How Has China Affected the Pallet Jack Industry?
By this point it should be clear: pallet trucks are an indispensable component of any successful company. We've learned the differences between industry-specific models, the features that can add both cost and functionality, and the things to look for when buying a “good” pallet truck.
Now it should be easy to buy a pallet truck, right? One would think, but the truth is, the industry has changed significantly in recent years. The lines between quality truck and economical alternative have blurred, and cost of ownership (including purchase price, maintenance, service, labor, replacement, and disposal) has gone up, not down. Economical fluctuations notwithstanding, there are reasons for this, but to better understand these reasons, knowledge of the pallet jack market is required.
“Made in China” and the Import Influence
It is extremely hard to find anything these days that isn't built in China. Clothing, electronics, mechanical components… the list goes on. However, whereas Chinese assembly has always been around, Chinese manufacturing has typically been tainted with the stigma of poor quality. Inefficient manufacturing practices, substandard labour codes, poor training, and a revolving door of skilled personnel have traditionally added up to a less than ideal manufacturing picture. This picture, however, is changing rapidly.
Many material handling manufacturers operating in North America have realized the growing influence and market acceptance of products made in China. They have since changed their focus from manufacturing to distribution, tapping into a steady source of cheaper Chinese product to handle their wholesale distribution requirements. One painful downside to this is the considerable loss of domestic manufacturing jobs and the closing or relocation of many domestic pallet truck manufacturing companies. Ten years ago the companies that produced a North American-built pallet truck numbered in the dozens – today there are only two. Chinese pallet trucks – for good or bad – have become a prevalent part of our industry.
Cost of Ownership – Going Far Beyond Initial Purchase Price
As previous posts have highlighted, all pallet trucks tend to look the same to an untrained eye. In fact, the intent of this pallet truck series is to educate buyers on what features and models to look for that represent quality, durability, and functionality. The market reality, however, is pallet jack prices are widely inconsistent, and extreme cost discrepancies exist for what appear to be similar products.
Sadly, this is the direction our industry is moving in, and it represents the worst of Chinese dumping in the North American market. Local dealers and distributors have bought dirt-cheap trucks in droves from Asian trading houses and are pushing them on the market at rock-bottom prices to gain a small shred of market share.
Keep an eye out for these throw away trucks with poor build quality, no aftermarket support, no spare parts availability, and once the dirt-cheap stock is depleted, they won't be easily replaceable or replenished. These pallet truck bargain sales are often from Chinese manufacturers who've been bought out or gone under (of the 300+ distinct Chinese pallet truck manufacturers, only about 5 are actually legitimate, and globally recognized manufacturing companies).
Thankfully, there are still customers out there who will buy a pallet truck for over $200 because they know they can maintain it with $50 worth of spare or replacement parts and make it last 3-4 years. That, in the long run, is still cheaper than buying a $150 jack every 8-12 months.
Companies that import very cheap Chinese pallet trucks either cannot or will not be able to sustain their business model for very long when quality and support are absent. They cheapen the industry and set a false standard. A good pallet jack however will be backed by a strong support program that includes spare parts, inclusive warranty, aftermarket support, and (most important) the possibility of replenishment!
Domestic Design, Foreign Product, and a Focus – First and Foremost – on Quality
China does represent a wealth of manufacturing and production opportunity; on that point there can be no debate. Companies must exercise caution though when determining Chinese companies to partner with for either supply, or manufacturing; while the manufacturing standard has improved, there still remains that inherent risk, due mainly to the sheer volume of supply that is available there.
A solution to the influx of cheap product though requires strong corporate partnership and development with overseas producers. Business executives and managers must make overseas targeted partner companies accountable to the same high-product design and quality standards as their own, with production parameters on par with domestic ones.
This concept has been pursued by some of the pallet truck industry's largest players with great success, and it's important for all domestic companies – producers, distributors, and end-users alike – to be smarter with their source of material handling equipment in order to achieve the maximum value for their customers at the end of the day.
Though they may not be fancy, or expensive, or even that exciting, pallet trucks remain a very important component for virtually every company. “With so many options available out there, it`s important to be as well-informed as possible before deciding on which jack to go with.“ Today, that information is now more important than ever!
Steve Guagliano Jr. followed his father into the material handling industry and has over 10 years of direct field sales experience, technical services and project management expertise. Steve is an expert in manual pallet trucks, high-lift stackers, and electric walkie and rider units.