MHEDA WELCOMES NEW MEMBERS

Welcome to new Distributor Members Logix Conveyor & Palletizing Systems of Mississauga, ON, Canada (Michael Moar, general manager), and WEI-Warehouse Equipment, Inc. of Elk Grove, IL (Kevin Ambrose, president/CEO).

BREAKING NEWS

Manufacturing and Sale of Equipment Increases
During 1^st Half of 2003

The latest economic data reveal good news both for material handling equipment companies as a whole, and for conveyor equipment manufacturers in particular. According to recently released data from the Material Handling Industry of America in its Material Handling Equipment Manufacturing (MHEM) Forecast, MHEM is growing at a rate of over 8% as of this year's second quarter, compared to the same period for last year. The MHEM forecast is for 7-8% annual growth as of the end of this year.

The forecast for continued manufacturing growth is bolstered by a string of recent positive broad economic indicators: the Purchasing Managers Index (PMI), considered the most accurate indicator of overall factory production, has been over 50 for two consecutive months, indicating expanding production; and the PMI is at its highest level since last December. In addition, both U.S. Industrial Production and the Consumer Price Index showed increases in the 3^rd quarter, at 0.2% and 0.3%, respectively.

Perhaps most importantly, the Commerce Department's just-released third quarter Gross Domestic Product (GDP) figures show a 7.2% increase in this key economic yardstick. This spurt marks the fastest U.S. economic growth in nearly 20 years and has most key economists predicting a stable trend of growth over the next year. While the third quarter growth was broad based, involving various sectors of the economy, one key element was the sharp rise in business investment. This third quarter rise of 11% in annual growth is the highest jump in business investment since the economic bubble peaked in early 2000.

Specific data released by the Conveyor Equipment Industry show positive results for the 1^st half of 2003 as well. The Conveyor Equipment Manufacturers Association (CEMA) reports an increase of 3% in total new orders over this period. Shipments were increased by 22% for bulk conveyor equipment, although down 11% for unit handling equipment. CEMA leaders attending the September 2003 Association Conference in Chicago expressed confidence that equipment orders and shipments would continue to improve through year's end.

FCC Postpones Fax Ban

On October 3, the Federal Communications Commission (FCC) issued an order postponing the effective date of its proposed restrictive definition of Established Business Relationship (EBR) as it applies to the sending of unsolicited commercial faxes. This new definition will not take effect until either the FCC makes a decision in response to Petitions for Reconsideration, or January 1, 2005, if no such decision is made. This postponement brings the redefinition of EBR into accord with the Commission's postponement of the effective date of the rest of the regulations related to commercial faxes which were issued on July 25. For more information, click here.

Logistics Outsourcing Continues to Grow

With the economy in slow recovery mode and equipment sales on the mend, distributors are focusing attention on the lucrative market for aftersales service and logistics consulting. A study just released at the Council of Logistics Management annual meeting reveals that 78% of North American logistics and supply chain executives report outsourcing their logistics needs, or using third-party logistics (3PL). Among the most widely outsourced 3PL services are inbound and outbound transportation, and warehouse management. The study stresses that as product life-cycles continue to get shorter, supply-chain management and material handling equipment service have become crucial to manufacturers' adaptability and overall efficiency; and distributors demonstrating versatility in their services can grow even in these less than optimum economic times.

Fuel Cell Forklift Makes Debut

The first fuel cell forklift was unveiled in a project at Germany's Munich Airport. The forklift, which provides the same power performance and overall features of a traditional truck, has the distinct advantage of a vastly reduced refueling time – a period measured in minutes compared to the several hours required to reload a standard forklift battery – according to research by Proton Motor. Proton Motor, one of Europe's leading companies for fuel cell technology, has designed fuel cells for automobiles (including Volvo) and buses, and is leading the forklift project in conjunction with Linde AG and Still GmbH. The project at Munich Airport will see the new forklifts operated under normal conditions in the cargo area of the airport. Results of drivability, ease of use and lifetime will be closely monitored and examined.

More Good News

Data released last week by the National Mail Order Association contain good news for material handling distributors. While many big American retailers continue to increase their off-shore product sourcing, mail order marketing companies are searching for products made in America. According to participants in the Catalog Age Benchmark Report on Merchandising, the U.S. is still the number one place that catalogers turn to when sourcing and manufacturing merchandise, with 89% rating the U.S. highly as a sourcing locale. Domestic-made goods represent, on average, over 70% of dollar sales volume for these surveyed catalogs. The U.S. also remains the most popular place to manufacture or contract for the manufacture of products. Among the 78% of catalog respondents that manufacture or contract for manufacture, nearly all do so in the U.S. The Far East has lost ground with catalogers, with only 19% of respondents manufacturing there, down from 24% in 1999.

INDUSTRY BEAT
(what people are talking about)

Jeff Buettner

Third Generation Joins Shipping Utilities (St. Louis, MO) • Jeff Buettner was named a sales representative at Shipping Utilities in St. Louis and will be responsible for the southern St. Louis territory. Jeff joined the company in June 2003, working first in parts and service. Jeff is the grandson of the founder, John G. Buettner and is a third-generation family member to work for the company.

Industrial Tool & Material Handling Adds Line (Mooresville, IN) • Eric Strohmeyer, vice president and CFO of Industrial Tool & Material Handling, is not afraid of the challenges of a rough economy. To increase sales, the company recently added a new forklift line, Heli, which is manufactured in China and distributed by Heli Forklift America. IT&MH will also launch its first Web site at the beginning of December.

Goodwin Joins Storage Solutions (Knoxville, TN) • Tony Goodwin, formerly of Shafer Systems, is the new sales representative for Storage Solutions. Goodwin will be based in Nashville and will cover the middle and eastern parts of Tennessee.

Arbor Material Handling Moves (Willow Grove, PA) • Arbor Material Handling moved to a new 40,000 sq. ft. facility in early October, doubling the area of its previous facility. Arbor President David Bennet notes that the new facility is ideal to accommodate the growth Arbor is experiencing, including an 8% increase in staff over the past year. Bennet calls the newly furnished facility "bright and cheery, and therefore more welcoming to customers." Arbor Material Handling is now located at 2465 Maryland Road, Willow Grove, PA.

(l-r) Applied Handling Sales Reps Ryan Dillingham and Bob Williams team up with Rite-Hite's Dave Elliot and Grant Leum to talk about the Thin Man truck leveler with customers Michael Turnbull and Parm Girn

Applied Handling Hosts "Productivity on Display" Event (Dearborn, MI) • Applied Handling played host to over 200 visitors at its recent "Productivity on Display" customer event, which featured a range of new products geared toward improving efficiency and increasing productivity at the loading dock. "The outcome was very positive," says Applied Handling President Bruce Bacon. "There's a lot of new equipment on the market that wasn't available five years ago...products which are much more innovative and more tailored to what the customer wants." Applied Handling hosted a number of vendor demonstrations for its key customer representatives concerning the ins and outs of improving productivity.

OKI Systems Continues to Grow (Cincinnati, OH) • Due to market growth, OKI Systems Ltd. is building two new facilities: a 20,000 sq. ft. facility in Evansville, IN, and a 40,000 sq. ft. one in the Columbus, OH, area. In addition, OKI's Lexington, KY branch will be expanding into a larger space in its current complex to meet growing customer needs.

Cascade Completes Purchase of Roncari (Portland, OR) • Cascade Corporation completed the acquisition of Roncari S.r.l. Cascade, which manufactures lift truck attachments, forks and accessories, paid $6.5 million in cash for the privately owned Italian lift-truck equipment maker. Roncari employs 70 people and sees annual revenues of approximately $12 million.

SALES SUCCESS STORY

Give Me a T! M! H! N! C!  What Have You Got?  Success!

As the 2003 football season approached, the Oakland Raiders made plans to open a new 26,000 sq. ft. distribution center located in San Leandro, California. The new distribution center was to service the Raider Image retail stores and e-commerce sales. The Oakland Raiders knew what to expect when they passed the ball to Toyota Material Handling Northern California’s (Hayward, CA) Systems Group Manager Larry Goodall and Engineer John Andaloft. The distributor had provided the Raiders with forklifts and carriers in the past, and was confident they had the expertise needed to create a win/win situation.

All material handling equipment and systems are painted in the team colors of silver and black.

The distributor duo not only provided the necessary material handling systems, but all of the required upgrades for the permit process, including fire code compliance and structural engineering to meet California’s strict codes for earthquake protection. The distribution center was outfitted with a range of material handling equipment, including flow rack and pallet rack from Interlake Material Handling Solutions, an Ermanco conveyor system, wire mesh decking from ITC Manufacturing and two Toyota lift trucks. To match the Raiders’ signature colors, everything was painted silver and black.

"The distribution center needed to be up and running by mid-September," says Goodall, so the project which was first discussed in April was put on a fast track. Implementation of the $300,000 project started in July and finished in early September, proving that TMHNC has what it takes to be a major player from kickoff to the final pass.

Parts & Service Management Seminar
November 14-15, 2003
Chicago
Attention Parts & Service Managers: If you could increase your GP by ten points would you do it? Are your margins better in 2003 than in 1997? Want to improve them? Then attend MHEDA's Parts & Service Seminar at the Holiday Inn O'Hare International in Chicago. Learn real life, accountable management practices for material handling operations. Review effective Service & Parts procedures. Get into the "How To's." Participate in discussions and ideas exchange. Develop a personal action list to take back. And have fun! Other topics include Service Operating & Occupancy Expense, Shop Floor Control, Dispatching, Planned Maintenance Programs, Lease Maintenance Analysis, Parts Financial Statements, Managing Parts People, Slow Moving Inventory, Consignments, Technology in the Parts Department, Interviewing and Recruiting, and Monitoring Customer Satisfaction. For more details, click here or visit MHEDA online at www.mheda.org.

MHEDA NEWS

2004 Annual Convention & Exhibitors' Showcase "Energize Your People & Heat Up Your Profits" May 1-5, 2004 Loews Miami Beach Hotel Miami, Florida

NEW: "Manufacturer-Distributor Relationship Forum"
Don't forget to mark your calendar for MHEDA's 2004 Annual Convention, May 1-5, at the Loews Miami Beach Hotel in South Beach Miami, Florida. There are a variety of new programs for you to look forward to. One new program, the "Manufacturer-Distributor Relationship Forum," is a series of activities to help facilitate discussion and interaction between material handling industry partners. Activities include…

Hang Tough, MHEDA Members in SoCal
MHEDA extends prayers and thoughts to members located throughout Southern California. "Fall is known as fire season," says Charlie Crew, VP at Hawthorne Lift Systems in San Diego, an area hard hit by the fires, "but this year seems to be one of the worst on record." Several fires are blazing south of San Diego to north of Los Angeles. Some employees working at distributorships have lost their homes. The impact on businesses is yet to be measured. The City of San Diego was shut down on Monday and Tuesday of this past week. MHEDA Members, though, can be counted on to come through in every crisis. Several are offering equipment to help in the disaster.

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