By Chris Aiello — TVH Parts Co.
I was talking to a General Manager of an OEM lift truck dealership the other day in a major metropolitan market. He told me they had just increased their service labor rates. I couldn’t believe it when he told me they were up over $200 per hour. That starkly contrasts the days when breaching the $100 per hour rate seemed like a daring move. Additionally, he told me they charge a flat 1.5 hours for travel, with a minimum of one hour of work—$ 500 minimum for any retail service job.
For material handling dealerships and their customers, these rising rates are a double-edged sword—essential for sustaining skilled labor but challenging for customers’ budgets. Our industry is tasked with finding ways to address the growing financial strain with proactive solutions that maintain customer satisfaction and loyalty.
Higher labor rates can certainly be a pain point for your customers. Let’s examine some actions dealers can take to alleviate these pain points while allowing their businesses to thrive and remain competitive. Some might already be familiar with these strategies, while readers newer to the industry might find this useful.
Understanding the Customer’s Perspective
From a customer’s standpoint, the surge in labor rates raises several concerns:
- Sticker Shock: Customers accustomed to lower rates may experience immediate resistance to invoices reflecting the high per-hour repair rates.
- Unpredictable Costs: Forklift repairs can be sporadic, making it difficult for them to budget effectively.
- Risk of Deferred Maintenance: High costs may prompt customers to delay essential services, increasing the likelihood of equipment breakdowns and unplanned downtime.
By understanding these pain points, dealerships can better position themselves as partners in solving—not contributing to—these challenges.