

By looking at the true TCO of each manufacturer it becomes much clearer which manufacturers are offering genuine savings to customers. The quality and longevity of the materials used in the build of each truck is a significant area which is being overlooked.

We're proud of the fact that we use more metal in our trucks than many other manufacturers. Crown manufactures around 85% of its own components – where other manufacturers utilise a higher percentage of bought-in parts. The result is a range of trucks which offer true cost savings by virtue of the commonality of its parts and components and equipment that can take the harshest treatment received in today's modern materials handling environment.

Take powered pallet trucks as an example.We've seen fleets of powered pallet trucks that need to have the battery covers, tiller arms and side panels replaced four or five times over the contract hire period simply because these parts are made from plastic and break more easily. Not so with Crown.

On our WP 2300 powered pallet trucks, which come with a life time chassis warranty, these parts are made from 8mm heavy gauge steel throughout. This results in a truck which stands up to the knocks and bumps of arduous applications and internal components which are protected properly.

Crown is also helping customers deal with the problem of truck abuse with its innovative fleet management system – InfoLink. Crown InfoLink is a fleet management system which can operate using existing wireless systems and display results in real-time. The system identifies trucks and operators within a facility and provides real-time alerts when truck impacts occur.

Customers can also see where and how their trucks are being used and whether it's possible to reduce the number of trucks in a fleet. It also identifies any bottle-necks and whether it would be more efficient for the fleet to be increased.

InfoLink monitors and communicates a huge amount of truck and fleet usage information, but it delivers it in a user friendly, easy to understand way.

By using FleetStats, Crown is able to provide customers with such a vast array of information on what the true operational costs are within their business, they can even see their damage bills for each truck as and when an impact occurs and before they've been invoiced. Truck abuse is significantly reduced or done away with altogether.

Another significant proportion of the TCO is made up of servicing costs and downtime.Many manufacturers lack component commonality from one model to the next resulting in a lack of service parity across their ranges. Crown has a different approach.

Every Crown truck – from powered pallet trucks to low level order pickers, electric counterbalance trucks to VNA turret trucks – shares the same InfoPoint System and Access 123 Comprehensive System Control providing industry-leading diagnostics through an intuitive method of communication.

When one of our service engineers arrives onsite he can quickly determine the problem through the truck's display panel using our innovative Access 123 System – no time is wasted by having to plug in a computer and perform various system checks. Our modular Access 123 technology allows for system diagnostics and calibration, coupled with a service and parts manual which is seen in the industry as one of the most user friendly, ensures servicing is quick and cost effective with minimal downtime.When it's time for your fleet renewal, ask about the true TCO.

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