From COVID to “Lead Time” Pandemic!
As the world recovers from the turbulent years of 2020 and 2021, we are seeing all sorts of repercussions across different sectors of the economy. As the Vaccines acceptance became more widespread and the COVID deaths began to decrease around the globe the world started to wake up and demand for items skyrocketed. In the Lift Truck Industry 2021 started stronger than anyone planned – and it didn’t let up. Some thought it was a catch up Blip – orders simply making up for the drop a year earlier – but we have more than eclipsed that drop now. All Time Record order intake in the first and second quarter of the year by virtually ALL forklift manufacturers put intense strain on the Supply Chain and some parts manufacturers simply could not meet the growing demand.
Lack of inventory and record long lead times in the MHI
Lead times started to move out in the 2nd quarter – and they moved out even more in the 3rd quarter – and then pricing started to rise. Multiple factors across the global economy such as low production in the factories, shortage in inventory, increased freight and part costs resulted in price increases that were announced from virtually every Fork Lift Manufacturer. Logistic / freight surcharges were also introduced as a response for the first time in over a decade to help cover the increasing global supply chains cost. Container pricing tripled or quadrupled in some routes.
According to the Industrial Truck Association’s data, the MHE order backlog is bigger than ever in 2022. Lead times have grown from the normal (pre-pandemic) 20–30 weeks to 20, and in some extreme cases up to 30, months. Long waiting lists have been reported by potential customers of Toyota, Crown, Raymond, and HYG. Some OEM dealers stopped taking orders in early 2021!
New Lift truck lead times before the pandemic averaged 10-16 weeks – while I write this in Apr 2022 those same trucks are now 32-45 weeks before delivery and some are over a year. Virtually ALL Lift truck manufacturers are in the same lead time range – no one appears to have been spared. And this is not limited to just Lift truck Manufacturers – Aerial Lift Companies such as Skyjack, Genie and JLG are also feeling the pain of a broken supply chain with lead times uncertain and in some cases over a Year!
The supply side – radical growth in Europe predicted
Political sentiment is the main driver of the lithium-ion battery market in China and Europe. In both regions, the battery market reflects the government's energy strategy. China's domestic oil reserves are small, so it must be imported in large quantities. Thus, the desire for energy security explains much of the motivation for developing battery technology. As far as Europe is concerned, the EU has enacted legislation to bind the group to ambitious emissions reductions. Again, this is a strong driver of battery investment. Reuters reported that higher oil prices - another byproduct of the conflict in Ukraine - could offset rising electric forklift battery costs. The analysis predicts that the average price of electric forklift batteries in 2022 will be 40% higher than in 2021, mainly due to rising prices of nickel, lithium, and other materials. Industry demand for lithium iron phosphate (LFP) batteries.
Lithium batteries can help energize sales for forklift dealers
Industry experts do not expect “stability” in the supply chain any time soon. Pre-pandemic lead times are not coming back before 2024. In the meantime, many companies are running for longer hours and putting more stress on their forklift batteries, especially in the logistics and 3PL industry. Lead-acid batteries in many applications will not last until the end of the lease term, creating a very real risk that operation disruptions and downtime will spiral out of control. Customers are deterred by difficulties in procuring maintenance, and replacements may take years to arrive.
The following are the solutions that forklift dealers can offer to their customers in 2022–2023 by adopting BSLBATT lithium batteries:
At the end of the lease (or with the visible decline of uptime and increasing maintenance labor costs), lead-acid batteries can be swapped to lithium to keep up operations. This step will improve performance, not just sustain it. When the new trucks finally arrive, the same lithium batteries can be used to power the new equipment.
The lack of new forklifts to replace equipment reaching the end of its life can be mitigated with the rental model. Advanced lithium batteries with modern data capabilities and triple the lifetime of lead-acid batteries provide dealers with an opportunity to develop an attractive and profitable price model.
A better battery is just the start
Today forklift dealers have a chance to help their clients with a very practical solution, while at the same time improving their position in the fast-growing lithium segment of industrial batteries. Practical knowledge and experience with the new lithium technology will continue to drive sales for the years to come. Its IoT connectivity introduces a wealth of possibilities for equipment uptime, operator safety, fleet optimization, and energy savings. Power guaranteed is possible in material handling. Meet the gold standard in MHE battery for hard-working Class I, II, and III forklifts.
For more information on our lithium-ion battery insights, please contact us at firstname.lastname@example.org://www.lithiumforkliftbattery.com/forklift-batteries.html