Window of opportunity

The Industrial Truck Association says internal combustion engine forklift sales in 2006 rose to 85,038, the fourth consecutive year of growth in U.S. factory shipments of the largest forklift category in the market.

Patrick Hyland

It’s a vital statistic for our industry, since propane is far and away the dominant forklift engine fuel due to its refueling convenience and preference for use indoors where carbon monoxide exposure is a concern. Obviously, the more forklifts in use, the more gas is being burned to keep them working.

The recent success is a remarkable rebound after sales had tumbled to a 10-year low of 56,000 units in 2002. What’s more, it was done at the onset of the first wave of ever-tougher U.S. Environmental Protection Administration vehicle emissions restrictions.

Based on a recent survey of its members, ITA is forecasting another 5-7 percent jump in sales this year. If you sell propane into this profitable, off-season market niche, you could help push those numbers much higher.

Brand new, cleaner burning propane engines are being hotly promoted by forklift manufacturers nationwide. These vehicles offer reduced levels of carbon monoxide, hydrocarbons and nitrous oxide emissions to meet EPA’s demanding Tier 3 requirements.

What warehouse operators may not know is that, through 2011, they are eligible for tax credits on the purchase of these vehicles as well as on every gallon of fuel they buy. The 2005 Energy Bill provided those incentives to encourage the use of alternative fuels.

The law enables the buyer of an alternative fuel vehicle to receive a credit equal to 50 percent of the incremental cost, and a 50-cent per gallon credit on fuel sold for use in motor vehicles and motor boats. The IRS has since verified that forklifts qualify as an off-highway business motor vehicle, and that the propane they run on is eligible for the fuel credit.

Through the Propane Education & Research Council and the National Propane Gas Association, industry leaders have invested millions of dollars and countless hours developing and marketing new engines and lobbying for the tax breaks that finally became law effective last year.

Now it’s up to propane retailers to capitalize on this exceptional window of opportunity to drive forklift consumption far beyond the 390 million gallons burned each year. Make sure your customers know about the tax breaks. Aggressively chase prospects, explaining how investing in propane can put significant cash in their pocket.

And then start realizing the benefits that the industry has worked so long and hard to provide.

Patrick Hyland

Editor

phyland@questex.com