The last few years have been a period of unprecedented flux for the world as a whole, and the electric forklift industry and logistics was no exception. First, the pandemic and lockdowns caused an enormous backlog of production in industrial centres, then the economic ramifications led to drops in demand, and now geopolitical instability in Eastern Europe looks set to produce even more logistical issues – the now-infamous images of cargo ships queuing up outside major ports speak for themselves.
So what does all of this mean for the electric forklift industry? What does 2022 hold for the sector, and are there wider trends in warehousing overall which might impact it? In this article, we’ll look at some of how electric forklifts will continue to grow and develop, within the context of warehousing and logistics.
Business is booming for the electric forklift industry
A recent report by a respected market body makes it clear that this sector is set for stratospheric growth over the next few years. It’s estimated that the global market size for electric forklifts will reach $28,130,000,000 in 2028 – larger than the entire Cypriot or Cambodian economy! This growth looks set to be uniformly distributed across the period, meaning that 2022 will be a highly profitable year for electric forklift manufacturers.
What’s driving this growth? There’s a range of factors at play, but two of the most important are the logistics boom in general and the push towards net zero. Since the COP27 summit in Glasgow, there’s been a renewed campaign to end global reliance upon fossil fuels. Although government policy will be an important factor in this, equally important is the desire of companies and their investors to clean up their entire supply chains, whether to satisfy ESG conditions in their finance documents or to appeal to more ecologically-conscious customers. This means that a lot of general commercial firms are putting pressure upon warehouse operators and logistic firms to reduce their carbon footprint – and one easy way to do that is to move from diesel forklifts to electric ones.
Coupled with this, the warehousing sector is in a strongly growth-orientated phase currently. With old warehousing systems struggling to cope (as discussed above), business owners are funnelling millions into upgrading their logistics systems to handle shocks like the ones experienced by the global economy for the last few years. This ranges from the construction of new port and warehouse infrastructure to share the burden, to updating antiquated technology in existing sites. All this will be necessary as the global economy increases its reliance upon cross-border trade from low-cost countries to high-income ones – a trend which even the pandemic has shown no signs of reversing .
New geographies will become relevant to the sector
Traditionally the electric forklift market was fairly limited in territorial scope. Manufacturers tended to cluster around a small number of countries – China, South Korea and Germany principally – and users were also predominantly from Western Europe and North America. However, the last year has seen substantial growth in newer areas. For example in April 2021 Godrej Material Handling – an Indian company – launched its new Uno Electric Forklift truck. This pioneering design has won plaudits from users for its outstanding performance and reliability and is likely to contribute to India becoming central to the electric forklifts market.
As well as India, there are signs that Germany is finally growing a healthy domestic industry. Considering the importance of Germany to global logistics as well as its enormous industrial capacity, it’s somewhat surprising that its electric forklift sector has been undersized for years. However with a number of major announcements by German manufacturers in 2021 – most notably Kion Group announcing new factories in China and Poland – Germany looks set to leverage its pre-existing industrial strengths and grow.
In terms of markets where electric forklifts are being deployed, the locations of the new factories mentioned above are instructive. China too is beginning to contemplate a pathway away from fossil fuels, meaning that demand for electric forklifts is likely to grow there (boosted by the fact that China remains at the hub of global logistics). But there’s also likely to be overspill into other markets where manufacturing is key – Eastern Europe remains important here, as does South East Asia.
Warehousing will remain a dynamic sector
As discussed, 2021 has been a year of tremendous uncertainty in the logistics space. As we consider 2022 and beyond, it seems clear that the major stressors which caused this uncertainty – spiralling energy costs, unexpected coronavirus variants, limited resources left in the toolkits of central banks, and geopolitical instability in key areas – are not yet going anywhere. Whilst this is naturally concerning, it also means that warehousing will continue to attract capital investment (including the upgrading of machinery like forklifts), and stay a key part of the world economy.
One often-neglected aspect of warehousing is the importance of data and automation going forward. Logistics companies have had a difficult year, with narrower margins and high labour costs. They will be looking to automate as much as possible and rely on “smart” systems to ensure that warehouses can be utilised with maximum efficiency. This dovetails neatly with the use of electric forklifts and points to a future where warehouses will move away from their old reputation and become clean, green and high-tech hubs of economies in all parts of the world.
For more information about electric forklifts and how you can prepare your company for the logistical trends of 2022, get in touch with our team today.