There is a right way and a wrong way to invest in used material handling equipment. A recent article in Supply & Demand Chain Executive exposed the potential hazards of buying used pallet racks—or, the wrong way to purchase used equipment.
A cold storage provider in Wisconsin chose to purchase a large rack system to reduce cost and speed installation in its new facility. This tactic seemed wise until issues started popping up; the rack quality was low; it had few usable rails and much of the rest of their order left out key pieces along with rack in twisted pieces.
Unfortunately, the business purchased rack from a dealer making big promises. There is no mention whether the company actually saw or inspected the equipment prior to the sale. However, by what is stated, it seems unlikely. Executives of the cold storage company attempted to negotiate and get from the dealer what they thought was purchased. Regrettably, the dealer went out of business shortly afterward leaving the company to fix the dealer’s problem.
Sadly, the cold storage provider had a bad experience with a less-than-reputable dealer. However, it is wrong to paint all used equipment dealers with that brush.
As the old saying goes, let the buyer beware. With the purchase of any equipment, new or used, we all have a responsibility to perform due diligence on both the product(s) being considered AND the company from whom we purchase. If we fail to do so, bad things happen. The cold storage provider, unfortunately, apparently did neither.
A better way to invest in used material handling equipment
The most important step companies must take when purchasing used equipment is knowing with whom they are dealing. At East Coast Storage Equipment, our owners have more than 30 years of experience in the industry, delivering superior results for the past 21 years. Our team personally inspects every piece of equipment before we make an offer, so we know if any problems exist.
It is important potential buyers inspect the equipment prior to any sale and we encourage our buyers to perform their own inspection. This is why East Coast Storage Equipment provides a detailed description of the equipment on our website with the location listed. There is also contact information so buyers can easily schedule an appointment.
Occasionally on some smaller equipment, the products simply do not merit a trip to view in person. This is why we provide multiple photos showing different angles and aspects of the equipment, making it easy to inspect online. It isn’t our preferred way to inspect, but we realize it offers some benefits in certain situations.
Most used equipment dealers offer the products “as is,” meaning any equipment having issues are sold with those issues. Much of the equipment we sell also is sold “as is” where the equipment is located. However, unlike many dealers, East Coast Storage Equipment offers a service to bring any potential problems to like-new condition, should the buyer choose to make this request. This eliminates any problems a prospect might find during inspection they consider critical to safety or efficiency. It is also another example of the benefits that come from working with a reputable company.
The article implied set up of the used rack system was the responsibility of the purchasing company. Many used equipment dealers place the responsibility for set up of the used rack on the customer. On the other hand, good used equipment dealers offer the option of installing equipment for the customer. East Coast Storage Equipment not only has trained installers to perform the set up of your new used equipment, we offer other services to ensure the equipment works as you intended. Our staff of engineers will work with customers to improve the design of the installation, allowing customers to get the most from the investment.
No company deserves the headache of buying a product only to discover it was not the product promised like the company in Supply & Demand Chain Executive. It casts a negative light on everyone.
Used material handling equipment offers added savings, faster turnaround and years of durable service without the high price of new. The biggest difference in getting what you want versus something one buys is one of relationship. Take time to invest in such a relationship with your used equipment dealer and you likely will have success with the rest.
Find a reputable used dealer and invest in a relationship.
LEADERS IN LOGISTICS: Check out our tips for warehouse and logistics managers who work with material handling companies. There are some common misconceptions you can easily avoid!
NOTE: To be featured in our ongoing Leaders in Logistics feature, reach out to our team!
In 2010, Andrea Ahern co-founded Mid Florida Material Handling (MFMH) with her partner Paul Sutherland. The business was launched as a "full-service” material handling distributor for Central Florida and has grown by leaps and bounds since first. They differentiate themselves from forklift dealers, pallet rack dealers, and other material handling operators in the area by offering a more complete and consultative approach.
MFMH serves a broad customer base that includes multinational companies running massive distribution centers. Their primary product lines are forklifts, pallet racks, mezzanines, conveyors, and pretty much any supplies or hardware you may require for your warehouse or distribution center.
Material Handling & Shipping
FreightPOP: What are some misconceptions about your business?
Andrea: We run into many warehousing customers with an unrealistic idea of lead times for equipment. Unfortunately, the material handling industry isn't really at the level of e-commerce; lead times for stock items can be 1-2 weeks. (There’s definitely no Prime or 2-day delivery!)
In addition, a lot of things are manufactured to order – this could mean lead times in excess of 3 months.
FreightPOP: What are some common mistakes you see shippers make?
Andrea: One of the biggest mistakes I see shippers make is not taking the time to understand their options when it comes to pallet racking. Most people’s default choice is selective racking, which is what is typically seen in warehouses.
Many warehouse owners don't realize there are other options available such as pushback, pallet flow, or drive-in. These options have some significant benefits in specific applications and can increase storage density and faster pick times.
Another thing to look at is the price difference between new and used pallet rack. There can be significant savings by going the used route without any impact on storage density.
FreightPOP: MFMH helps customers with warehouse moves. What are some tips for those moving to a new location?
Andrea: I think the biggest key to moving to a new warehouse location is planning – don’t make any knee-jerk decisions.
We’ve worked with a lot of shippers that have rushed into a warehouse move and ended up with pretty significant downtime due to poor planning. (They called us in at the last minute to fix mistakes.)
Most material handling companies offer free pallet rack designs and quotes. There’s no downside to bringing in the experts to look at your process and help you prepare your new warehouse.
Looking Forward
FreightPOP: Where do you think things are heading in shipping over the next year?
Andrea: We are feeling a lot of pain with rising freight costs and decreased shipment space. The cost to bring a container in from our overseas suppliers has nearly doubled, and lead times have been extended. We see similar problems with trucking costs throughout the United States.
We expect to see shippers start focusing on productivity improvements through new technology to offset some of these obstacles with freight.
FreightPOP: Recent MODEX and PROMAT DX conferences were full of the world of AMRs, optimal picking solutions, sortation technologies, robot order picking, and the like.
Do you think this is on logistics and warehouse managers' minds generally?
Andrea: These technologies are definitely on people’s minds as many shippers are trying to stay ahead of the curve.
I think we are on the precipice of a big push towards digitization – our larger customers are either investigating these options or are in the process of implementing them. Small to mid-level shippers aren’t always there yet as the capital cost can be pretty high for these products.
For us, the biggest thing we will change is our product offering. The main pallet rack manufacturer that we represent, Interlake Mecalux, has launched a few new products such as stacker cranes, pallet shuttles, and pallet conveyors. We are beginning to offer these new technologies to our customers, and interest is growing exponentially.
While the initial capital cost of these new technologies can be high, the cost savings from labor reduction and productivity improvements make it easy to prove a customer’s potential ROI.
FreightPOP: Can you share some tips for shippers using a material handling service like yours?
Andrea: The best thing to do is just reach out if you have any questions regarding warehouse optimization or material handling equipment. Most material handling companies will offer free quotes/rack design and work with you to find the best solution to your problem. Site visits are common, and any information you share with us about your operation will help us find the optimal solution for your business.
Companies like us are unique in that we offer a full suite of warehouse equipment, so we can truly become partners with other companies. We ensure that all aspects of your warehouse work together, from your forklifts and pallet rack to your dock levelers and doors.
Logistics Integrations & Digitization
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