Industrial Trucks, Tractors, Trailers, and Stackers

SIC 3537

Industry report:

This classification comprises establishments primarily engaged in manufacturing industrial trucks, tractors, trailers, stackers (truck type), and related equipment used for handling materials on floors and paved surfaces in and around industrial and commercial plants, depots, docks, airports, and terminals. Excluded from this classification are establishments primarily involved in manufacturing motor vehicles and motor vehicle type trailers, which are classified in SIC 3710: Motor Vehicles and Motor Vehicle Equipment, and those manufacturing farm type wheel tractors, which are classified in SIC 3523: Farm Machinery & Equipment. Also excluded from this industry are establishments primarily engaged in manufacturing tractor shovel loaders and track laying tractors, which are classified in SIC 3531: Construction Machinery and Equipment, and those manufacturing wood pallets and skids, which are classified in SIC 2448: Wood Pallets and Skids.

Industry Snapshot

The industrial truck and tractor industry includes a narrowly defined yet diverse assortment of products that are part of a larger industrial classification commonly known as the material handling equipment industry. This industry in turn forms a part of the enormous U.S. material handling systems industry market ($156 billion in 2009). Equipment within the smaller industrial truck and tractor category is utilized to move, package, and store both finished products and raw materials used to manufacture finished products. Accordingly, industrial truck and tractor products are used in nearly every industrial and warehouse setting; from "big-box" superstores to lumber yards to missile manufacturing installations. These can range from the ubiquitous forklift (there are various kinds of forklifts), to pallet trucks, order and stock pickers, and hand operated trucks. The Material Handling Industry of America (MHIA) classifies these vehicles under the category "mobile and wheeled handling devices" and further divides this category into three subsections: "power operated trucks and components; tractors and trailers (including stackers and pallet trucks for in-plant use); and hand operated trucks, wheels, and casters." Furthermore, the Industrial Truck Association (ITA) classifies industrial trucks into three main categories that contain five classes of truck; electric rider (containing two classes of trucks), motorized hand (containing one class), and internal combustion engine (containing two truck classes).

Industrial truck, tractor, trailer, and stacker machinery system industry shipments increased during the first decade of the 2000s according to U.S. Census data. However, toward the end of the decade the industry was dealing with the effects of the global economic recession. Still, by the beginning of the second decade of the twenty-first century, this industry sector was valued at over $8 billion. Primarily composed of smaller establishments--most employed fewer than 25 people--the greatest concentration of industrial truck, tractor, trailer, and stacker machinery system manufacturing establishments were in California, Ohio, Texas, Wisconsin, and Michigan.

Background and Development

America's entrance into World War II in 1941 signaled the beginning of a four-year surge in business activity that defined the future of many U.S. industries. The frenetic pace of production required to support the country's war efforts rejuvenated some industries, sparked the genesis of others, and launched many more toward exponentially higher production and sales volumes. For the industrial truck and tractor industry, the dramatically increased demand for manufactured goods created a commensurately heightened demand for material handling equipment; as the country manufactured more products, there was a growing need to move, stack, and store them quickly and efficiently. Consequently, the industrial truck and tractor industry was swept up into the expansion of U.S. industry as a whole, benefiting from the increased business activity enjoyed by the individual companies it served.

Augmenting this demand from the industry's traditional industrial customers was a vast government market that opened up during the war, as industrial truck and tractor manufacturers answered the sundry material handling needs of the military. The combination of these two factors fostered a rapid growth rate for the industry, amplifying the importance of industrial truck and tractor products in the successful operation of any manufacturing plant or military installation. During this period, truck and tractor products enabled manufacturers to approach production and sales volumes proportionate to levels recorded 50 years later, in the 1990s. Though its foundation was established before the war, the industry's modern structure was not fully defined until the 1950s and 1960s, when industrial establishments nationwide were transformed by the trend toward automation.

The robust growth experienced as a result of the war and the increased applications for the industry's products, prompted by the automation of U.S. industry following the war, meant years of growth for the industry, a period during which industrial truck and tractor manufacturing companies began to record production and sales levels that distinguished the industry from other segments within the material handling equipment industry.

In the early 1960s, the sale of industrial trucks and tractors and related products accounted for approximately $389 million of the nearly $1 billion generated by the material handling equipment industry. The leading manufacturers involved in the industry at this time were primarily publicly held companies engaged in the manufacture of other products included in the material handling industry, such as conveyor and monorail systems, but derived the majority of their revenue from the sale of industrial truck and tractor equipment, particularly from the sale of forklifts. Clark Equipment Co., the largest of these manufacturers, posted annual sales of approximately $200 million in the late 1950s and early 1960s, far exceeding the sales volumes of its nearest competitors. These competitors, however, compensated for their more diminutive size by developing industrial truck and tractor equipment for more diverse applications, focusing on manufacturing equipment that increased efficiency in the industrial workplace.

Initially, the pace of the industry's growth was largely determined by the amount other businesses were spending on capital expansion, but by the early 1960s, U.S. industry as a whole began to focus on increasing the efficiency of manufacturing facilities. Manufacturers realized that industrial truck and tractor equipment could help them make great strides toward this goal. Decreasing the turning radius of a forklift, for example, allowed a manufacturer to reduce the distance between storage aisles and therefore increase inventory space without realizing any increase in land costs. Accordingly, many manufacturers, both large and small, were developing industrial truck and tractor products during the early 1960s that would eventually become integral components of modern manufacturing establishments.

Despite its relatively unimpressive revenue total of $49 million in 1960, Hyster Co. of Portland, Oregon, was, nevertheless, contributing to the industry's technological advancement by designing prototypes of forklifts that automatically weighed loads to be lifted and adjusted their operating speed accordingly. If a load was light, this sensing system enabled the forklift to operate at a higher speed than was normally achieved by earlier forklifts that operated at set speeds, regardless of load weight. Similar advancements were being made by other manufacturers. For instance, Barrett-Cravens Co.'s "Guide-o-matic" system controlled industrial tractors by a buried wire, enabling them to function without an operator.

The popularity of innovative products such as these fueled the industry's growth during the 1960s, as manufacturers increasingly began to look toward the industrial truck and tractor industry for solutions to problems associated with moving, stacking, and storing their manufactured products, and to aid in their move toward automated operation. This represented a significant shift in the nature of the needs that this industry's products filled. Instead of supplying equipment solely to manufacturers expanding the size of their plants, industrial truck and tractor manufacturing companies now could rely on business from companies that were streamlining their operations or automating their production processes.

Along with its move toward manufacturing more sophisticated products and designing complete material handling systems, the industry was enjoying increased demand for its newly developed large steel and aluminum containers. "Containerization," or the utilization of trailer-sized steel and aluminum containers for shipping purposes, was, in the early 1960s, one of the relatively recent innovations developed by the industry to help its customers cut costs. These containers, sometimes referred to as "ambulatory vaults," had been used by an increasing number of manufacturers in the 1950s because they reduced handling costs and allowed for quicker delivery.

Two developments in the early 1960s ensured that manufacturers could continue to rely on large containers to generate additional business. In early 1961, industry-wide standards were established for the production of containers, specifying that all containers in the future must be 8 feet in width and height and either 10, 20, or 40 feet in length. Following the establishment of these specifications, the Federal Maritime Board ordered that only ships built to accommodate these new, standardized containers would be eligible for government subsidies or government-insured mortgages.

By the mid-1960s, the industry's annual value of shipments had surpassed $500 million, making it the largest segment within the overall material handling industry. Growth continued to be spurred by the industry's development of innovative products, which persuaded some of its customers to apportion a larger percentage of their capital investment budget toward material handling needs, and others to scrap their existing machinery and invest in more sophisticated equipment. A considerable amount of the industry's growth, however, came through capital expansion programs initiated by its customers. While this presented no problem to industrial truck and tractor manufacturers when economic conditions were particularly favorable, this dependency on the health of the U.S. economy in general made the industry vulnerable to general economic downturns.

By the close of the decade, however, the overall U.S. economy had proven strong enough to support the continued growth of the industrial truck and tractor industry. Revenues exceeded $1 billion by 1970, representing an average annual growth rate of greater than 11 percent during the previous decade. While no single dramatic technological advancement launched the industry toward higher revenues, each year customer demands were stimulated by new products that incorporated innovative designs and functions.

Over the course of the next several years, as the nation's economy spiraled downward in reaction to a shortage of oil and petroleum products, the industrial truck and tractor industry's performance began to flag. The industrial sector of the U.S. economy operated below capacity throughout the recession, causing the cancellation or postponement of many manufacturers' expansion plans. Because these investments represented a major source of industrial truck and tractor manufacturers' revenues, business faltered, demonstrating the volatility of the industry's market. With the industrial sector of the nation's economy operating at 70 percent of its capacity, the industrial truck and tractor industry's revenues dropped from $1.53 billion in 1974 to $1.30 billion in 1975.

The industry slowly recovered from the losses of the early and mid-1970s, generating revenues of $1.9 billion in 1977, and by the end of the decade, revenues skyrocketed to nearly $3.0 billion. This growth, however, masked the emergence of a pernicious force that threatened to derail the industry's leading companies from their meteoric recovery.

For years, industrial truck and tractor manufacturers' command of the U.S. market was virtually unassailable; foreign manufacturers were relegated to producing inexpensive equipment and left the manufacturing of higher priced, more sophisticated equipment--which was by far the more lucrative segment of the global industrial truck and tractor market--to American companies. But by the late 1970s, domestic manufactures had become lulled into complacency by decades of dominance, and foreign manufacturers, particularly the Japanese, began to woo customers away from U.S. manufacturers. Ironically, the reason for this rise in demand for Japanese products was attributed largely to the success domestic manufacturers enjoyed for the previous several decades. Each year, new designs and features were incorporated into U.S.-produced equipment, creating an assortment of highly sophisticated equipment by the late 1970s. The incremental advances in technology had, by this time, spawned equipment too advanced and too costly for the basic material handling needs of U.S. industries. Concurrently, an increasing number of industrial truck and tractor customers found the cheaper Japanese equipment suitable for their basic material handling tasks, a revelation that led to reduced operating costs for customers and to an erosion of U.S. industrial truck and tractor manufacturers' market share. American truck and trucking equipment had simply become too sophisticated for the needs of its average customer.

By the early 1980s, the price advantage afforded to purchasers of Japanese industrial truck and tractor equipment widened to as much as 30 percent. Still, in the face of this trend toward more inexpensive, less sophisticated equipment, U.S. manufacturers were slow to respond. As conditions worsened, domestic manufacturers attempted to stave off mounting foreign competition by designing even more sophisticated products, which further aggravated their losses. Clark Equipment Co., for example, spent $25 million on the design of a high-technology lift truck equipped with oil-cooled brakes that failed miserably when it was introduced in 1982.

When the U.S. forklift market plummeted in 1982 and 1983, many domestic manufacturers were poorly positioned to sustain further losses. Caterpillar Inc., bereft of its once commanding lead over the industry, sought cheaper manufacturing sites for its production of industrial trucks and tractors, and, in 1983, the company moved the majority of its lift truck production to Korea under the aegis of a South Korean company, Daewoo Heavy Industries Ltd. Similarly, Clark Equipment relocated from Michigan to more inexpensive Kentucky, and, in 1986, Clark eventually followed Caterpillar's lead by signing a ten-year production accord with Samsung Group in Korea.

Among the industry's leaders, Hyster Co. was the one notable exception to domestic manufacturers' disregard toward the shifting market demands. Introducing an inexpensive "XL" line of forklifts in 1981, which matched the Japanese in terms of price and accounted for $44 million in sales in 18 months, Hyster avoided the debilitating losses suffered by its largest competitors. Moreover, Hyster revamped its design, engineering, and manufacturing methods to emulate the cross-functional and more efficient style of Japanese production, enabling the company to manufacture as many industrial truck and tractor products by the end of the 1980s as it had ten years earlier, with half as many employees. Consequently, Hyster was the only U.S. industrial truck and tractor manufacturer among the industry's three largest producers to remain profitable during the 1980s, further underscoring the imprudence of Clark Equipment's and Caterpillar's continued focus on producing technologically advanced equipment in the early 1980s.

The relocation of key manufacturing responsibilities to Korea by Clark Equipment Co. and Caterpillar failed to arrest the plunge of their integral forklift operations. Korean wages tripled during the 1980s, erasing any benefits that would have been otherwise realized by relocating, and the dollar declined 24 percent against the Korean won between 1986 and 1989, further increasing the severity of their losses. By the early 1990s, the cumulative effect of the previous decade's failures forced Clark Equipment and Caterpillar Inc. to divest their core industrial truck and tractor businesses. In 1992, Clark Equipment sold its forklift operations to Terex Corp. for $95 million. Later that year, Caterpillar signed a joint venture agreement with Mitsubishi Heavy Industries Ltd. that ceded 80 percent of its forklift business to the Japanese company.

The industrial truck and tractor industry adjusted slowly to the changing needs of its customers as it entered the mid-1990s. Sparked by the recessive economic conditions of the early 1990s, the U.S. industry as a whole experienced changes, and many businesses reduced their workforce and streamlined their operations, leading to greater operating efficiencies.

The concerted movement toward manufacturing a proportionately higher number of electric lift trucks, initiated by the Japanese in 1992, prompted a parallel response by U.S. manufacturers. These electrically powered lift trucks were more profitable for industrial truck and tractor manufacturers than gas-powered lift trucks and became the industry's most popular product in the mid-1990s.

Forklift manufacturers also made changes. According to Beverage World, the forklift companies compete fiercely with each other. Consequently, the electric forklift was in a constant state of flux as each manufacturer regularly improved and updated its products, creating a "quality through competition" mentality for forklift manufacturers. This continuing trend ensures better products and greater customer satisfaction.

In the early 1990s, the worldwide lift truck market grew by approximately 30 percent, or 100,000 units, but the market softened in 1996; the North American market declined by an estimated 13,000 units, 8 percent, that year. An estimated 447 companies in the United States were involved in manufacturing industrial trucks and tractors in 1996. These companies generated $3.7 billion in revenues for products included in this classification. This figure represents an aggregate value of shipments largely derived from the production of forklift trucks and other work trucks fitted with lifting or handling equipment machines--the largest product group within the industry. Industrial trucks, tractors, mobile straddle carriers and cranes, and automatic stacking machines accounted for 67.1 percent of the value of the industry's total shipments. Of these, self-propelled, electric-powered forklift work trucks accounted for 27.2 percent, and liquid petroleum gas motor-powered accounted for 16.8 percent. Self-propelled non-riding forklift and other work trucks fitted with lifting or handling equipment accounted for 10.4 percent. The other primary product group was comprised of parts and attachments for industrial trucks and tractors, which composed 21.7 percent of the industry's total shipments. In 1997, the 461 establishments in this industry employed 25,953 people and shipped $5.53 billion worth of products.

Figures from the Industrial Truck Association (ITA) showed a marked improvement in unit shipments of all classes of industrial trucks from 2002 to 2005. According to the ITA, unit shipments of factory trucks reached a peak in 2000 (the highest in a 15-year period starting in 1985), and then dropped sharply in 2001. Shipments dropped again in 2002, but from that year forward started to climb again. In fact, by 2005, unit shipments were approximately 10,000 units below the 2000 record year level (191,204 verses 180,535 units). Following a 20-year trend, of the three ITA categories of industrial trucks, internal combustion engine trucks (83,725) by far had the most units shipped in 2005, compared to 50,604 electric rider truck units and 46,206 motorized hand truck units.

The value of industrial truck, tractor, trailer and stacker machinery manufacturing shipments reached $9.21 billion in 2007, according to U.S. Census Bureau data. This figure was substantially higher than the 2004 shipment value of $6.68 billion and the 2002 value of $5.10 billion. These numbers reflect the overall slow but steady improvement that the U.S. economy underwent from the downturn in the early 2000s, as well as the strength of the material handling equipment manufacturing market that also steadily grew during those years. By late in the decade, however, the economy had entered a recession that would affect every facet of the U.S. manufacturing industry.

Current Conditions

According to the Industrial Truck Association (ITA), by 2010 the manufacture of industrial trucks, tractors, trailers, and stackers in the United States was beginning to recover. Production was up in all three categories designated by the ITA (electric rider, motorized hand, and internal combustion engine) in 2010 as compared to 2009, although the figures were still far below the record levels of the year 2000. For the electric rider category, for example, U.S. factory shipments rose from 28,409 units in 2009 to 31,759 in 2010. Production in the motorized hand category increased from 28,635 units in 2009 to 36,637 in 2010, and figures for internal combustion engine trucks were up from 28,740 in 2009 to 36,896 in 2010.

Statistics from Dun and Bradstreet also showed positive signs for the industry's recovery. Total sales in the industrial truck and tractors manufacturing industry in 2010 reached $8.1 billion, generated by 1,530 establishments employing 30,747 workers. Ohio was by far the number one state in terms of revenues, accounting for almost 57 percent of total sales in 2010. Other states that contributed significantly included New York ($970.8 million), Oregon ($452.6 million), and Texas ($385 million). Ohio was also home to the most employees in the industry, followed by Texas, North Carolina, Illinois, California, and New York. The largest categories of products included forklifts, with $2.9 billion in sales and 4,930 employees; lift trucks, with $2.4 billion in sales and 6,721 employees; and industrial trucks and tractors, with $1.6 billion in sales and 8,729 employees.

Industry Leaders

Caterpillar Inc. of Peoria, Illinois, was the industry leader with $42.5 billion in 2010 sales. The company's subsidiary, Mitsubishi Caterpillar Forklift America Inc. (MCFA), contributed $99.5 million and produced a line of material handling lift trucks that were distributed under the company's well-known CAT trademark, and it manufactured and sold its forklifts using the Mitsubishi Forklift label. Both the company's forklift and lift trucks were manufactured in Houston, Texas.

Other important players in the industry included NACCO Material Handling Group (NMHG), a subsidiary of NACCO Industries Inc., which had 2010 sales of $2.6 billion. NMHG, based in Portland, Oregon, manufactured and distributed its lift trucks using the Hyster, Yale, and Sumitomo-Yale labels. The Raymond Corp. of Greene, New York, manufactured a line of forklift, stacker, order picker, and pallet trucks. It had 2010 sales of $464 million and 2,260 employees. Crown Equipment Corp. of New Bremen, Ohio, manufactured a line of products that included forklifts, stackers, pallet trucks, and stock pickers. This private company had 2010 sales of $754.9 million with 7,456 employees. Clark Material Handling Co., based in Lexington, Kentucky, had 2010 sales of $22 million. Its forklifts were sold throughout the world in 500 dealerships. In 2003, Clark was purchased by Young An Hat Co. Ltd., a South Korean company. The other major lift truck manufacturers with operations in the United States in the early 2010s also were foreign owned and included the German company Linde Lift Truck Corp. and the Japanese companies Toyota Material Handling U.S.A. Inc., Nissan Forklift Corp. North America, and Komatsu Forklift U.S.A. Inc.


Of the people employed by the industry in the early twenty-first century, most were production workers; the remaining employees performed technical, managerial, or administrative duties. Unlike most manufacturing sectors in the United States, employment in this industry did not show a huge decline through the 2000s and into the 2010s. In 1999 there were 26,933 employees in the industry, and, according to figures from Dun and Bradstreet, there were 30,747 employees in 2010. Typically, production workers were employed on a full-time basis. Average hourly wages of workers in the industrial truck and tractor industry were slightly higher than those of workers in all other manufacturing industries. For example, in 2007, production workers in the industrial truck and tractor industry earned an average hourly wage of $18.95, according to the U.S. Census Bureau.

Prospects for the industry's workforce, however, were bleak, according to U.S. Bureau of Labor Statistics (BLS) projections. Between 2008 and 2018, the overall employment in "other general purpose machinery manufacturing" (which makes up 23% of the machinery manufacturing workforce and under which industrial trucks and tractors and other classes of materials handling equipment is grouped), was projected to decrease by almost 9 percent. All occupations in machinery manufacturing were expected to decrease by 7.6 percent during those years. The management, business, and financial occupations in the machinery manufacturing sector was expected to fall by 6.7 percent, whereas office and administrative support staff such as bookkeepers was predicted to decline by 10.5 percent. Production worker numbers would fall by 7.4 percent, according to the BLS Career Guide to Industries.

America and the World

In the late twentieth century, U.S. manufacturers of industrial trucks and tractors faced increased competition from foreign manufacturers, which posed the greatest threat to the industry's future. For years, U.S. manufacturers held the domestic market largely to themselves; businesses in need of industrial truck and tractor equipment generally shied away from purchasing products manufactured abroad, fearing a lack of spare parts and service. By 1970, imports accounted for a mere $13 million of the $1 billion U.S. industrial truck and tractor market. Moreover, the $13 million recorded by foreign manufacturers in 1970 reflected a 72 percent increase from the total posted two years earlier. Likewise, U.S. manufacturers explored profit potentials overseas. The value of U.S. exports neared $100 million a year, with parts and complete trucks and tractors being shipped to Europe, South America, and Asia.

By the end of the 1970s, however, the commanding position that U.S. manufacturers held over foreign manufacturers was reversed, largely due to the gains achieved by Japanese manufacturers. By concentrating on supplying inexpensive yet sturdy industrial truck and tractor products, the Japanese were able to secure a formidable presence in the U.S. market. Competition became fierce, leading one of the few large U.S. manufacturers of industrial truck and tractor products that fared well during the 1980s, Hyster Co., to petition the International Trade Commission in 1986, charging that Japan was selling equipment in the United States at prices below the cost of production. Two years later, the International Trade Commission ruled in Hyster's favor and applied import duties of up to 51.3 percent to Japanese products entering the U.S. market. Although these import duties provided a much needed respite from increasing Japanese competition, Japanese manufacturers began establishing assembly plants in the United States soon after the ruling to circumvent the tariff payments. Entering the 1990s, the Japanese continued to maintain a roughly 50 percent share of the U.S. market.

Since the late 1990s, the United States has been importing more material handling equipment than it has been exporting, according to the U.S. Department of Commerce's International Trade Administration. In 2001, for example, the U.S. had $3.0 billion in imports of material handling equipment, and $2.5 billion in exports, with Canada, Mexico, the United Kingdom, the Netherlands and France being the largest export markets that year. Also that year, of the industry's four main sectors, the industrial truck, tractor, trailer, and stacker machinery manufacturing sector had the most exports, according to the Trade Administration. This sector of the industry actually saw its exports gradually increase from 1998 to 2001, when it had $1.5 billion in exports. Then, exports dropped to $1.2 billion in 2003, according to Trade Administration export data.

However, material handling equipment exports increased between 2001 and 2005, according to U.S. Census Bureau statistics reported by the Material Handling Distributors Association (MHEDA). By 2005, exports had grown to $3.2 billion, with imports that year totaling $4.7 billion, a net import value of $1.5 billion. Because industrial truck, tractor, trailer and stacker equipment form a portion of these exports, these figures were a positive indicator that exports for this industry were also rising (although these export numbers do not differentiate between U.S. companies and foreign-owned companies that have manufacturing facilities within the United States).

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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