The Economic Lifespan of a Forklift

economic lifespan of a forklift
August 8, 2018
Posted by: Justin Engel

Forklifts are built with long-term durability in mind to withstand the challenging nature of most industrial applications. As a result, it is common for forklifts to remain serviceable and in operation for 10-20 years or more. While robustness is certainly a noteworthy attribute, the overall longevity of a forklift can create a number of issues when considered against the costs and reduced productivity associated with operating a lift truck past its economic life. These issues arise from the fact that, for every forklift, there comes a point where it costs more to maintain and operate than to buy a replacement. By replacing a forklift based upon its economic life, rather than its useful life, you’ll reduce your operating costs, improve your productivity and save money over the life of your equipment. But how do you determine the economic life of a forklift?

 

Total Operating Costs of a Forklift:

To understand the economic life of a forklift and how this impacts the replacement cycle, you first need to account for the total operating costs of a given unit. It is a common misconception that a majority of the costs associated with a forklift are contained within the initial purchase price. In fact, it’s been estimated that only 20% of the total operating costs over the life of a lift truck arise from its initial purchase price – the other 80% come in the form of maintenance, fuel and labour costs. Taken together, these costs represent the total operating cost of the forklift.

Obviously, during the early stages of ownership, the costs associated with the initial purchase price will dominate your total costs of ownership. During this time, however, maintenance costs remain low while efficiency, uptime and productivity offset the other costs. As time goes by, ownership costs fall as maintenance costs begin to rise.  At a certain point, the maintenance costs for an older forklift begin to rise exponentially as its resale value similarly decreases. This signals that it is time to find a replacement.

 

The Problem:

Many companies are reluctant to replace a forklift that’s still in good operating condition. Rather than replacing an aging forklift, they keep their lift trucks for years longer than they should, preferring to make repairs as issues arise instead of paying the upfront costs associated with purchasing a new unit. However, this type of thinking fails to taken into account the total costs of ownership and the hidden of maintaining a fleet of older forklifts.

From a maintenance perspective, retaining a forklift past its economic life often leads to paying more to maintain the forklift than it would cost to bring in an outright replacement. As forklifts age, major components are slowly worn out and, depending on the component, must be replaced at a significant cost. What’s more, older forklifts experience more frequent breakdowns with minor issues.

The maintenance issues associated with aging forklifts are also responsible for the second issue as companies often fail to take into account the hidden costs of lift truck ownership. For example, how much does it cost your business in lost productivity when your forklift experienced an hour? What’s the opportunity cost of operating a forklift that is 80% as efficient as a newer model? It shouldn’t come as a surprise to hear that older forklifts tend to be less productive and experience more downtime when compared to a brand new unit. This leads to a loss of income due to reduce productivity and should be taken into account when calculating the economic life of a forklift.

 

General Guidelines for Replacement:

Among the best ways to estimate when your forklifts should be replaced is to utilize the accepted operating hour ranges for a unit rather than its age alone. If your forklift is an internal combustion unit, downtime and maintenance costs begin to dramatically rise after the 10,000 hour mark. Electric forklifts tend to last longer since they have fewer moving parts and remain economical for 12,000 – 14,000 hours. These hour ranges, however, should only be used as a baseline as other factors must be considered.  For example, a forklift that’s operated exclusively in a clean, dry indoor facility will generally last longer than a forklift that’s operated in the temperature extremes and dirty environments encountered in outdoor applications.  Likewise, following a consistent and thorough maintenance schedule helps to prolong the expected economic lifetime of a forklift.  Finally, you should also consider how the forklift is used as prolonged multi-shift use and heavy lifting will prematurely wear even a well-maintained forklift.

 

The Value of Periodic Maintenance:

The economic lifespan of a forklift may be maximized by following a comprehensive periodic maintenance program. A proper periodic maintenance program follows the manufacturer’s recommended service intervals and regular inspections to reduce downtime, improve productivity and prevent excessive wear and tear. By taking a proactive approach to equipment maintenance, such a program can increase the economic life of a forklift by 1,000 – 2,000 hours in total and provide a greater return on investment upon resale.

 

In Closing:

At the end of the day, the primary focus of your business should be maximizing profitability, output and productivity. By utilizing a replacement schedule defined by the economic life of a forklift, rather than its serviceable life, you’ll be able to maximize the efficiency of your operation while having a positive impact on your bottom-line. For help determining when you should replace your forklifts and guidance throughout your replacement process, contact your local Stärke dealer today! Our dealers have access to the entire Stärke line of material handling equipment and will help you find a solution perfectly suited to your needs and application.

Author:

Justin Engel

Justin Engel is the marketing specialist at Stärke Material Handling Group. In addition to content development, he also handles graphic and website design, SEO, PR and strategic planning.

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