FORKLIFTS – Lease Vs Buy: What is Best for Your Business?

The decision whether to purchase, lease or rent forklifts depends on the particulars of the application and company preferences.

Forklifts are expensive. In fact, next to employees, they could be your largest expense. Your job is to look for ways to measure those costs accurately and reduce them.  With financial tools becoming more and more sophisticated and material handling equipment (forklifts) becoming increasingly complex it might be time to rethink the way you “purchase” your machines.  Is there a way to reduce the costs of your material handling equipment through leasing?

In a perfect world, if a forklift were idle the cost of it would be zero; if working, the cost of a forklift would be like paying an employee, e.g., $10/hour. Tie the COST to the WORK. Pay for USE. Essentially, that is what leasing or renting should do. Or at least it should get you closer to that ideal.  

Renting a forklift

Renting and leasing are almost the same. Rentals are usually short term, a few weeks or months. One advantage to renting is that you can experiment with a machine.  If you are not sure of the dealer’s response time to breakdowns, rent something for a few months and see how they respond to mechanical issues.  That experience can help you assess their capabilities.  Not sure if this “different” machine will be more productive?  Rent it for a few months and measure it against your existing forklifts.  Want to try a new method of picking?  Set up a temporary model and rent the appropriate equipment.  Use rentals to test your hypotheses.  

Peak periods are another reason to rent. Perhaps from September to December, you build up your business for the Christmas rush. To match this volume increase over this short term you may need to increase your fleet of forklifts. Return the rentals in December and save the cost of those machines for the next three-quarters of the year. Renting equipment increases your flexibility.

Renting is usually more expensive.  The extra cost of a unit pays for the machines that sit idle but available (in the dealer’s warehouse waiting to be rented).  Another reason rentals cost more is because the cost of maintenance is included in the monthly rental fee.  

The biggest difference between leasing and renting is that, when renting, you probably lose the option to purchase the machine.  A rental machine usually must be returned to the dealer.        

Leasing a forklift

Monthly leasing payments can vary from place to place. On an average, you may have to pay around $600 per month to have a forklift that cost around $25k. Monthly lease payment can be around $1100 for a forklift that costs around $50k. (That does not usually include the cost of maintenance.)

Positives Of Leasing

  • Lower Initial Costs: You can acquire an expensive machine without paying 100% of the cost upfront.
  • Increased Productivity: New machines every 3-5 years will ensure that downtime is reduced and the forklifts should be working at peak efficiency.  As labor is your highest cost it is important to get the most out of your employees. (Cost of labor is $10+/hour vs $1+/hour for your forklift).  Good tools should make more efficient workers.   
  • Cost Closely Matches Use: By spreading the cost out over 3-5 years the work done with the forklift matches the monthly lease and maintenance costs to get that work done.  It should help with budgeting.
  • Testing As You Purchase: Leasing allows you to test the machine without committing to a purchase.  Use the forklift for 3-5 years and, if it works reliably, and isn’t too well used, there is a provision to purchase it at the end of lease term.  Or return it.
  • Always Have The Latest Technology Updated Equipment:  With leasing, you get the opportunity to replace the forklift with the latest technology, updating your equipment at regular intervals. This is a strategy to keep technologically competitive in the marketplace and increase the performance of your business.
  • Tax-Advantage: In most states in the U.S. leasing is a 100% tax deductible operational expense. (Check your own state or provincial tax rules.)
  • Maintenance Cost Can Be Part Of Monthly Lease Price: It is common for the leasing company or dealer to offer maintenance packages to add to the lease payment.  This added cost will depend on the environment (e.g. cold storage maintenance costs are higher). The benefit is that you can account for it by paying one price per month.

Negatives of Leasing

  • Higher Long-term Cost: If you decide to exercise your option to purchase at the end of a term you may ultimately pay more than financing the initial purchase price of the machine. You are paying a premium (like an insurance policy) for the option of sending it back with no obligation. The dealer is taking on that risk.
  • Penalty for Over Use – the lease usually includes a clause to cover the number of hours that you intend to put on the machine. Like a car lease, if you go over that, there is a penalty. (Sometimes, if you stay with the manufacturer that penalty can be negotiated or covered in the new lease.)   
  • You Don’t Have An Asset: When you purchase a forklift outright, you can use it to borrow against, resell it, etc. But in the case of leasing, you can’t sell because you are not the owner of the machine.
  • The Possibility Of Poor Maintenance Service By The Leasing Company: As the maintenance is often up to the dealer/manufacturer or the leasing company, it may prove to be difficult to get things fixed in a timely manner. Before leasing, it is important to do your due diligence – understand the supplier’s capabilities and reputation, investigate references, etc. It may require you to include a spare machine in the contract to cover unintended downtime.

 

Buying A Forklift

Depending on your requirements purchasing could make more sense than leasing/renting. If for example, you need a machine to work one hour a week, leasing might not make sense. Purchase a used machine. Likewise, purchasing might be the best option if: 

  • there is no intention of changing the use and a machine will last 20 years
  • you have the cash to purchase, or you need the asset on your books as capital equipment
  • your bank has this inexpensive line of credit for you to use
  • or your owner simply prefers to own all capital equipment.

 Each company has their own unique policies and ways of looking at this decision.

Final Decision: Rent, Lease or Buy

More and more companies, including the majority of the Fortune Five Hundred in North America, are leasing forklifts instead of purchasing. From a budgeting standpoint, it is important to match costs with revenues. From a productivity standpoint, turning over your fleet every five years means you have newer and, therefore, more reliable machines.   Bringing in rental equipment when the demand is temporary could make good economic sense.  Leasing gives you the opportunity to keep up with new technology.  In this rapidly changing world, sometimes there is a need to retract your business.  Leasing could accommodate that.  If there is a need to radically change the way you are doing things, leasing might accommodate that.  

Every company has different needs. However, if you are not leasing now, and you have a fleet of machines, I would encourage you to consider this option. Purchasing might still be your best option but to be sure work through the benefits of leasing.

At least that’s my two cents.

 

Dan Beer has consulted on material handling and warehouse equipment along with related safety programs for 30 + years, serving companies including  Amazon, Starbucks, and Best Buy, among others. Dan can be contacted at danwbeer@gmail.com.  

This article first appeared in 2018.

Achieve Operational Cost Savings With an Optimal Balance Between Productivity and Fuel Consumption

forklift fuel consumption vs productivityHyster Europe has done extensive analysis using data from telematics which offers insight into ways to reduce the cost per tonne moved. The overall conclusion is that productivity has a greater impact on Total Cost of Operation (TCO) compared to minimizing fuel consumption. While Hyster® Container Handlers offer one of the lowest fuel consumption rates, this has been achieved without compromising productivity.
“Better productivity has a greater impact on the cost per container moved,” states Chris van de Werdt, Product Strategy Manager EMEA Big Trucks for Hyster Europe. “Fuel savings are good to have when they are not affecting productivity, as they are also a small percentage of the cost of running a machine.”

The company estimates that typically for the European and US market (excluding the tire costs) just 16% of the total cost to run a ReachStacker, for example, is the fuel cost. 20% is maintenance costs, 20% is depreciation and a full 44% is operational costs, including the driver.

“Our approach to fuel savings has always been about the best balance to support busy operations,” says Chris. “Tests we have conducted indicated that the Hyster® ReachStacker can be up to 12% more productive than a comparable product.”

“Real-life testing shows that 12% more containers can be moved per truck per hour in many operations, which quickly adds up. Excellent power response and productivity is often much better for operations with seasonal peaks and tight timescales when they need to push harder,” claims Chris.

“Hyster Europe offers fast, responsive machines that can help keep drivers fresh and productive,” he says. “Slow machines can lead to complaints, poor staff retention, and an inefficient operation, despite marginal savings at the fuel pump.”

Hyster has always been at the forefront of fuel-saving technologies particularly during the launch of its Stage IV Big Truck range.

“We were the first to bring huge fuel savings to the market, but we did not compromise on productivity,” he says.  “As we launch our Stage V range, the fuel savings are significant, but the productivity is exceptional, making this the best balance for operations who want to make real financial savings.”

For more information about the range of Hyster® Stage V Big Trucks, visit www.hyster.eu.

Lifting America: The Economic Impact of Industrial Truck Manufacturers, Distributors and Dealers

Demand for forklifts, other industrial trucks, and associated services exists in every state throughout the US. While data on units produced, sold, and imported is readily available, an analysis of the economic contribution that industrial truck manufacturing makes to the US economy and individual states has not previously been undertaken. To address this, the Industrial Truck Association commissioned Oxford Economics to conduct research, analysis, and impact modeling to clearly quantify the economic contribution of industrial truck manufacturing and its support services in the US. This report highlights the importance of the industry to the US economy in terms of jobs, wages, tax revenue, and GDP.

The report from the Industrial Truck Association (ITA) and Oxford Economics offers detailed data at national and state levels. Click here to view the full report.

FLTA addresses latest queries from public

As the leading UK authority on forklift matters, the Fork Lift Truck Association is often the go-to place for members of the public with pressing lift truck queries.

Tim Waples forklift questionsWhile a library of informative fact sheets is available on fork-truck.org.uk with detailed answers to many of the most common questions, Tim Waples, FLTA CEO has responded to some of the recent questions received by the Association.

Forklifts on public roads

If someone is crossing a side street on a forklift to travel from one department to another: Do they need to register the forklift? Does it require taxing? How far can they travel before having to register?

“The issue of forklifts on public streets is one the Association is regularly asked about. All mechanically propelled vehicles need to be registered and taxed under the Vehicle Excise and Registration Act 1994.

“As to how they are taxed: forklifts are taxed based on their means of propulsion as well as their weight.

“Any electric trucks are taxed in the Electric Vehicle class.

“A forklift with a revenue weight up to 3500kg comes under the Private/Light Goods taxation class.

“A forklift with a revenue weight exceeding 3500kg (provided it is designed for use on private premises) can be classed as a work truck. It can be used on the road to carry goods between the premises and a nearby vehicle.

“Distances exceeding 1000 yards on a public road will require the vehicle to be taxed in the HGV taxation class. Distances under 1000 yards do not require registration for road use but be aware of the requirements for insurance in case the truck is involved in an accident.”

Forklift finance

Is there a way of finding out if a forklift has finance still owing on it?

“Unfortunately, only trucks registered with the DVLA can be HPI checked. However, Investec Materials Handling Finance — one of our members — can carry out a check on your behalf using their systems and at their absolute discretion.  If you wish them to do this for you, please contact them on 0330 123 2017 and ask for any of the following members of the team: Jon Hussey, Stacey West or Leanne Kirkwood. They will require as much detail as possible on the machine such as make, model, year of manufacture, serial number etc.”

Second-hand guards

If you fit a second-hand overhead guard, would this need to be tested?

“Provided that the guard is undamaged, unmodified (including holes drilled for fixtures added post manufacture), is an original guard, fitted to the original mounts, with genuine fixtures and is from a machine of the same brand, model and capacity, it should not be necessary to subject it to testing. It will be up to you, or your engineer, as a competent person, to ultimately determine the integrity of the repaired machine.”

Power pallet trucks

What training is required to operate a Powered Pallet Truck?

Does a powered pallet truck require an annual LOLER inspection or is it only servicing that is required/advised?

“Regarding training for power pallet trucks: Regulation 9 of the Provision and Use of Work Equipment Regulations 1998 (PUWER) states that an employer must provide adequate training for all persons using work equipment — and this includes powered pallet trucks. It also specifies that the training must cover how the machine is used, the risks involved, and detail the precautions to be taken.

“It is also essential for you to maintain up-to-date risk assessments and training records, and to ensure that adequate refresher training is provided, especially if there is a change of machinery or the application has been subject to changes. Please do not assume that there is no legal requirement to provide formal training — there most certainly is.

“The HSE has recently updated its Approved Code of Practice to clarify that LOLER applies to high-lift pallet trucks (both manual and powered) that have the ability to raise the forks above 300mm. The ACoP can be downloaded free of charge from the HSE’s website.”

Summing up, Tim said “It’s always good to see how many non-Members know to come to us for guidance on forklift matters. The Association’s wealth of knowledge and reputation as the experts is well established. We’re always looking to expand our archive of information and keep it up-to-date, so the more we’re asked the better our resources become.

Steel King Announces Durable, Engineered Drive-In Pallet Rack Systems

Allows users to store up to 75% more pallets than with selective pallet racking

Drive in racking, Steel King

Steel King Industries, Inc., a leading manufacturer of material handling products and systems for improving operational efficiency, announces the availability of its Drive-In Rack Systems. Drive-In and Drive-Through Racking delivers cost-effective storage in high-density storage applications.

Requiring fewer aisles and providing better cube utilization than selective racks, drive-in and drive-thru racking allows users to store up to 75% more pallets than with selective racking. Forklifts drive directly into the rack, allowing storage of two or more pallets deep. Flared drive-in support rails helps forklift drivers enter the pallet rack by guiding the pallet into the bay. A Drive-In pallet rack system uses the same entry and exit point for each storage bay, providing last in, first out (LIFO) access. A Drive-Thru pallet rack system is loaded on one side and unloaded from the other for first in, first out flow (FIFO).

Drive in racking, Steel King

Because they are often used in high turnover areas and operated in close proximity to forklift traffic, drive-in, and drive-thru racks are subject to greater wear and tear than other rack structures. Steel King’s drive-in rack system is engineered and manufactured to better stand up to this wear, making it the market leader among drive-in racking systems.

Steel King’s drive-in racking features unlimited storage depth and is ideal for high-traffic and cooler/freezer installations. Additionally, Steel King offers an optional offset leg design for easier handling of pallets. The welded frame construction delivers high rigidity and strength, while other optional features, like protective railings and seismic-safe designs, deliver even greater safety and stability in demanding applications.

Advantages:

  • Maximum pallet storage
  • Virtually unlimited depth of storage
  • Limited aisles, resulting in more efficient use of space
  • Load rails constructed of durable structural angle steel
  • Flared rail entry ends allow easy bay access
  • Space saver, low-profile arms
  • Custom-designed for your pallets & forklifts
  • Cost-effective storage strategy
  • Welded aisle-side load arms and rail stops

For more information about Steel King and Drive-In Rack Systems, visit https://www.steelking.com/products/drive-in-drive-through-rack/

Walk This Way: Pedestrian Safety In Forklift Operations

Forklift warning lights

Every year, more than 68,400 forklift accidents take place in the United States. Far too many of them injure pedestrians. The National Institute for Occupational Safety and Health (NIOSH) report reveals that nearly 20 percent of all forklift accidents involve pedestrians being struck by the forklifts. With proper awareness and pedestrian safety training, the rate of accidents can be significantly reduced.

Having formal forklift training is an OSHA requirement. While OSHA does not specially address forklift pedestrian training, the OSHA General Duty Clause instructs companies to take all the precautionary steps to protect all employees. This includes ensuring that workers who are exposed to forklifts and lift trucks in operation receive the instruction necessary to preserve their safety on the job.

Very often, warehouse managers do not realize the significance of training pedestrians exposed to any kind of lifting operation. When the pedestrian is ignorant of basic safety precautions around lift trucks, the chances of an accident involving the forklift and pedestrian increase.

Common Forklift/Pedestrian Accident Situations

Following are two common situations accidents involving pedestrians and forklifts take place:
Pedestrian Came Too Close To Lift Trucks  There is no way a collision involving a pedestrian can take place if the pedestrian does not come within close proximity of a forklift. Maintaining at least a 4-foot safety zone is highly recommended when the forklift is running. This precaution can lessen the risk of the lift truck driving over the pedestrian’s foot.

But the actual safety zone can be much longer than just 4 feet. In the employee or pedestrian awareness programs, companies should let the pedestrians know that the back end of lift trucks can swing very quickly to the side. Normally, forklifts that come with elevated forks necessitate proportionately higher safety clearance. The horizontal length of a load is another important consideration. A long load like a 20-foot long lumber package will need a proper safety clearance especially when the lift truck turns.
Pedestrian Did Not Notice The Lift Truck In Operation  In many cases, pedestrians don’t see the lift truck in operation. Blind corners and varying degrees of intersections can be reasons for not seeing the lift truck. So, pedestrians should be aware of those to be safe from accidents. Pedestrians may not hear the lift truck in operation as different power sources of forklifts determine the sound generated in operation. For instance, electric battery powered lift trucks can be very quiet, the internal combustion lift trucks can be very loud. So, if not well-aware of different sounds generated by different forklifts, a pedestrian might equate a lack of noise with the absence of a lift truck in operation.

Ways To Increase Pedestrian Safety In Forklift Operations

The frequency of forklift accidents involving pedestrians can be significantly reduced by providing awareness training, using the right safety equipment and better traffic management.

Training and Awareness for Pedestrians  Proper pedestrian awareness and training should not take much time and effort. First of all, pedestrians need to be aware of the fact that lift trucks can suddenly appear around blind corners. The training can work as a reminder to the pedestrian to stop, listen and look carefully when working or staying around the blind corners. Pedestrians should always expect the sudden appearance of a lift truck.

Before crossing a forklift’s path, a pedestrian must maintain eye contact with the forklift driver. When the eye contact is not possible or difficult like when crossing the path behind the forklift, giving the driver a verbal alert is mandatory. Alertness and communication are crucial. When crossing behind a forklift that may back up, be sure to make verbal communication with the operator before crossing, or to wait at a safe distance until it has finished backing up.

Other important safety rules that need to be included in pedestrian training and awareness programs include never riding on a forklift truck unless the vehicle is specially designed to accommodate a passenger, keeping clear of a forklift and loading swing radius. Never walk under a load.

Traffic Management  Safety professionals recommend the creation of separate routes for pedestrians made easily noticeable through painted lines and signage. Having physical barriers to keep forklifts from entering pedestrian-only routes can be a very effective solution. If having physical barriers is difficult or not possible, avoiding forklift use in areas with high levels of pedestrian activity can be a good solution. Having and maintaining safety rules for both pedestrians and lift trucks are very important.

Safety Equipment  Safety best practices dictate that pedestrians should wear a highly visible vest step for improving visibility. Having and using forklift truck horns, adding warning lights, or travel alarms are good measures as well. The use of convex mirrors at intersections can improve pedestrian safety by providing the pedestrians with better chances of seeing the forklifts in operation.

Conclusion

While the training of forklift operators is mandatory, facility operators are also required to protect the safety of pedestrians who traverse in proximity to material handling equipment. Take care to consider the safety of pedestrians who might not be obvious such as sales, maintenance or clerical personnel, supplier representatives or contractors working at the site.

Note: The information provided above is intended only to provide general guidance. For specific regulatory requirements in your jurisdiction, please contact a local safety professional or appropriate compliance professional. 

Forklift Safety Tips Infographic

A forklift is an essential piece of equipment in any warehouse, distribution center or factory. Without it, it would be nearly impossible to efficiently move heavy objects in these environments. The strength and versatility of lift trucks certainly make life easier for the people who work in most industrial settings. However, the power that forklifts provide must be used with a great deal of responsibility.

Because forklifts are heavy machines designed for lifting and carrying large and bulky loads, the potential for danger is high. In fact, nearly 20,000 people are injured each year as a result of accidents involving forklifts. The good news is most, if not all, of these injuries can be prevented.

Knowing how to operate a forklift safely is critically important for any worker who uses one. Operators must be aware of their surroundings, loads and behaviors. For example, they must never allow anyone to stand or ride on the blades of the lift. It’s also crucial that they always check underneath the forks before lowering their cargo.

Take a look at this infographic for vital safety tips to remember when operating a forklift. Share it with your team to remind them about their responsibilities when they’re behind the wheel of a lift truck.

Download the Equipment Depot Forklift Safety Infographic

 

Infographic created by Equipment Depot

Forklift safety a high priority this Christmas

Businesses which use forklifts are being warned to lift their game as the retail sector moves to stock stores in time for Christmas following a number of tragic incidents in recent months.

SafeWork NSW Executive Director Tony Williams said rushing to get goods out the door, poor safety systems and fatigue with workers on the job for more hours are all factors which can lead to tragedy.

“The lead up to the holiday season is the busiest time of the year in distribution centres, warehouses and loading docks and we have too many incidents under active investigation involving forklifts,” Mr Williams said.

“In one incident a 41-year old lost his life having been crushed when his forklift overturned, and in another incident a 27-year old female factory worker suffered massive internal injuries to her abdomen when a forklift crashed into equipment she was operating. In yet another case a 29-year old male required surgery to a foot after the forklift struck him.

“SafeWork inspectors visited more than 180 businesses in March this year and it was disappointing to see more than 90 Improvement Notices handed out for unsafe work practices.”

From July 2014 to July 2016, more than 1,300 workers were injured in forklift incidents costing the NSW workers compensation system more than $30 million. Tragically this also included three fatalities.

SafeWork recommends a number of simple steps employers and workers could take to make this Christmas season a safe one:

  • Employers must ensure that only licenced workers operate the forklift and that they are used only for their intended purpose.
  • Physical fences or barriers or clearly defined walkways should be in place to ensure a separation as the two don’t mix.
  • Forklift speeds should be kept as low as possible which can be achieved by fitting speed limiters or sensors which automatically adjust the forklift’s speed.
  • Workers should never be lifted on the forklift tynes or on pallets – they should only be lifted with a forklift truck in an approved work box.
  • And when parking a forklift, make sure the brakes are on, that it is turned off and key removed.

For further information on forklift safety, visit www.safework.nsw.gov.au

Steel King Announces Products to Extend the Life of Rack Systems

Safety and protection products guard against forklift damage and protect rack system investment

Steel Guard racking protector from Steel King

Guard Dawg, Steel King

Guard Dawg from Steel King

Steel King Industries, Inc., a leading manufacturer of material handling systems for improving operational efficiency, announces the availability of several products that can help reduce maintenance costs and extend the life of rack systems. The company’s safety and protection rack enforcement products include: Snap-Guard® and Column Core®, and its guardrail products include: Steel Guard®, Armor Guard®, Guard Dawg®, and Mega Guard®. By utilizing these products, companies can protect the investment made in pallet rack systems and ensure safe usage over time.

Steel King’s SK Snap-Guard is an adjustable rack column protector for boltless racks that protects the upright rack column from forklift damage. Snap-Guard is constructed of structural angle and features an exclusive 4-rivet connection that automatically locks into the upright column. Adjustable, removable and flexible, Snap-Guard can be used to protect each storage level.

Column Core is a unique C-shaped column reinforcement that doubles the impact resistance of Steel King’s SK2000 boltless pallet rack. With Column Core, the boltless pallet rack system retains full beam adjustability but reduced puncturing, buckling, and torsional twisting without additional installation costs.

The Steel Guard and Armor Guard guard rails protect people, products, and the physical plant from collisions. They feature a modular design that makes expansion or relocation easy, and effectively separate workstations and walkways from shop traffic. The guardrail systems feature universal posts with connection holes on three sides for added design flexibility.

With a bright industrial yellow paint finish and anchored to the floor, Guard Dawg is a highly visible and effective end-of-aisle protector for the prevention of fork truck-incurred damage. Its low-profile rack protection design makes it ideal for use at intersections and along high traffic routes.

Steel King’s Mega Guard is an all welded steel protector designed to help keep forklift trucks and other in-plant vehicles from damaging facilities and equipment, all while protecting employees. Mega Guard acts as both a visual and physical barrier against costly damage, downtime, and injury.

Steel King also carries a full line of safety accessories including Safety Gates, which can be ordered as part of a new installation or retrofitted into an existing system. The gates are self-closing and include a hinge assembly on one side of the gate and two gate stops on the opposite side, for hanging in either direction.

For more information on safety and protection products, visit www.steelking.com.

How much is your pallet rack really costing you?

Hint: It may be more than the initial purchase cost

Steel King racking

When shopping for pallet rack, buyers may find options in the market that, on the surface, seem quite similar, but a savvy buyer will find that with all that is riding on a pallet rack decision, doing one’s homework up front can pay dividends in the end. From the warehouse environment to the steel gauge to the “recipe” of the steel itself, the true cost of a pallet rack over the life of the system can be difficult to determine.

While the dimensions of the rack components certainly contribute to a rack’s capacity rating, many factors can adversely affect its performance and long-term cost. “It is all about price – pay upon initial purchase or pay much more later to upgrade a sub-standard system to meet requirements,” according to Raymond Weber, Eastern Regional Manager at Steel King.

The dimensions and gauge of steel are not the only measures of rack quality. When comparing two seemingly identical rack systems, for example, 3-inch columns of the same gauge of steel, there can be profound capacity differences that can lead to frequent repair/replace situations.

Rack structure considerations:

  • How much bracing is designed into the system? Inadequate bracing will affect both capacity and impact resistance.
  • How much weld surface connects your uprights and braces? Frames are only as impact resistant as the welds that hold them.
  • Are upright columns a fully closed tube design or the common open-back configuration? A closed tubular column can withstand far more impact.

“Steel King’s SK2000 roll-form pallet rack system is designed with a closed tubular design throughout – uprights, beams and bracing, giving the rack a 250% increase in front-impact strength and 68% increase in the side-impact strength when compared to common open-back systems,” according to Weber.

“This leads to a reduction in damage in the event of a collision and a far less likelihood of rack collapse and product loss or worker harm,” Weber adds.

Once a load-bearing component of a rack has been damaged, its capacity is reduced, increasing risk. Since replacement parts and labor often cost far more than parts in the original rack system, a lower-cost rack will often require large investments in maintenance and repair. And it’s not just the cost of the repair itself.

“Workflow disruption and downtime during rack replacement is a cost that few companies take into account when assessing the cost of the rack, but it’s a very quantifiable budget item,” says Weber.

Quality of steel

Not all steel is alike, and there can be considerable differences in strength. Steel is an alloy of iron and carbon, with the flexibility of having other elements “alloyed” into it. Steel made in the U.S. is carefully regulated and will have mill certification that it’s been manufactured using the correct mix of metals for optimal performance. Imported steel does not carry that same certification and assurance, and can often contain other elements or contaminants that diminish strength.

Special applications – cold storage and seismic zones

While all rack applications run the risk of collision or improper loading, some warehouse environments cause even greater wear and tear on rack systems.

Cold storage applications can be particularly brutal. Food and pharmaceutical inventories are time-sensitive. Products are moved through and the stock is rotating far more frequently than other products, making these facilities high traffic areas.

To reduce the cost of refrigeration, facilities opt for denser product storage, and fork trucks have to navigate narrower aisles, increasing the chance of collisions.

Cold storage facilities are harsh work environments for workers as well. Bundled in cold- weather gear, drivers operating in 0-55°F facilities are often in a hurry to get in and get out, which can also affect their level of precision. In addition, the slippery conditions of blast freezers can contribute to the vulnerability of racking.

Seismic zones

Since a pallet rack is classified as a building element, it, therefore, must be permitted as such. Increasingly, building codes require that pallet racks meet seismic standards. In practical terms, this means that pallet rack systems must be strong and durable enough to withstand seismic forces.

Pallet rack systems built from “stock” components often do not meet these rigorous building codes. High-quality racking can be customized and built to meet the load rating capacity to withstand tremors. Thoroughly researching the applicable codes and permitting requirements in your municipality ahead of time can save a lot of cost and headache.

Retrofitting a budget system to bring it up to code is not advised. The Rack Manufacturers Institute (RMI) warns against adding products from one manufacturer to the rack of another, “Mixing of products from various manufacturers may cause fit and/or function issues and may void the original equipment warranty. The beam-to-column connection properties are of vital importance in the proper structural analysis of the rack system.”

Avoiding unseen costs

When evaluating the purchase of a pallet rack system, it’s important to look for the hidden costs that can dramatically increase the Total Cost of Ownership (TCO) over the lifetime of the rack. Making sure that the purchased system can endure the environment for which it’s intended can far exceed the initial investment in terms of safety, maintenance and operation costs.

Since forklift impact is inevitable and underreported, rack systems should be inspected regularly, and maintenance performed promptly, in order to mitigate dangers and keep large-scale maintenance costs low.

A reputable rack design firm will also take into consideration the storage environment and workflow. By installing options such as oversized base plates, reinforced columns where rack may be impact-susceptible, a majority of serious damage can be prevented upfront.

An investment in post protectors, end of row guards, safety guard rail, or other accessories will also contribute to the long-term durability and cost savings of your pallet rack system.

“Ultimately, even though they may cost more up front, pallet rack systems that are built better from the beginning can save on costs throughout the lifetime of a pallet rack system,” says Weber.

 

Steel King is the nation’s only single-source manufacturer of pallet racks, drive-in rack, flow rack, pushback rack, pick modules, mezzanines, cantilever racks, portable racks, industrial containers, custom shipping racks, and industrial safety guard railing.

Source: Steel King