Now is the time to buy capital assets. Section 179 of the U.S. Internal Revenue Code provides tax benefits for businesses that purchase qualifying equipment, including forklifts. Thanks to the 2017 tax legislation, businesses have been able to deduct a significant amount of 'bonus' depreciation in the year they buy and place an asset into service.

In 2023, the maximum depreciation is $1.16 million. Businesses can deduct 80% of the asset in the year you put it into service and must then depreciate the remaining 20% over the asset's life. In 2024, the first-year deduction falls to 60% of the asset price and ultimately falls to 20% in 2026. The takeaway is to maximize that first-year deduction and step up your equipment purchases this year.

How to Calculate Your 2023 Section 179 Deduction?
The advantage of the Section 179 tax deduction is the ability to increase your upfront tax savings. Your overall savings can vary - the 2023 Section 179 Deduction Calculator can help you estimate your tax savings for 2023.

Tax laws and regulations can change, so it's essential to consult with a tax professional or accountant who is up to date with the latest tax codes and can provide guidance specific to your business and tax situation.

Standing desks are all the rage now in today’s workplace. While many people I know with standing desks hardly use them, they’re at least there in case you want to stretch your legs every once in a while and get a good view around the office. And I suppose there are the health benefits of not sitting down throughout an entire work shift.

But choosing between a stand-up rider and sit-down forklift is about more than the potential health benefits. Using the correct piece of equipment can actually have a major impact on the safety of your workplace. This guide will help show you the pros and cons of both types of forklifts and point you in the right direction for your next purchase, lease, or rental decision.

On/Off Frequency – One of the main reasons you would consider using a stand-up rider is the fact that getting on and off the forklift can be considerably faster. With lower step heights and no seatbelt to take on and off, time spent entering and exiting can be cut down significantly. This is ideal for applications where operators are frequently getting off of the forklift throughout the course of their shift for activities such as picking product. The time and labor cost savings can really add up over time, depending on the frequency of operators’ getting on and off of the forklift.

Performance – Sit-down forklifts can have higher travel speeds and lift/lower speeds than stand-up riders, which can increase productivity and throughput in high volume applications.

Lifting Capacity – Stand-up rider and sit-down forklifts are both counterbalanced type forklifts. When comparing a stand-up rider to a 3-wheel electric with the same base capacity, you typically get more lifting capacity from the stand-up rider at higher lift heights due to the compact design and centralized center of gravity. Four-wheel electric models, however, typically attain the highest lifting capacities overall.

Purchase Price – The initial cost is typically higher for stand-up rider forklifts when compared to 3-wheel electric models.

Right Angle Stack – In general, right angle stacking capabilities are fairly similar between 3-wheel electric and stand-up rider models with similar capacities. Stand-up rider forklifts, however, usually have a small advantage due to their shorter length and can operate in slightly smaller aisles. Both stand-up rider and 3-wheel electric forklifts have a significant advantage over 4-wheel electrics in regard to minimum aisle width requirements.

Operator Preference – Operator preference tends to play a large role in most purchasing decisions for new equipment. Operators who are used to operating sit-down forklifts are generally resistant to swapping their sit-down for a stand-up rider and vice versa. The main reasons for this are the differences in operating position and operability. Stand-up riders are typically controlled by a single multi-function control handle while sit-down forklifts use conventional cowl-mounted levers or mini-levers. Sit-down forklifts also have traditional brake pedals, while stand-up riders use “plugging” (requesting travel in the opposite direction) for braking and have a dead man pedal for emergency braking. Being familiar with a particular operating style promotes safety and can help to increase productivity and operator confidence. But over time, operators tend to adjust and get used to the new controls and nuances.

As always, if you’re unsure of which product is right for you, reach out to your local, authorized Toyota dealer for advice and consultation based on your material handling needs. View original post HERE

Electric vs. Internal Combustion Engine Forklifts

The great debate – electric forklifts versus IC (internal combustion) forklifts. This decision is not only for new companies. Established companies may also weigh the advantages and disadvantages of each fuel, especially if there is a shift of priorities to “go green.”

Electric Forklifts

The forklift industry has experienced a shift in sales, with electric forklifts now accounting for nearly 60% of the forklift market. Electric forklifts are rising in popularity due to advances in technology that are allowing them to operate more comparably to internal combustion engine forklifts in regards to performance and run time. The emergence of fast-charging capabilities, higher-voltage outputs, and new and improved battery, pump, and motor technologies are some of the reasons for these breakthroughs.

Electric forklift advantages include:

• No exhaust emissions: Electric forklifts are powered by electrical energy sources such as batteries or fuel cells, which eliminates an employee’s exposure to potentially harmful exhaust emissions.
• Reduced maintenance costs: Electric forklifts use no disposal waste (i.e. engine and transmission fluid) and a high percentage of battery lead can be recycled.
• Operator ergonomics: Less noise and vibration is generated by the electric forklift, reducing operator fatigue.
• Decreased repair costs: Electric forklifts have less moving parts to maintain and repair. AC motor technology further eliminates brushes to create no spark hazard and better speed control.
• Lower long-term fuel costs: Batteries for the electric forklift can be recharged. Although the upfront costs for batteries and chargers can be expensive, the return on investment over time is typically higher than when using fuel.

With these advantages come other factors to consider. Although electric forklifts have lower lifetime fuel costs, the initial cost is higher. In addition to the cost of the battery, an area for charging, watering and cleaning must be arranged. Certain electric forklifts can be at a disadvantage when using the forklift in an outdoor application, depending on the design of the forklift. Many forklifts today, including Toyota’s 3-Wheel Electric and 80V Pneumatic models are designed to protect critical forklift components from potential damage due to water intrusion. Downtime can also be experienced if the battery is not charged or equalized properly.

IC Forklifts

The market is still strong for IC forklifts. They account for about 40% of the forklift market and are viable solutions for both indoor and outdoor applications.  IC forklifts tend to be more popular for outdoor, high-capacity applications and for specialty applications such as paper roll handling and container handling.

IC forklift advantages include:

• Flexible application: IC forklifts are good indoors and outdoors. They operate well in rain and other inclement weather.
• Multi-shift use: The fuel savings associated with electric forklifts is greatly diminished or negated when multiple batteries are required to keep an operation running. These batteries also take up additional space in a facility, reducing efficiencies and increasing operating costs.
• Lower initial cost: On propane powered forklifts, only the investment of propane tanks and their storage area is needed to operate the forklift. Gasoline, diesel, and CNG powered forklifts are usually purchased when refilling stations are conveniently available. The infrastructure for these stations, however, can be very expensive if they don’t already exist at your facility.
• Easy to refuel: IC forklifts running out of fuel do not require a lengthy charging period. An operator can easily replace the propane tank in 5 minutes and then continue production. Gasoline, diesel, and CNG powered forklifts can also be refueled in a matter of minutes depending on their location. This is especially important with a multi-shift operation.

Other factors to consider when purchasing an IC forklift include providing ventilation in the warehouse due to emissions, operator fatigue due to noise and vibration and the physical requirements of changing propane tanks. Finally, if the operation does not require an IC forklift you should consider the lifetime costs of maintenance, repairs and fuel cost when compared to an electric forklift.

LP vs. Gasoline vs. Diesel vs. CNG Powered Forklifts

Once you’ve made the choice to go with internal combustion engine powered forklifts for your operation, you now need to decide which fuel type is best for you.  The following tips should help to point you in the right direction.

Liquid Petroleum Gas (LP) – LP is ideal for customer locations that do not have gasoline, diesel, or CNG refilling stations readily available.  If you’re purchasing forklifts for a new facility, LP has the lowest initial cost since all you essentially need to purchase are LP tanks and a place to store them.  LP tanks can also be swapped in a matter of minutes, which can reduce your amount of downtime when refueling.  LP forklifts are available with both cushion and pneumatic tires and are ideal for both indoor and outdoor operations.

Diesel – Diesel fuel is highly efficient and can provide longer run times in general compared to other fuel types. One by-product of the combustion process with diesel is soot, which can accumulate in the exhaust system of a forklift and needs to be removed. Most Toyota forklifts are built with diesel oxidation catalysts so that this is slowly burned off over time, but there are some forklifts out there that use diesel particular filters that need to go through a manual regen process to burn away these deposits.  This can lead to more downtime since the forklift must be parked and not in use for the manual regen process to complete.  In general, diesel engines also have higher torque than their LP or gas counterparts, which can provide increased gradeability and acceleration. While fuel pricing is subject to change, diesel currently costs more per gallon than gasoline, providing a better return on investment over years of use. Diesel forklifts are generally only available with pneumatic type tires and are designed for outdoor use. This is mostly due to the fact that they are louder machines and produce more emissions than LP or gas powered forklifts.

Gasoline – Gasoline only powered forklifts are pretty rare in the material handling industry due to the popularity of dual fuel forklifts and the general lack of gasoline fueling stations, but they do serve a purpose. For customers that have refueling stations readily available, conveniently placed, and able to accommodate the size of their fleet, there is little reason to use LP or dual fuel configurations. Gasoline powered forklifts also do not have an LP tank and bracket on the back of the forklift, which can increase rearward visibility. They are also typically more powerful than their diesel alternatives and can provide increased travel and lift/lower speeds.

Compressed Natural Gas (CNG) – Compressed Natural Gas (CNG) powered forklifts also require the appropriate refilling equipment in order to operate, but this type of fuel provides some distinct advantages. CNG is better for the environment and for overall air quality due to the fact that it produces less emissions and the natural gas dissipates into the air as water vapor and carbon dioxide in the event of a leak. Unlike LP forklifts, the CNG tank is never removed, but is actually refilled which can reduce downtime and operator strain. Infrastructure for CNG refueling stations, however, can be expensive due to the large amount of land required and general cost of equipment and installation. This, along with other barriers to entry such as obtaining the proper permits and having an adequate natural gas supply make CNG an unpopular choice in the current material handling market.

Deciding which material handling provider and equipment you want to go with can be a difficult and drawn out process. Determining what purchasing method to use to procure that equipment, however, doesn’t have to be. Buying, renting, and leasing forklifts all have their own unique advantages. The points outlined in this article will help identify which method is best for your operation so that you can get those forklifts on order as soon as possible.

Advantages of Buying a Forklift

1. Return on Investment – This is the only option that will allow you to resale the forklift, which can be a valuable way to increase your return on investment depending on the residual value of the forklift and how well it is maintained. Purchasing forklifts is generally provides better return on investment compared to long-term rentals since rental fees are higher than monthly financing costs.
2. Customization – Buying a forklift means you have ownership of it, similar to owning a car. This allows you to make more modifications to the forklift than you could with a rented or leased vehicle. Ordering a new forklift allows you to customize it with factory installed options tailored for your application.
3. Tax Deduction – Forklifts that are purchased can be eligible for tax deductions, unlike rented or leased vehicles.
4. Liability – Rental and lease vehicles must be returned after a set period of time and are expected to be in a reasonable condition based on the verbiage in your contract. Purchased vehicles are yours to keep, so cosmetic damage isn’t as much of a concern.

Advantages of Renting a Forklift

1. Seasonality – Renting additional forklifts only as needed for seasonal purposes can be a great economic way to have additional equipment only during the times that you need it.
2. No Long Term Commitment – Since rentals are usually payed for on a month-to-month basis, you have the ability to return the forklift or swap it out for a different one from your dealer’s stock.
3. Short Lead Times – Most forklift dealerships have ample stock of a variety of material handling equipment, so you don’t have to wait for a new forklift to be built and shipped to you from the factory.
4. No Financing Required – Renting forklifts requires no capital financing, eliminating an extra step in the approval process.
5. Reduced Maintenance Costs – Planned maintenance is generally built into the rental contract, meaning any time your forklift is down due to normal wear and tear, a technician will come to repair it at no added cost.

Advantages of Leasing a Forklift

1. Predetermined Replacement Cycle – Leasing allows you to set the number of years for the term of the lease based on your operation’s needs. Shorter leases tend to work better for companies that want to be more fluid and for high-cycle, high-throughput applications that will put more wear and tear on the forklifts more quickly.
2. Lower Monthly Costs – Leasing offers lower monthly payments compared to buying or renting, allowing you to pocket more cash on a monthly basis.
3. Less Paperwork – Owning a forklift or fleet of forklifts requires additional paperwork and fleet management duties than leasing does.
4. Latest Models and Features – Leasing allows you to keep a rotating stock of new forklifts in your fleet so that you can utilize the latest and greatest models and technology. Similar to purchasing, these models can also be custom built for your application.
5. Flexibility – When the terms of the lease are up, you can make adjustments as needed to increase or decrease your fleet size, change the product mix, modify lease terms, and more to fit your constantly changing needs.