RM Online - What your customer needs to know about material handling

One of the largest areas of sales growth within the construction industry is material handling equipment of all shapes and sizes. In 1997 industry sales for backhoe loaders alone were the highest they had been in many, many years, according to Roger Huggard, product market analyst in construction equipment for New Holland North America, in New Holland, Pa. "Sales are also very strong this year."

The rental industry is a key market for construction equipment, especially material handling. And some key trends continue to mount. Let's take a look at some interesting market drivers.

In the last few years contractors have been turning more and more to their local rental businesses for material handling equipment, citing maintenance and productivity issues.

"Contractors have learned over the years that owning equipment can put them in a bind when it breaks down or gets old," says Baron Lyhne, Komatsu sales manager and a national account representative for Komatsu forklifts for dealer Theros Equipment, based in Lorton, Va.

"Construction rental owners stand to increase their rentals substantially in good times because contractors are increasingly renting rather than owning their equipment," he says.

More material handling equipment is being sold to rental yards, particularly loaders and forklifts. But rental companies are looking first at how their current inventory moves before adding more or different units.

For example, Huggard said skid-steer loader sales have really taken off recently due to the rise in popularity of the attachments that are available to make the skid-steer even more multiple job-oriented than ever. "Key attachments are backhoes, trenchers, pallet forks and buckets, but what all this boils down to is that one rental owner's skid-steer fleet is being utilized more often - it's not wasting unused time in the rental yard."

"Differentiation among models has reached the point of almost nothing," Lyhne said. "So what owners are doing is making a drive for productivity. Your staff has to know what the best equipment is for any given application."

In manufacturing and distribution - the major forklift markets - the more you can move, the better. Efficiency means productivity. Not all operators are equally proficient.

For the rental market, that has increasingly meant a trend toward more user-friendly equipment, such as manual transmission forklifts, which are easier for inexperienced operators to use, have better traction control and offer easier manipulation in tight locations.

"Internationally, manual forklifts outsell automatics, and we're starting to see a huge increase in the United States," Lyhne said. "From the standpoint of the rental store owner, maintenance is, as a rule, much easier."

If you have equipment that is easier to use, customers will come back to that brand. Although attention to safety issues goes hand-in-hand with construction rentals, OSHA is expected some year to finally come up with a ruling on operator training.

In 1995, several companies designed a program based on what is expected to be the OSHA standard, and rental owners stand to benefit from the training programs that most manufacturers offer as a result.

In-house productivity issues also have led to a huge trend toward installing automatic storage-retrieval systems in rental warehouses.

These devices, which basically pick up a product from a rack and bring it directly to you, are expected to be particularly hot for rental yards with lots of small items for rent, but there is potential for construction rental businesses to make them available for rent.

"These products minimize greatly the need for a lot of space to store rental items as well as the amount of labor needed," Lyhne said. "The item has been around internationally for years, but it's a trend that is just beginning to hit the United States now.

"You can't put a price on the time and labor savings of being able to punch a few buttons and get the inventory you need. It makes items easily accessible," Lyhne said.