Because forklift fleet management is a top 10 spend in your budget, and inherently an inflationary category, it’s essential to optimise fleet performance in order to rein in costs. While often overlooked, a well-managed fleet doesn’t just enhance your operation’s productivity, it also minimises unexpected expenses that will quickly erode your bottom line. 

As businesses continue to grapple with rising costs and fluctuating economic conditions, addressing pitfalls and taking proactive measures for fleet management can help you reduce total cost of ownership while improving overall fleet performance. 

Here are the most overlooked – and preventable – forklift fleet expenses and how to avoid them:

1. Relying on piecemeal solutions – The “do it yourself” approach to forklift fleet management is an invitation to overspend. Trying to manage multiple suppliers, contracts and equipment manufacturers sourcing on your own, can lead to costly inefficiencies, unforeseen expenses as well as safety and compliance problems.

2.Using data that isn’t fully transparent and actionable – Your program needs a centralised database that offers 100% visibility into asset-level costs and utilisation data. Reliable enterprise-wide data is the key to lowering total cost of ownership. Buying or leasing equipment is a very small portion of the overall cost of your forklift fleet. 

You need to effectively leverage a vast volume of data to make informed decisions on things like equipment replacement, redeployment, refurbishing, disposal and much more. 

Your data should give you a snapshot of your equipment’s economic useful life, helping you make informed decisions on your spend, strategy and next steps.

3. Difficulty in “rightsizing” your fleet – Without actionable data, it’s easy to deploy too much equipment at any given time. Using telematics and trustworthy data, you can extend the service life of forklifts and power sources, significantly lowering operating costs.

4. Lack of an informed maintenance strategy – It’s not unusual to see more than two-thirds of overall spend go to maintenance – this is a major area of spend but it can be minimised with the right strategy. It’s important to have a well thought-out and systemised maintenance program in place - from establishing preventive maintenance best practices to conducting remote diagnostics, and managing multiple maintenance suppliers across the enterprise. 

Even more critical is to ensure that the program is taking into account the economic and operational useful life of your assets, and which are beyond their prime. 

Understanding the performance of your assets from this perspective will enable you to make operational decisions that greatly impact your overall spend and maintenance plan. Assets that are past their economic and operational life, and outdated, can lead to spiralling maintenance costs and operational challenges.

5. Allowing downtime to just “happen” – There is nothing more disruptive to operations than equipment that is out of service. You can prevent expensive downtime by implementing proactive life cycle management.

6.  Inadequate safety and compliance programs – By implementing daily per-shift safety checklists and telematics you can help prevent costly accidents and avoid OSHA compliance violations.

7. Inability to retain good employees – The most common complaint from facility employees is that equipment is constantly breaking down or creating an unsafe environment. You can help eliminate employee turnover and keep morale high by providing reliable equipment so your associates can hit their productivity KPIs. 

It’s important to create a rewards program for operators with outstanding safety records, such as paid time off or gift cards celebrating their success. This helps foster a company culture where safety is valued and rewarded.

8. Failure to appoint a spending ambassador– The Harvard Business Review recently chronicled how one leading healthcare company achieved USD$300 million in savings by appointing a “spending czar” empowered to break down corporate silos and make better company-wide spending decisions. 

This role complements that of a fleet manager, who oversees vehicle usage, optimises maintenance, and ensures efficient deployment across the organisation. Similarly, a spending ambassador can identify inefficiencies in spending, streamline processes, and foster a culture of accountability. 

There’s likely someone within your organisation who possesses the ideal skill set for this role – someone who not only excels at managing budgets but also drives initiatives that improve overall financial health.

9. Not taking advantage of financing options – The value of used equipment is at an all-time high—around 50% of the cost of new equipment. You can take advantage of that high value by selling it to a leasing company for its market value, then leasing it for the duration you still need it. This approach allows you to leverage leasing to your advantage and align the lease term with the economic useful life of each asset. 

Additionally, with fair market value leasing, you’re essentially only paying for about 75% of the asset cost. Don’t let sunk cost sink you; instead, strategically manage your assets to optimise your financial position.

Inflation is slowing, but it’s still a real concern for all businesses. It’s vitally important to extend fleet equipment longevity and improve performance across your enterprise. 

With better visibility into your spending and utilisation you can generate 15%+ category cost savings, identifying opportunities to enhance efficiency and reduce unnecessary expenses. 

That’s much easier to do when you have a fleet management strategy in place - one that is ready to scale and is based on expertise to reduce complexity and cost.