 Steve Stewart, general manager of Powerlift Nissan, says profitability was the biggest issue affecting the forklift industry in 2007. |
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by Karen Harverson
Safety issues, new product launches, expansions and advanced technology dominated the news within the Australasian forklift, freight, logistics and warehousing industries during 2007 and Forkliftaction.com News kept readers up to date throughout the year.
Early in the year, Yale launched its rust-resistant forklifts for use in corrosive and sensitive work environments like food processing, pickling, tanning and salty conditions.
Advances in warehousing included the use of electronic wire guidance systems, and Forkliftaction.com News reported on a Melbourne family-run forklift company, Realfind Forklifts, that made the decision to install electronic wire guidance (EWG) systems as its core business, instead of dealing in forklifts.
EWG closes up warehouse aisles, increases storage and allows forklifts and turret trucks to travel at full speed without safety concerns as they are guided.
The construction of Australia’s first fully integrated radio frequency identification (RFID) forklift was completed in March 2007 by Peacock Bros, Intermec Inc, Alpha Warehouse Solutions and Cascade Australia.
The fully integrated RFID forklift was "the missing link" in RFID technology, obviating the need for drivers to leave forklift cabins to scan boxes by hand.
Also in March, Linde expanded its 39X internal combustion forklift range to include lifting requirements of 1.4 tonnes to two tonnes in the new 391 series.
Irish manufacturer Combilift joined forces with forklift distributor MHF Imports of Sydney, Australia to establish Combilift Australia.
Combilift Australia is a division of the importer which was established as Adapt-A-Lift Imports by Adapt-A-Lift Forklift Rentals and Sales (AAL) in 2002.
In April, Forkliftaction.com News reported that forklift hire and sales company Rentcorp was planning a $6.7 million expansion of its Sydney head office after buying a 5,035sq m block of land at Padstow, in Sydney.
Also in the news that month, freight and logistics giants Toll Holdings and Linfox signed a three-year rail deal speculated to generate more than $100 million a year.
Access equipment manufacturer JLG appointed Andrew Satterley as general manager for its Australia and New Zealand operations, and the company struck a deal with distributor United Equipment to deliver its line of European-built telehandlers to the Australian and New Zealand markets.
In May, Forkliftaction.com News reported on the new headquarters of Toyota Material Handling Australia (TMHA) at Moorebank, NSW, which was described as a benchmark facility for materials handling in the country.
Safety issues around forklifts remained a hot topic throughout the year, and serious injuries and fatalities related to the use of forklift trucks continued to plague the industry despite efforts to provide free education, tighten up licensing requirements, and prosecute companies which breach the law.
Over the next year, all states in Australia will introduce five-year renewable licences in place of the National Certificates of Competency (NCOC) which were, until recently, issued for life.
The new licences feature improved identification including photos, provision for a signature for the licence-holder and tamper-proof security.
There is no specific licensing requirement for pedestrian forklifts, which are excluded from the National Licensing Standard.
Forkliftaction.com News paid tribute to Barry Carter, author of Forklift Safety – Reducing the Risk, who died in Melbourne on February 6, aged 57. His publication is recognised globally as a standard reference point on how to operate a forklift safely.
Still on safety, risk management consultant Roger Kahler of the InterSafe Group called on the Australian government to recognise that it is the head of a management chain and, as such, has an awesome responsibility to collect, organise and disseminate information within the occupational health and safety arena in a transparent and easily accessible manner.
Kahler, who spoke at the Queensland Safety Conference in May, specialises in pattern analysis – the discipline of looking for common patterns among data and gaining insights as a result of those patterns.
A strong trend in 2007 was the emergence of forklift auctions moving online with buyers and sellers taking advantage of the 24-hour marketplace on sites like GraysOnline.
In June, we reported that Crown Lift Trucks had released a unique counterbalanced forklift for the Australian market, capable of being used in a variety of applications.
Dubbed the 'cross-over' vehicle, the RC 5500 Series can be used throughout a facility including loading and unloading trucks, transporting and staging products throughout the warehouse, as well as storing products in racks.
In July, New Zealand based Gough, Gough and Hamer announced it was opening a country-wide network of rental stores offering a diverse range of equipment, including forklifts, for the contracting and DIY market.
Global provider of container and heavy duty materials handling equipment, Kalmar, received a further straddle carrier order from Australia’s Patrick Corporation.
The order, for a total of 15 seventh generation straddle carriers for its container terminals in Melbourne and Sydney, is worth an estimated A$19 million.
Container trade through Sydney’s ports hit an all-time high, with preliminary trade figures for 2006/07 showing a 12% increase over last year.
Not to be outdone, the Port of Brisbane was reported to be Australia’s fastest-growing container port and a key driver of economic growth throughout the South East Queensland region.
In August, DSV Air & Sea Holding, a division of Danish transport and logistics services group DSV, established a new company in New Zealand under the name of DSV Air & Sea Limited.
Cascade Australia of Rocklea, Queensland, won a contract to supply paper roll clamps to a major Australian forklift company by December this year, for use by a large paper manufacturer's logistics and distribution provider.
In September, exclusive Australasian distributor of Mast Explorer forklifts, Calibre Material Handling (Calmat) of Hallam, Victoria, released its latest rough terrain model into the market. The H50DA 2WD model with automatic differential lock is the latest offering from the Spanish manufactured range of forklifts.
Also this month, the Supply Chain and Logistics Association of Australia (SCLAA) launched its New South Wales division.
Headed by Bill Henman of the College of Warehousing, the new division is in direct competition with rival organisation, NSW-based Logistics Association of Australia, from which the SCLAA originated.
Among the upcoming events planned by the SCLAA NSW is a forklift driving competition, which is open to all individuals and teams. "The major criteria will be safety, OHS knowledge, eye-hand coordination and driving skills," says Henman, adding that female operators will also be strongly encouraged to take part.
It wasn’t all good news: New Zealand's biggest port was brought to a virtual standstill in October after 265 dockworkers walked off the job in Auckland.
In November, Forkliftaction.com News reported on the financial difficulties besetting failed forklift sales and rental operation, Independent Forklift Services (IFS), which was placed under the administration of national insolvency firm PPB.
A few weeks later, we reported that another Australian forklift fleet operator, Budget Forklifts NSW, had been placed in voluntary administration. Smeaton Forklifts Pty Limited, which trades as Budget Forklifts NSW, is now under the administration of Peter Hillig of Smith Hancock.
In November, Australian-based Babcock & Brown Infrastructure (BBI) announced it had acquired 100% of two Finnish concession port operators for a combined value of A$144 million.
The following month BBI added a big port operator in the US to its growing list of shipping interests across the globe.
With business conditions at record levels and soaring profits the order of the day, the impending election did not seem to worry many players in the industry according to a snap poll by Forkliftaction.com News to canvass views about the potential impact of the different parties’ policies.
Also this month, Brambles’ CHEP division signed its biggest agreement in the Asia Pacific area to supply crates to Woolworths.
Looking ahead to 2008
In the words of John Strang, Chairman of ICHCA Australia Limited: "As Australia's economy continues to grow on the back of the amazing resources boom underway at present, the role that transport and cargo handling plays in the overall national effort has never been more apparent."
2007 saw a number of developments which impacted the freight industry including an increased focus on the environment and security measures and the increased market demand for total supply chain solutions.
Global forwarder DHL tells Forkliftaction.com News that the company is seeing an increasing demand from Australian importers seeking a total supply chain solution that includes international freight, warehousing and distribution services.
 Tony Boll, senior vice president for DHL Global Forwarding, South Pacific, says the shortage of skilled labour will be one of the major challenges to address in 2008. |
Tony Boll, senior vice president for DHL Global Forwarding, South Pacific, tells Forkliftaction.com News that customers in the freight market are looking for innovative companies with technology and new infrastructure that enable customers to reduce their costs and gain faster access to markets.
"In November, DGF opened a new purpose built facility at Brisbane Airport. It represents an investment of more than A$8 million and is more than 4,250 m2 in area. This building is green, has temperature controlled environments to handle end-to-end cool chain requirements and state-of-the-art security," adds Boll.
"Companies are focusing on innovations that set themselves apart from their competitors and move the industry forward as a whole. For example, DHL is ensuring that most cities are linked by air and ocean, and developing proactive shipment monitoring systems. These systems provide DHL clients with fast deliveries and complete transparency of shipment information across the supply chain."
According to Boll, the biggest opportunities in 2008 revolve around the fact that manufacturers are constantly looking for ways to remain competitive by looking for new markets, new products or cheaper production.
"The latter option often means moving manufacturing overseas, and there is a definite trend for companies to take advantage of cheaper labour and operating costs by manufacturing products in countries such as China and then importing to Australia and New Zealand for sale.
"Herein lies the opportunity for us, and though the growth for the air freight market appears to plateau, with improved technology for transporting perishables and reduced travel time, more customers are choosing to use ocean freight services instead."
While opportunities are perpetually evolving, so are the challenges; many of which are representative of greater infrastructural issues impacting the region’s economies, overall competitiveness and security obligations.
Many of Australia’s ports are unable to handle visits from "mega-ships" that service ports such as those in Hong Kong and Los Angeles. "This presents a challenge to importers and exporters, as many of the ports in Australia are serviced by "feeder vessels" which carry containers from larger ports that are able to service mega-vessels. Unfortunately, this results in both an increase in time and cost. However, Australian port authorities are continually investing in new ports to cope with larger vessels," says Boll.
He says that DGF will continue to invest in bricks and mortar at its Melbourne, Sydney and Auckland sites.
According to Boll, the freight industry faces a number of challenges for the year ahead, and these may impact DHL, including the high Australian dollar and the tightening of the Australian labour market.
The increasing Australian dollar is unattractive for exporters and is making exports more expensive but imports less costly. DHL continues to improve the flow of goods in line with its objective to be a trade facilitator.
The second challenge DHL will have to address in the year ahead is the shortage of skilled labour due to the tight labour market across Australia.
"Since returning to Australia in 1984, I’ve witnessed many major changes in the industry. Globally, DHL now has logistics facilities in 3,000 locations in over 220 countries and 160,000 people servicing global customers.
"Seeing new markets develop has been a fascinating and educational experience. The emergence of China and India as strong importing and exporting countries and the introduction and development of Free Trade Agreements have been key developments that have driven and pushed trade forward, especially with the US and New Zealand," he concludes.
Industry changes include:
• Re-engineering of Customs Clearance processes
• Increased security requirements and quarantine requirements both locally and overseas
• Increased environmental awareness. Globally, DHL has developed ‘go green’ initiatives to reduce environmental impacts.
Forklift supplier Powerlift Nissan says profitability was the biggest issue which impacted on the industry in 2007.
According to general manager Steve Stewart, "With many of the forklift suppliers being factory owned (unlike us) they are under pressure to supply volume to the factory (generally an overseas manufacturer) with what appears to be little regard to actually making money locally.
"Purchase and rental prices have plummeted to an all time low and the only winner has been the customer. Due to the volume of new trucks flooding the market, there is an oversupply of second-hand/ex-rental machines available and the value of these units is suffering accordingly.
"The recent forced liquidation of smaller independent forklift companies will continue as they try to compete with the bigger players and end up with rental machines still under finance back in their yards with an unrealistic residual position attached to them which often forces them to sell them at a loss or sit on the unit until the market recovers."
Looking ahead to 2008, Stewart urges the industry to take a good hard look at itself and start trying to achieve reasonable margins for machines that are quicker, safer and more advanced than ever before.
"If the current trend continues, we will eventually have companies paying customers to take their trucks! This situation is not healthy for the customers either, as forklift companies start compromising on their service or try and claw back some margin during the rental period by charging the customer excessively for damage or excess hour usage.
"Generally most forklift suppliers offer good quality products and services but have become so obsessed with market share that they have ignored the fact that people are prepared to pay for this service."
Stewart notes that there is an even bigger swing towards customers going for fully maintained rental deals.
"The market is becoming more aware of environmental issues and looking for machines that are more efficient, cleaner running, productive and use less fuel. Safety remains a major factor in the purchase decision and OH&S personnel are becoming more involved in the decision-making process."
He tells Forkliftaction.com News that the biggest opportunity is for the industry to wake up to itself and start charging a fair and reasonable price for their equipment and services.
"If you’re confident your products will add value to a customer’s operation, then be confident enough to ask for a reasonable amount of money to provide the service and don’t just take the soft option of dropping your price.
"We will continue to see forklift companies struggling to make any money at a local level unless a change in attitude sweeps the industry and it starts to become profit-focused rather than volume-focused. I know many companies are doing it tough, but very few will admit it publicly."
Stewart notes that another challenge for the industry in 2008 will be how it will attract and retain young professionals in sales, accounting, technical and administrative roles.
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