The mood on the supplier side of the material handling equation is generally upbeat going into 2018. While a few companies predicted their sales would soar by 30 percent or more, most saw growth in the 5-10% range. Several suppliers attributed their positive outlook to President Trump’s economic policies, but others were wary about what could happen if tax reform and the proposed spending on infrastructure doesn’t happen.
During the coming year, MHEDA suppliers will adopt new technology, upgrade their websites and explore other ways to respond to customers’ increased demands for faster, better service (the Amazon effect). Lack of skilled workers is a continuing problem; some companies have turned to social media not only to attract potential customers but also to let potential employees know that they’re hiring.
Tax cuts and protectionist policies
The Trump administration’s domestic economic policies are winning the support of many MHEDA suppliers.
“With proposed tax cuts, we are optimistic for increased spending,” observes Zach Johnston, global accounts manager, Easy Lift Equipment Co. Inc. (Newark, DE). “We have had consistent growth and have been adding employees to increase performance across all departments.” With a new facility opened in 2015/2016, Johnston says the company is well positioned to accommodate the expected 2-5% growth in 2018. It will also make software and IT hardware an investment priority. In addition, Easy Lift Equipment plans to fill an unmet need in the market in 2018 by offering increased capacity in one of their product lines.
A new tax plan, infrastructure spending and consumer confidence will propel an 8% sales increase for Hyundai Construction Equipment Americas Inc. (Norcross, GA), says Chuck Leone, vice president and COO forklift. The company will be adding staff and electronic capabilities, and plans to introduce new products in the first and second quarters. Leone anticipates a very active market for the material handling industry as a whole, with product availability a critical factor. That could change, however, if Congress fails to pass the tax bill or allot money to infrastructure spending.
Ongoing capital expenditures by businesses and “continuing economic tailwinds – the Trump effect,” should help Hamilton Caster & Mfg. Co. realize a 5% increase in sales this year, says Steve Lippert, executive vice president. The company will be releasing a new 3-inch wide caster sometime this year and may add more options to existing casters. While the 2008-2009 recession demonstrated that no market is recession-proof, he does expect the industry to remain strong unless there are significant external issues, like North Korea becoming a real war. He anticipates 2018 will be the company’s best in 110 years.
While things may look good domestically, some MHEDA suppliers are concerned about possible barriers to free trade that the Trump administration could erect.
“2017 has been a great year, but we expect 2018 to be up by 5%,” says Louis Coleman, director of sales and market at Autoquip Corporation (Guthrie, OK). That’s due to the continued drive by the manufacturing sector to spend money on improving and increasing their capacity and productivity, and by strong growth in the distribution market. Coleman is concerned, however, that trade protectionist policies could impede growth. “Free trade drives continued increase production and investments in productivity enhancements. Also, we sell internationally; if we close our borders, then it stands to reason that American products will not be attractive internationally.” Despite these reservations, Autoquip will be adding staff in 2018 and will be increasing its engineering capacity and controls offerings to meet an increased need for complex and integrated products.
Capitalizing on robust markets
With strong e-commerce and parcel markets, Kevin O’Neill, president of Steele Solutions (Franklin, WI) is very optimistic about the company’s sales in 2018, anticipating 25-30% growth. After adding more space in late 2017, O’Neill expects to hire staff for drafting, project management, engineering and manufacturing in different markets and regions this year. “More drawings in 3D have led to more staff in our design group,” he comments. But there could be constraints. “Lack of capacity based on workforce could hinder growth.”
Bryan Carey, president of Starrco [Maryland Heights, Missouri], is looking for sales to go up by about 15% in the coming year, with the cannabis industry spurring that increase. Despite a challenging labor market, he anticipates adding project managers during 2018.
The addition of sales staff in 2018 should help boost the sales of Engineered Products, LLC, (Greenville, SC) by 5%, according to Ray Chase, executive vice president, sales & estimating. A growing economy and increased capital spending will also be factors, and should also yield a 5% growth in the market overall. Chase predicts that automation will continue to be a big trend in the year ahead.
Growth in the warehouse distribution sector will help push sales up 15% in the next year for Daifuku/Wynright (Oak Lawn, IL). Gordon Hellberg, vice president intergrator sales, says the company will be adding staff this year and may be expanding its facilities in 2019. “With the huge growth in the parcel industry, we will be releasing a line of bolted parcel conveyors that reduce cost and installation time in January 2018,” he says. A recession could hinder strong industry growth, but the food and beverage markets should remain strong.
At West Point Rack, Inc. (Omaha, NE), CEO Terry Sroka anticipates a 12-15% increase in sales due to an overall good economy. “Industrial expansion seems to be increasing,” he observes. The industry should see some positive growth unless there’s a sizeable economic contraction. “Worldwide political unrest can also be a game changer.”
Although Scott Friedman, VP-Sales at Fabenco, Inc. (Houston, TX), expects general industry growth to remain flat, he anticipates his company will enjoy a 6% increase in sales, because of specific market growth and the new cross-over ladder product it will be introducing this year for manufacturing and distribution customers. He says the most important investment that Fabenco will make this year is in marketing.
While regulation could hinder industry growth, Lee McCord, vice president, sales, at Adrians Safety Solutions (Knoxville, TN), remains upbeat about his company’s sales in 2018, projecting a 30% rise. “A renewed faith in the economy” is driving that growth, as well as increased company spending on non-essential items. Adrians Safety Solutions has increased production and will be investing in its inventory next year in order to meet its customers’ needs for safety-related products. It plans a new product release in the second quarter.
The tech effect
New technologies and an increasing reliance on automated solutions will be a big factor in many suppliers’ sales efforts.
Ted Yeigh, sales director at Columbia Machine Inc., (Vancouver, Washington) believes that greater investment in automation with a larger payback plus a continued increase in business to consumer and dot-com sales will drive the company’s 5% growth. They will be adding two full time employees in sales and project management, but “lack of available talent, specifically service technicians” may hinder industry performance, he says. The company hopes to overcome that problem by investing in service technicians.
At Konstant (Oakville, Ontario, Canada), Richard Koch, national dealer management, also sees a trend to more automation. “We’re in tune with other automation companies to deliver any requirements that our customers desire,” he says. He anticipates steady, consistent growth in 2018, powered by a strong economy in both the U.S. and Canada, although inflation could begin to creep up. “I think we’ve already seen signs of that,” Koch adds. Now under new ownership, Konstant will be investing in staff growth in the coming year.
Material handling companies are turning to increased automation and higher intensity forklift applications to solve production problems, says Jim Donoghue, director of marketing at Camso (Charlotte, NC). That’s led the company to develop new technology for the forklift tires they will be bringing to market in the first and second quarter of 2018. He anticipates growth of about 5% due to the country’s economic expansion, although “tax policy, geopolitical risk and rising interest rates,” could hinder that growth.
Charger technology is advancing rapidly, and Douglas Battery (WinstonSalem, NC) will be working hard to stay on the leading edge in 2018. “Newer, more high efficiency chargers equate to cost savings for the customer while providing longer life for the batteries,” says Brian Faust, general manager. Since customers today are data-driven, the company is adding different monitoring devices to its products. Faust looks for company sales to be up about 4% due to national account cycling buying and to the addition of new sales representatives around the country. With consumer confidence remaining high, he believes the overall materials handling market should be up by 2-4%.
With user interfaces becoming more technically advanced, Pacline Conveyors Inc. (Mississauga, Ontario, Canada) has just hired its first software designer. Karl Scholz, president, hopes to grow by 20% due to the reshoring of manufacturing and spending by automotive manufacturers. “There are record automotive sales in North America, and large distribution centers being designed,” he explains. The company moved to a larger facility in 2017 and expects to add engineering and skilled trades position in the next 12 months. It will also be investing in manufacturing methods like LEAN, KPIs and 5S. While adoption of new technology could help the industry achieve 6-8% growth, a drop in retail spending could derail that increase.
In the coming year, Catavolt, part of Hexagon (Redding, CA), will be introducing a product that offers “increased offline app support to help customers in extremely limited connectivity or remote locations such as oil rigs,” says Josh Cranfill, senior account manager. “Customers are increasingly demanding simpler user experiences,” he observes. Cranfill sees steady growth in the industry but is expecting a 50% increase in customer sales at his own company. To handle that growth, Catavolt will be adding development, sales and service staff.
David Grundy, marketing, ASG Services (Norcross, GA) believes an increased reliance on high-tech solutions will benefit most companies in the material handling industry. At his own company, a new manufacturing process will enable the company to introduce a product in the first quarter 2018 that should bring improved quality at a low price. Adding new sales team members and focusing on their development should drive ASG Services’ sales up by 10% in the coming months.
An increased emphasis on sustainable operations could change the look of many companies’ forklift fleets. “Electric equipment will continue to erode the internal combustion products,” says Loren Swakow, managing director of Nobelift North America [Des Plaines, Illinois]. The company is a newcomer to the market, and Swakow expects to invest in marketing and grow the company’s market share extensively over the next year. Nobelift will be introducing a new package picker suited to order picking by small quantities in the third quarter.
“Organic growth and new technology” should grow the sales of Hawker Powersource by 3-3.5% in 2018, according to Dean Portney, vice president, sales and marketing. Products like the company’s new Flex batteries for lift trucks represent a trend toward cleaner energy and higher energy density products, which will increase production efficiencies, he adds. Hawker has already expanded to accommodate an increased demand for its products, but may add one sales position in the coming year. The company plans on investing in team, training and technology and will release new products in the second half of 2018.
Bob Herling, president of Tri Lite Inc. (Chicago, IL), sees a wider acceptance of the use of energy-saving LED lights among his customers, which include forklift users and OEMs. The company will be introducing new products with a unique design and lower cost in the first and third quarters of 2018. While Herling anticipates level growth for his own company and the industry in general, the economy and possible import duties could have an impact.
Alternative energy sources (lithium ion vs lead acid batteries, for example), fuel cells, automation and driverless trucks, and big data and fleet optimization are all trends that will impact the material handling industry in 2018, predicts David Furman, presidentsales, Americas, Hyster-Yale Group (Greenville, NC). He’s anticipating flat to slight growth for the industry as a whole (1-2%), but a slightly stronger performance (2-4% growth) for HysterYale Group due to industry and share growth. However, industrial production rates, e-commerce and consumer confidence levels could all change that forecast.
Meeting increased customer expectations
Customers accustomed in their personal lives from easy online ordering and fast shipments to other online retailers are now demanding the same kind of service in their business transactions with MHEDA suppliers.
Material handling suppliers are seeing the impact of the Amazon effect. “Customers need things now! Preplanning has become very difficult,” says Chip Merritt, CEO, InCord Netting (Colchester, CA). The company has been planning its own growth, however, and will be adding new products each quarter that will adapt new technologies (materials) to traditional applications. InCord Netting will be adding two new buildings in late 2018 and will beef up its staff of production and installation workers. Merritt expects continued expansion in new warehouse and manufacturing space and more emphasis on safety will boost company’s sales by 5-6%.
Recognizing the power of the internet to attract and serve customers, Handle It Inc. (Milwaukee, Wisconsin) will be making an “investment in attracting people to our website and making improvements on it,” says Chris Jashinsky, sales manager. Customers are “buying on price and availability more and more, and they want the path to purchase to be as easy as possible.” He’s optimistic both about the company’s growth (up 10%) and the material handling market as a whole (solid and growing).
Superior Tire & Rubber Corp. (Warren, PA) will be adding both manufacturing and sales positions, expanding work hours in existing facilities and relying on its remote location warehouses to expedite product delivery. “Availability of product is critical to our distributors and our consumers,” says William LeMeur, executive vice president. The company’s new products this year will focus on longer work life and/or on reduced cost. Rebounds in the agriculture, construction and mining industries, and possibly infrastructure construction, will spur the sales growth by 10%.
Since customers are demanding immediate answers, Wirecrafters (Louisville, KY) has introduced a configurator that enables its distributors to acquire a quote immediately. They’ll also be investing in new technology for the production floor and introducing some revisions to their products in late 2018. “The improvements we are working on will add to the quality of the product and also the ease of installation,” says Milt Tandy, director of sales and marketing. He anticipates growth of about 5% from working more closely with distributors. The company will be expanding its facilities in third quarter 2018 and will be looking to add production workers as well, but workers’ wages versus product selling price continues to be an issue.
Cornerstone Specialty Wood Products (Cincinnati, OH) has listened to its customers and adapted its manufacturing process to better meet their needs. That may be one reason why Keith Shipman, national sales manager, is looking for 12% growth this year. The e-commerce market is also a factor. “We are always prepared for growth and have been adding staff for the last five years,” says Shipman, adding that the company will be starting an expansion process this year as well. But political policies and tax laws could derail overall industry growth, which he anticipates hitting about 9%. Shipman says the company’s new product coming out in second quarter 2018 should “take the product and the market to a different level, solving multiple issues.”
With customers expecting quicker delivery of products, Allied Systems Company (Sherwood, OR) will be “keeping more inventory on hand for quick ship opportunities,” according to Cecil D’Antignac, vice president, long reach sales. He’s looking forward to a sales increase of 5% this year, spurred by economic factors related to the Trump presidency and to extended growth in the area impacted by the hurricanes. Although facility expansion plans are uncertain at present, Allied Systems Company does plan on adding geographically focused sales positions in the coming year. They’ll be introducing a new product in the third quarter that will meet customers’ increased demands for safety and visibility.
“We have seen significant growth and, as a result have grown from 800 employees to 1100 employees in the last year. Finding those employees is a challenge to our growth,” says David Peacock, president, Hytrol Conveyor Company (Jonesboro, AR). “Whether it is engineering talent, field service technicians or skilled hourly workers, recruiting and retaining them is a priority.” The company will make additional capital expenditures in the coming year. After the rapid growth of the past three to four years, Peacock expects sales to remain level this year, but he sees the overall industry enjoying moderate growth. They’ll be introducing new products in the second and fourth quarters.
A lack of experienced techs has required Heli Americas (Memphis, TN) to make its products easier to serve and to expand its aftermarket support structure, according to Bruce Pelynio, president/CEO. The company plans to introduce new and updated products throughout the year, with sales up 10-15%. Pelynio expects to see continued expansion and consolidation in the rental segment, and believes that a small amount of inflation may affect the company in 2018. The company will be adding market-focused national account managers during the year.
Jeff Hamlik, vice president, Rightline Equipment (Rainier, OR) perceives “much less knowledge and experience in our customer base.” As a result, “we have increased the quantity and quality of our customer service staff,” he says. Rightline will be hiring a new sales representative and will be adding about 25,000 square feet of space to its facilities this year. The company expects to experience 15% growth due to favorable economic conditions and the release in the second and fourth quarters of new products with enhanced visibility and functionality. With the industry facing increasing costs and price pressures, Hamlik foresees that margin control will be a big industry issue in 2018.
Bill Ryan, industry advisor with TDTOne (Pineville, NC), sees materials handling suppliers struggling to find enough good people. “All of my clients will need to add technicians, along with more talent in their IT and administrative areas,” he says. “We are helping them grow their own.” The company will be releasing new management programs through the year. Ryan believes the material handling market as a whole should remain strong, and he anticipates a quick rebound if there is slight softening in some areas. “We will see some evidence of inflation as rates rise, but this is necessary and this is cyclical. Wages will need to grow at a faster rate if dealers want to hang on to their good people,” he adds.
Cascade Corporation (Portland, OR) will be adding engineering staff and making an investment in its people a priority. Pete Drake, VP operations America, anticipates sales up by 3% due to the e-commerce and infrastructure markets. “The industry will continue to be strong,” he adds. The company will be releasing new products in the coming year that will improve customers’ efficiency.
Tractel (Norwood, MA) will be hiring people for its inside and outside sales forces and investing in a new wire rope cutting machine. Steve Gallagher, marketing manager, says that economic growth and internal changes should boost the company’s sales by 10%, while the industry as a whole will experience both growth and some small mergers.
Social media and internet marketing
Several companies with strong social media programs expect that their benefits will continue in the coming year. “SpaceGuard (Seymour, IN) is extremely active, and some of our efforts have led directly to new sales and relationships, particularly on LinkedIn,” said Eddie Murphy, company president. “We believe our brands have become more socially relevant as a result of these efforts.” Since staffing is an issue for distributors, “we have put several initiatives in place that specifically help our distribu – tors shrink the learning curve for both their salespeople and installers on our solutions; that should help offset the changes and challenges in staffing,” he says. The company will rely on tech – nology, more readily available product information and product innovation to boost its sales by 10% in 2018. It is planning an expansion of its facilities in the third quarter.
Michael Scoon, director, global sales and marketing, Stellana (Lake Geneva, WI), says that the company sees a definite advantage to social media marketing. “We can’t quantify it, but whenever we stop doing it, the amount of traffic going to our website and also incoming inquiries seem to drop off,” he explains. “We seem to have better SEO when we are more involved.” The secret to success is consistently shar – ing information on social media sites like Facebook, Twitter, LinkedIn and Instagram. Scoon says Stellana should see a 6% increase in sales this year from organic growth and new markets. The company will also introduce a new product later this year that fills a mar – ket need where current products under – perform. “Micro logistics is becoming more important,” he adds. “You need to be able to ship smaller quantities to more locations.” He expects a contin – ued move towards automated guided vehicles and warehouse trucks.
Nathan Andrews, president, Morse Manufacturing Co. Inc. (East Syracuse, NY), looks at social media as another opportunity to nurture the strong cus – tomer-dealer-manufacturer relation – ships that drive the material handling industry. A strong online presence is also important. “Customers continue to want more information to be readily available online so they can research themselves,” he adds. Andrews sees continued strength in both domestic and international markets, and projects a sales increase of about 5%. The company will be opening a new building in the third quarter of 2018, and adding machining, welding and inside sales positions as well. Drags on growth could include economic uncertainty and upward wage pressure, which Andrews attributes to minimum wage increases in New York State.
Crown Battery Manufacturing Company (Fremont, OH) will be “working more on monetizing our social media effort,” according to Mark Kelley, vice president, industrial products group. Organic sales efforts, traveling to new opportunities and new products and services should help the company increase sales by 6-9% this year. While the company will be handling anticipated growth in house whenever possible, “we have been adding employees in sales, marketing, operations, distribution and engineering,” he says. Foreign competition on the lift side could hinder growth, and inflation might be a factor this year but is more likely to have an impact in 2019.
Gregory Larson, president, Wildeck (Waukesha, WI) considers social media “a good way to promote ourselves.” Getting the company’s name out in the market could be an advantage, as the company is anticipating adding manufacturing labor and engineers in the coming year. It will also be opening a new building. With a growing industry market, and the introduction of a new product in the first quarter 2018, Larson anticipates sales will go up 10% this year.
John M. Ousset, president and creative director of the Ousset Agency Inc. (Spring Branch, TX) has seen an increased use of good SEO over the last year, and he anticipates that trend will continue. He expects his business to grow by 10%, and will be hiring web developers to handle the additional work. Ousset believes the industry will continue to grow. “Take the opportunities presented and wring everything you can out of them, in a positive way,” he advises.
Art Arellano, president, eliftruck. com (Tinley Park, IL), says his customers need assistance with online sales. “Dealers are requiring more internet marketing tools,” he observes. He says that dealers will be able to sell more products with the new software products elifttruck.com is introducing later this year. Although the lift truck rental market appears to be more popular than ever, Arellano anticipates level growth for both the company and the industry. “I think the economy is in a good position with the Trump administration, and tax cuts, etc., may fuel growth,” he adds. If the company requires program developers in 2018, Arellano will most likely outsource the tasks.