The pros and cons of using batteries and internal combustion engines to power lift trucks.
What do customers want? This was the question that led the staff of The MHEDA Journal to analyze the end-user market for forklifts. Do end-users know the differences among trucks? Do they care how their forklifts are powered? What are their buying preferences?
The articles below and on the pages that follow are the result of conversations The MHEDA Journal had with industry experts by telephone, email and social media about these topics. Industry experts we spoke to in some cases asked not to be named. We encourage comments about these issues in the online version of this article at www.TheMhedaJournal.org.
Forklifts: What Are the Options?
Forklift power sources run the gamut from gasoline, diesel, liquid propane (LP) and compressed natural gas internal combustion (IC) engines to lead-acid and lithium-ion batteries and hydrogen and methanol fuel cells. Electrics are predominant among Classes I, II and III, while IC trucks are more common in Classes IV and V.
According to the Industrial Truck Association (ITA), electric trucks made up about 63 percent of total new truck sales in 2010, with IC accounting for the other 37 percent. The traditional lead-acid battery is still the number one non-IC power source. Lithium-ion batteries have been developed for the forklift market, but estimates put the cost at five to seven times the cost of a traditional lead-acid battery. Even with a higher depth of discharge, lack of watering and comparable performance, that’s too much of an expense for widescale adoption at this point, according to Jeff Long, vice president of sales and service at EnerSys. The market share for lead-acid is so high that for the purposes of this analysis, when we refer to electric trucks, we’re referring to lead-acid batteries.
Within the IC market, about 600,000 forklifts in the United States operate on LP fuel. Roughly 90 percent of all IC trucks are powered by propane because LP has less-caustic emissions and can be refilled onsite very quickly. “An eight-gallon propane tank usually allows for an entire eight-hour shift of operation without refueling,” says Brian Feehan, vice president of the Washington, D.C.- based Propane Education and Research Council. “That makes propane a common choice both inside and outside of warehouses.” Diesel- and gasoline-powered trucks are common in rough outdoor applications, such as ports and lumberyards that require higher horsepower.
That means that the two dominant power sources in the current North American market are lead-acid batteries and liquid propane.
|Propane||Abundant domestic supply||Byproduct of natural gas drilling, a controversial issue|
|Consistent power throughout shift||Emits odor|
|One tank per shift||Typically requires delivery service|
|Can be used indoors and outdoors|
|Diesel/Gasoline||Readily available||Questionable future supply|
|Consistent power throughout shift||Requires more maintenance than electrics|
|Good for heavy-duty applications||Not recommended for indoor use|
|Familiarity with product||Difficulty and cost of oil and fluid disposal|
|Battery||Less maintenance required||Higher up-front expense|
|No harmful emissions||Takes time to reach top speed|
|Quiet||Performance can wane as battery is used|
|Can be used both indoors and out||Not recommended for some outdoor applications|
|Fuel Cells||No emissions||Expensive to implement|
|Short refueling time||Lack of hydrogen infrastructure|
|Consistent performance throughout shift||Unfamiliar technology|
What Are the Trends?
Electric trucks have been growing in popularity in recent years, and the ITA numbers bear out that trend. In 2007, about 57 percent of the market was electric. The percentage grew to 66 percent in 2009 before dropping back in 2010 as IC buyers picked up their buying habits. “The traditional IC truck user has a smaller truck fleet, and those users weren’t buying in the down economy,” says Long. “Meanwhile, large users of electric trucks, particularly in the food industry, were still buying during the downturn, so the proportion of electric trucks in the market rose in 2009. The 2010 numbers reflect the smaller users buying again.”
Despite the fallback in 2010, most industry insiders expect the proportion of electric trucks to rise higher in coming years as electric trucks continue to improve their productivity in more applications, and customers remain conscious of using a product with no hazardous emissions. Mark Milovich, president of Lift Atlanta (Decatur, GA), says, “Electric truck performance is right in line with an IC truck now, particularly with 80-volt trucks. Plus, with the increase in the fuel prices, it’s now more economical for many customers to recharge a battery than to fill up a fuel tank.”
On the other hand, electric trucks do come with a higher up-front cost most of the time, thanks to the cost of the required battery and charger. Internal combustion engines still do outperform electrics in some applications, most notably in pulling grades and reaching top speed more quickly. Milovich says, “If a customer isn’t set up for an electric operation, it can become cost-prohibitive to switch over. Much of a customer’s decision depends on their application.”
What Does the Future Hold?
Despite the belief by most that electric trucks will continue to dominate the market, no one interviewed for this story expects the market to ever go completely electric. “Electric market share will never get to 100 percent,” Long says. “The 80-volt electrics are pretty strong workhorses, but I don’t think you’ll see big electric trucks that can handle applications like the big IC pneumatic trucks at shipyards or lumberyards.”
On the propane side, Feehan sees growth of his association’s product, primarily due to larger engine development projects and the classification of propane as an alternative fuel. Eco-conscious users may find the green benefits and tax credits associated with propane as a reason to buy the fuel. “There are opportunities to get propane into some of the larger classes of trucks where propane has not traditionally a major player,” Feehan says.
What About Fuel Cells?
Fuel cells are becoming more viable, but many in the material handling industry speculate that widespread usage is still a long way off. Tests have proven that fuel-cell-powered forklifts perform adequately—better than batteries in some cases—but the lack of hydrogen infrastructure and a high cost of adoption are hindering the pace of adoption. Some in the market also have concerns about the capacity rating for fuel-cell-powered trucks. “On the electric trucks, you have a very large battery that is used as part of the counterweight of the truck. Fuel cells are lighter. That causes a problem of physics where there isn’t enough counterweight,” says one MHEDA distributor.
Do End-users Really Care?
Do end-users really care how their forklift is powered as long as it gets the job done? The answer is yes, though the reasons why aren’t quite as cut-and-dried. Depending on whom you ask and what their preference is, customers’ rationales are different. Go to The MHEDA Journal Online for a sample of responses culled from the Material Handling Professionals discussion group on LinkedIn.
The same distributor believes that fuel cells will not be seriously adopted in the market for another six to ten years. “The main problem with the fuel cell is hydrogen. It’s a very volatile gas that must be properly handled. The customer has to be specially trained and also must install a charging station.” One contributor to MHEDA’s LinkedIn group says, “Fuel cell trucks are great for indoor use but currently are preferred only by end-users who have a large fleet, due to ROI issues. Until prices come down and infrastructures are set, fuel cells do not make sense for users with only a few trucks.”
What Does it all mean for Distributors?
The chart on page 61 outlines some of the advantages and disadvantages of each fuel source as explained by industry insiders. This is not meant to be an exhaustive list but does raise some of the issues. Distributors can use the information to help determine the best solution for a customer. For example, the cost of a battery and charger drives up the up-front purchase price of an electric truck, but total cost of ownership is usually less thanks to fewer maintenance costs.
A good distributor can use that information to help close the sale. “Make customers understand that the price is higher because they’re essentially buying five years’ worth of fuel up front. It would be like buying five years’ worth of diesel fuel at the same time you buy the truck,” Milovich says. “Tell them to consider what the price of the IC truck would be if they had to go out and buy thousands of gallons of diesel fuel in advance.”
Of course, less maintenance means a distributor who sells a large percentage of electrics will miss out on some profitable future parts and service business. It’s a balancing act, like many customer issues in the material handling industry. The general sentiment in the industry, though, is that helping your customers choose the correct forklift comes down to learning their applications and educating them on what’s best for their specific needs. If that need is best met with an IC truck, then try to sell an IC truck. If the need is best met with an electric truck or a fuel cell, then push those products. As a distributor, solving the customer’s problem should be the top priority.
Propane Tax Credit available Through august 1, 2011
According to Brian Feehan, vice president of the Propane Education & Research Council (PERC), propane is recognized as an alternative fuel by the United States Environmental Protection Agency. Because of that status and the passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, users of propane can receive a tax credit of 50 cents per gallon used through December 31, 2011. The fuel tax credit is retroactive to fuel used in 2010, but claims can only be fi led once and must be applied for by August 1, 2011. Forklift distributors should encourage their customers to consult their tax advisor regarding claims for credits or refunds. See the Internal Revenue Service’s website at www.irs.gov for appropriate dates and forms.