How much does a forklift really cost?

As Australian manufacturers face increased pressure from global competition, the requirements to work more efficiently and cut day-to-day running costs have never been greater.

However, for those in the market for new capital equipment, it is all too easy to select the cheapest model available to meet your production requirements, without thinking about the extra costs you may bear over the lifecycle of the unit.

In the case of forklifts, you could be forgiven for assuming that once you settle your invoice, you only need worry about paying-off your finance and footing the odd service bill down the track. But in many cases, the capital outlay for a forklift can actually be the most inexpensive part of owning the unit.

The forklift equation

Internal combustion (IC) forklifts are commonly used in Australia today. While electric units are rising in popularity, they are still considered ‘high reach’ by some buyers, and are often found in the fast-moving consumer goods (FMCG) sectors, such as food and beverage and pharmaceuticals.

At the outset, IC forklifts are generally cheaper to purchase than their electric counterparts. However, if you take in to account the costs associated with owning and running an IC forklift over its lifecycle – such as the fuel required to run the unit – opting for an electric model can actually end up saving you a great deal of money in the long-run.

Take, for example, a manufacturer running a standard, 2,500kg IC forklift, for around 25 hours per week. The machine will average five hours of uptime from an exchange bottle, at a cost of around $38 a bottle. Based on 25 hours per week of operation, our manufacturer would run through five bottles per week for 48 weeks per year – and this cycle would continue for around five years before they’d be on the market for a replacement.

During this time, the cost to the manufacturer for fuel alone would reach a staggering $45,600. (And this is calculated at today’s average fuel rate; but how much is the price of fuel likely to have risen by 2019?)

Of course, service and maintenance costs also need to be added to the equation. Since the average cost of servicing and maintaining an IC forklift today is around $1.67 per hour*, over five years means our manufacturer will also be paying $10,020 to keep the machine in good running order.

Let’s say the manufacturer has purchased a $30,000 forklift; to keep it running for five years they will pay an extra $55,620 on top of the original $30,000. All up, the total cost to own and run the unit for those five years – assuming it is undergoing regular maintenance and is not damaged during the period – comes to a grand total of a whopping $85,620.

No doubt, many manufacturers are spending more than they bargained for when purchasing IC forklifts. Is it time you looked at an alternative?

You do the maths

In recent years, considerable investment has been made in the areas of research and development for electric forklifts. These models have many benefits over standard IC units – beyond running costs alone.

New electric models on the market incorporate sophisticated alternating current (AC) operating systems, rendering their performance comparable to – if not better than – standard IC units.

Running time has been extended to allow for full-shift operation without charging, and batteries now come in either single-point watering or smart-charger options, helping to maximize battery life. While the units are approximately 20% more expensive to buy than IC models, customers can enjoy 28-32% cheaper repairs and maintenance, in return for their capital investment.

And of course, without having to fork-out for fuel, the most prevalent ongoing cost associated with running an electric unit is only around $6 per night required to charge the forklift battery.

So, if our manufacturer went with a comparable electric option costing $38,100, over a five-year period they’d be paying only $7,140 for maintenance, and only $7,200 for battery charging, totaling a much more respectable $52,440 to own and run the machine over for the entire five-year lifecycle. That is a saving of a little over 40% when compared to an equal-class IC model.

Of course, there are some jobs and applications for which an IC forklift is better-suited. However, it’s definitely worth considering the above figures next time you’re in the market for a forklift; choosing electric just may prove to be a smart, long-term solution to help improve your business’s bottom line health – not to mention the health of the environment and your workers, too.

To book a free, on-site forklift cost analysis, click here, or call Lencrow on 1300 536 276.

*Based on current costing for Lencrow hire fleet maintenance.

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