Bernard Chandra began his career at MLA Holdings, and has 24 years of forklift industry experience under his belt. Bernard is the national sales manager, and has been so for the last 12 years, and in 2006 added the role of alternative director to his resume.
The rate charged by a rental company for a forklift is such a small part of the total cost of running that forklift that it is almost irrelevant. On a 2.5 T I.C. truck, the rental rate will only be about 10% of the total running cost of the forklift (if you consider wages and on-costs).
Presume rental rate of $180 per week, fuel cost at $200, supervision at $70 and the cost of an operator at roughly $1, 350 and you have a total of $1,800 per week. That means the rental rate is only 10.0% of that total cost.
To reduce this total cost is extremely difficult as the reduction of the rental rate has little significance. A 10% reduction of the rental rate only reduces the total cost by 1.0%.
While it is difficult to reduce the total cost of the operation, it is possible to greatly improve the
productivity<.b> of the forklift and, consequently, improve the cost per hour by up to 33%, dramatically increasing value for money.
The productivity of the Forklift can be broken down into two parts.
1) The availability of the truck. The reliability of the truck and the promptness and quality of the service given by the provider can make a big difference to the availability of the truck over the life of the rental. Old or cheap trucks may be OK for the first year, and during this time the provider may be able to cope, but as the truck ages and parts are required urgently, not only can you expect constant minor problems, but it is also very likely some long protracted losses of the use of the truck will occur. Over the life of the truck, an availability of only 80% is not unusual. On the other hand, a quality truck backed by a reputable service organisation with a proper genuine spare parts holding will provide a much better availability and usability for the truck, therefore increasing productivity and subsequently making the user's money go further.
2) The work efficiency of the truck. This is its manoeuvrability, its lift and travel speeds and, most importantly, the ergonomics and comfort of the cockpit. Let's face it, the driver is operating this machine up to eight hours a day and if it is comfortable and easy to drive, there is no doubt he or she will want to do it that bit extra. On a late model quality machine compared with an old truck or one of the cheaper units, this extra productivity could be expected to be 10- 15% higher. Put it into perspective: if you are comfortable in your office and have the necessary modern equipment, don't you feel you are much more productive?
The worst case scenario is that the forklift's productivity will only be utilised about 70% of the time over its rental period.
In the previous example, this would mean a cost of $1,800 for 28 hours per week, or about $64 per hour.
With a modern truck and a reliable supplier, a 95% utilisation can be achievable.
This will include a slightly higher rental rate (say, an extra 10%) and 5% extra fuel because of the extra utilisation which will then equal a total cost of $1, 828 per week for an average of 38 hours. While the overall rate is slightly higher, if you look at the hourly rate (which is now $48 instead of $64), and an increased working time of 10 hours, you can see that you are, in fact, increasing your value for money. Of course, this is an extreme case - but these conditions can exist.