Despite the pervasive financial gloom, the current year for the UK materials handling industry was one of remarkable resilience and recovery from the nadir of 2009. Nowhere was this more marked than in the forklift industry, traditionally seen as a bellwether for the economy.
[button color=”red” link=”” target=””]*** READ THE Review of the Year ISSUE ***[/button]
Barloworld Handling, for example, reported greatly improved financial performance for the year ended September 2011 with a return to operating profits and double-digit sales growth. Among the articulated forklift producers the rebound was even more remarkable. Translift Bendi saw sales in 2010 back up to their peak levels of 2007 and double-digit growth so far this year on 2010, thanks partly to strong exports. MD Simon Brown is expecting strong growth next year barring some cataclysmic financial event, and is investing in production, sales and marketing accordingly.
Given the concerns over forklift costs generally, one of the persistent themes in the industry is the reluctance to ascribe more importance to truck life cycle costs than initial truck costs. This is a pity, because it means that many truck users are throwing money away. Toyota Materials Handling has identified the root of the problem possibly as the separate management within businesses for acquisition and operational running costs.
Another theme evident over the year is the desire for greater productivity. “Customers are constantly looking to achieve increased productivity as cost effectively as possible, and a multi-functional truck is one way to deliver this aim,” said Phil Pearson, Head of Marketing at Linde Materials Handling UK. To meet that aim, Linde launched its Citi truck early this year.
Whenever materials handling investment in an industry can show clear efficiency gains, then growth in that industry will continue irrespective of the economic climate. A good example of this is the strong growth in the pallet exchange networks. Pall-Ex, for example, is exporting the concept to Europe. Already in Iberia and Italy, they are planning to open up in Romania early in 2012 and are now looking to invest in Germany, France, Benelux countries, Turkey and Poland. The goal is to have a 15-strong European network by 2015. “This growth is something I see continuing in 2012, largely because we have not been afraid to push forward and seek opportunities,” says MD Adrian Russell.
In the automated materials handling sector the current economic climate will act as a catalyst for the installation of automated systems within distribution centres, though that is not to say that equipment suppliers are not seeing margins squeezed, says Vanderlande Industries. As over the last year, the driving force for this sector will be the unstoppable march of e-commerce. On the supply side, firms like SSI Schaeffer, Peem and Knapp continue to invest in more flexible hardware to allow their clients to integrate upgrades easily. As cyber shopping grows, the pressure to pick fast and accurately will grow, and only an automated approach can best handle that.
Going hand in hand with automated materials handling, warehouse management systems (WMS) have seen a good take up by large companies, especially in distribution centres. But SMEs still seem reluctant to move beyond a basic stock location programme, says Chess Logistics.
The loading bay area has seen some strong investments in distribution centres over the year, and rising distribution costs will continue to drive innovations and safety. Double-deck lorries, for example, can deliver 40% savings over single deckers. Poor load restraints and distribution and overloading, however, are serious safety issues, so existing technology/software for load weighing and distribution should attract rising investment.
Warehouse running costs and the need to meet environmental targets have attracted much attention over the year. According to UKWA’s report, Save Energy Cut Costs, the UK warehouse sector could cut annual energy costs by £200 million, mainly through improved lighting hardware and techniques and energy saving doors. Good growth prospects seem assured here.
So what of prospects for 2012? There is no denying that the great caveat hanging over the UK materials handling industry is the uncertainty over confidence in the global financial sector. Yet there are reasons to believe that the industry, and forklifts in particular, will be no worse than flat over the next 12 months, a view held by David Millett, Hoppecke Industrial Batteries’ Sales and Operations Director. Others, however, are more upbeat. David Cooper, MD of Cooper Specialised Handling, which is strong in container handling trucks, says, “as long ago as 12 months, 2012 was looking like a strong year, and nothing in the past year or even the uncertainty of the past three months seems to have changed this perspective. Our forecasts look strong.”
Big hitters in British manufacturing are also taking a more robust, long-term view by, for example, committing over £1 billion in the car industry, a phenomenon repeating itself in America on a much larger scale. Such investment will impact favourably on most aspects of the materials handling industry. Research also shows that for each worker hired directly by automakers, about seven other jobs are created as well.
There are other potent forces at work far beyond the scope of this review to mention, but one is worth touching on which suggests that the UK manufacturing sector has more to be optimistic than pessimistic. Natural calamities this year, rising costs in the Far East and fear of patent infringements are forcing global corporations to rethink their stretched, JIT-oriented supply chains. Such events have even affected specialist forklift manufacturers like Translift Bendi and Nexen, both of whom are now bringing back component sourcing or manufacturing to UK shores. Insurers will also be piling on the pressure for changes, as they seek to restore their losses in the Far East. Natural calamities in the first nine months of this year have caused US$259 billion in economic damage in the Far East, according to one insurance specialist. That adds up to 80% of all losses globally. There is nothing wrong with JIT-oriented global supply chains, provided certain ground rules are rigorously obeyed. One of those rules is to avoid placing all your component supply eggs in one basket, especially if you are exposed to natural disasters.
Warehouse & Logistics News