It is well known that adequate forklift training brings quick returns through lower accident and damage costs to racking, trucks, stored goods and less business disruption/losses but how many operators know that good training can prevent sting-in-the-tail cost shocks when long-term contract hire agreements end? In Britain the issue is particularly important because contract hire accounts for about 65-70% of all trucks supplied.
The disturbing fact remains that despite stringent safety legislation and all efforts by truck makers to improve their truck safety and ergonomics, accidents remain woefully high along with ignorance among supervisors tasked with the job of enforcing best safety practice. According to one of Britain's leading forklift training outfits, Mentor, more than half of managers they meet have never driven a forklift or received any kind of truck training and up to 90% are woefully ignorant of their legal responsibilities for safe truck operation and the consequences of an accident that results in prosecution. Little wonder, then, that there is still much room for safety improvement.
There are, of course, many causes of forklift accidents, which in Britain is the largest, single combined cause of major and over 3-day injuries regarding workplace transport. Disturbingly, many are related to a company's perception of a trade-off between safe practice and the need to meet delivery schedules, compounded by fear-fuelled, staff reluctance over whistle blowing. Even among blue chip companies there is a resignation that accidents are part of doing business. One such British company, for example, routinely forks out £3 million a year for pallet racking damage. Others often tolerate high loading bay door damage caused by truck collisions, typically running in to the high thousands of pounds every year.
A clue to the sting-in-the-tail costs at hire contract expiry is the lax attitude to good housekeeping practices. Poorly maintained and cleaned floors riddled with potholes and crumbling joints raise truck maintenance costs, and in very narrow aisle (VNA) operations even incur racking damage costs, in particular. Poor lighting also features significantly in the accident toll. Such costs are normally budgeted for but the sting-in-the-tail costs are not. When a truck is returned to its supplier at the end of a hire contract a detailed inspection will normally be carried out. Provided a truck needs no more than a lick of paint and a normal service to make it suitable for onward hire there should be no contract termination costs. The one exception could be the exceeding of hours used clause in the hire contract. This issue can be avoided if care is taken to define 'hours of usage' and extra agreed cost for such excess at the beginning of contract negotiations.
It is estimated that these contract expiry costs of this nature are equal to 5% of the total hire cost for a 5-year contract, though not all forklift suppliers levy them. In one sense it is easy to see why. A nick in a driver's seat would mean a new seat costing at least £400. A damaged overhead guard could run into thousands. There is doubtless an element of cost padding in these charges, too, partly because truck suppliers are anxious to encourage customers to renew their hire contracts and for this they will promise to forgo these remedial costs entirely if the client renews the contract. Succumbing to this thinly disguised form of blackmail by renewing on these terms could be a far costlier mistake because it may be possible to get a much better deal with a different truck supplier, especially if switching from counterbalance and reach trucks to articulated forklifts.
A back-of-the-envelope exercise, based on a UK national truck population of 350,000, with 65% under hire, shows if that 5% sting-in-tail cost could be entirely avoided the annual UK savings would run into hundreds of millions of pounds. Add in the many millions more from accidental damage, injuries and business disruption/losses then the need and urgency for a robust truck training regime is blindingly obvious. Perhaps just one example will suffice to convince the doubters and chancers. One UK retail company paid Mentor £50,000 for a training scheme. The result was savings of £130,000 every year. Blindingly obvious or not, there seems to be too many purblind safety enforcers.