Combining New and Used Forklifts in Your Industrial Material Handling Fleet
As much as any warehouse fleet manager would be thrilled to have all new forklifts in their fleet, there are plenty of reasons why having a mix of new and used equipment is better in the long run. From the perspective of an existing business considering fleetwide replacement of their lifts, we often find that the cost of doing so tends to surpass performance gains and operational savings quickly. And from the perspective of new warehouses outfitting their first fleet, here again we find that considering a mix of new and used lifts can offer greater payback in the right conditions. For these reasons, we’d urge both new and existing material handling centers to weigh their options between new and used lifts with cost and payback in mind.
Clearly, new forklifts have major benefits: maximum performance, advanced technologies, minimum maintenance demands, and full warranty coverage. This makes new forklifts the right choice for mission-critical and specialty applications where reliability is paramount. Used forklifts can offer equally positive benefits for more infrequent, routine tasks that can tolerate a little inefficiency in exchange for operational cost savings. When combined, new and used forklifts can make a warehouse fleet more adaptable, less costly, and more manageable overall.
To be more specific, here are the main reasons why businesses pursue a mixed forklift fleet for their industrial material handling operations:
- Capital Allocation – by purchasing new and used forklifts, businesses can reduce overall capital costs and better allocate cashflows (especially when factoring in lease and financing fees).
- Tax Depreciation – mixing new and used forklifts flattens out the fleet’s depreciation curve, taking advantage of both new and used tax incentives and bonus depreciation.
- Rolling Replacement Cycles – with a mixed fleet, businesses can roll through lower replacement expenditures over time, replacing a unit or two at a time as they see fit.
- Training – another benefit of a rolling replacement cycle is that a business’ training burden is reduced, especially when older lifts are purchased for their simplicity and low-tech nature.
- Flexibility – mixed fleets tend to span a greater range of capabilities and performance, allowing greater flexibility across the fleet than an all new, single model fleet.
- Risk Management – while an all new, vendor-maintained fleet has many values, there is risk of concentrating models and reliance on one OEM that can be mitigated by blending in used lifts.
Weighing the Value of New and Used Forklifts Within a Fleet
While the concept of a combined forklift fleet is easy to understand, the process of structuring such a fleet takes a little more technical evaluation oriented specifically at your business. Your warehouse’s size, operating schedule, movement volumes, product distribution, and other key details all bear on the decision, as do commercial considerations such as free cashflow and operating margin targets.
The goal of performing this evaluation is to decide how many of each new and used lift types you should aim for, as well as what replacement cycle makes the most sense. As an example of the goal: “for a forklift fleet of 40 lift trucks, we’ll acquire 30 new lifts with narrow-aisle, high-bay capabilities, 10 used standard sit-down lifts for outdoor yard picks and seasonal peaks, and a rolling replacement cycle of one lift every 3 years.” (The standard rolling replacement cycle is defined as moving a new lift into a used lift spot, selling the deprecated used lift, and acquiring a new lift to backfill.)
To come up with your own fleet structure, here are the most common roles that both new and used lifts serve in a mixed fleet:
Where New Forklifts Excel
- Heavy Duty, Multi-Shift Operations where reliability is crucial and downtime is not tolerable.
- High Density, Pedestrian-Heavy, or Similar Special Environments where advanced telematics and operator-assist safety features are required.
- High Energy Efficiency Applications where new battery technologies and rapid charging are important.
- Maintenance-Sensitive Areas such as 24/7 shipping docks or core racking areas that would be substantially disrupted in the event of a forklift problem.
- Standardized and/or Automated Applications such as the highest-volume parts of a warehouse needing extreme consistency, especially where automated processes and equipment are used.
Where Used Forklifts Excel
- Low Volume, Single Shift Operations where equipment is not heavily utilized.
- Seasonal, Temporary, or Swing Operations that can tap into used forklifts when needed at a lower cost than having new forklifts otherwise sit idle awaiting demand peaks.
- Specialty Applications that need a unique forklift or forklift attachment infrequently and at low risk (such as for carpet rolls or drum lifting).
- Secondary Operations where it’s desirable to keep operating and capital purchase costs at a minimum.
- Workhorse Applications where buyers can get “more lift” for their money buying used, such as for getting an oversized, 4×4, all-terrain lift for infrequent very large loads.
As we can see, both new and used lifts have their ideal places in a mixed fleet, and together can bring a beneficial balance to a business’ equipment costs and effectiveness. When a mixed fleet is structured appropriately, enough new lifts will be acquired to provide core reliability and performance, and enough used lifts will shore up lower risk, lower cost needs. Over time, a mixed fleet is best managed to an operating cost target, further balancing new equipment purchases with used equipment sales (and maintenance costs too).
Visualizing How a Mixed Forklift Fleet is Configured
Borrowed directly from our own customer pool, here are three examples of how a mixed forklift fleet can be structured:
Example 1: High-Volume Distribution Center, 24/7 Operation
- Summary: This business is a major distribution center that designed their mixed fleet around reliability and raw throughput, with used lifts selected to lower the cost of dock operations.
- 90% New Electric Lifts for core pick-place functions.
- 10% Used Propane Lifts for unloading off-spec trailers in the yard using mobile ramps safely in any weather.
Example 2: Mid-Sized Manufacturing, 16/5 Operation
- Summary: This customer runs a two-shift plant that scales production volumes with demand, and selected their mixed fleet based on cost-conscious scalability given how variable their customers’ demand can be.
- 50% New Electric Forklifts to cover baseline production volumes and shipping activities.
- 30% Used Electric Forklifts for scaling up with demand (at a low equipment and maintenance cost).
- 20% Used Specialty Electric Forklifts with special fixed attachments and oversized capacities to handle custom orders and special material deliveries.
Example 3: Local Building Materials Distributor, 8/5 Operation
- Summary: Lastly, this local building material distributor operates out of a low-pile covered storage area and large outdoor yard, selecting their mixed forklift fleet makeup for the highest durability at the lowest operating cost.
- 40% New Propane Forklifts for all covered loading activity.
- 30% Used Diesel Forklifts for all outdoor yard activity where lifts are subjected to heavy wear and weather.
- 10% Used Specialty Propane Forklifts for double-pallet and truss-boom attachments.
- 20% Rental Used Forklifts to cover overflow work and seasonal construction booms at a lower cost than purchasing lifts outright.