Making Material Handling Great Again

Making Material Handling Great Again

Are the material handling industry's best days behind it, or is the best yet to come?

In case you haven't noticed, 2016 is an election year, bringing with it all the usual punditry about what will happen to the country if such-and-such happens and if So-and-So is elected President. The United States seems to be caught in an eternal closed-loop cycle where every four years, the country finds itself facing "the most important election of our lifetimes," with all that we hold near and dear threatened by the chance that the wrong people will ascend to public office, which would lead to cataclysmic ruin and chaos. And yet somehow, no matter who ends up getting elected, the country still manages to struggle on, occasionally bending but never quite breaking.

The material handling and logistics industry itself tends to follow a four-year business cycle that basically reflects the state of the economy. For many years now, the MHI trade association has compiled market data related to the purchase of material handling equipment, and while from day to day or week to week there doesn't seem to be much rhyme or reason to the vagaries of the market, when that data is mapped over a period of years and decades, an unmistakable trend emerges. As a quick glance at the accompanying chart (used for years by MHI) illustrates, there are four stages to this material handling business cycle, with each stage lasting about a year, more or less: accelerating growth followed by decelerating growth, followed by accelerating decline and then decelerating decline. And then the cycle repeats itself.

So what's the outlook for 2016, then? Well, let's look first at 2015. According to Jason Schenker, an analyst with Prestige Economics who conducts market studies for MHI, last year was one of the best in recent memory for material handling equipment sales, as the industry saw near-historic highs for new orders and domestic demand. So much for the good news.

The outlook for 2016, Schenker predicts, is that we will probably see a modest slowdown in equipment sales. As the global economy improves, it will be the United States that takes a hit (largely due to the strength of the U.S. dollar). What's more, given the uncertainty over the coming elections and the cyclical nature of the U.S. economy in general, a recession in the next year or two is probably inevitable.

In other words, if your yardstick is limited solely to equipment sales, then you might conclude that the material handling and logistics industry is on the decline. But just as politicians gloss over a lot of details on their way to making dire proclamations, so too is any so-called "decline" of the material handling industry not only overstated but downright false. Perhaps now more than ever, the nation—in fact, the world—depends on well-oiled and managed supply chains to get products and materials from here to there.

Sure, the popular media loves to focus on driverless trucks and delivery drones and warehouse robots, but it's the people of the industry who are developing these innovations, and no manner of innovation will ever replace a human being when it comes to ingenuity and customer service.

My contention is this: Over the course of the 70+ years that this magazine has existed, material handling has never ceased to be great—neither the industry nor the profession. Sure, there are plenty of problems that material handling and logistics professionals have to confront every day—onerous government regulations; the difficulty in attracting, training and retaining staff; keeping pace with increasing demands of customers; rising costs across the board—and yet the industry keeps developing trend-setting solutions for every problem it faces. Probably the best single-word adjective for the industry is resilient.

So in the spirit of continuous improvement, and with no apologies to certain slogan-spouting politicians, I suggest that our industry motto should be: Make Material Handling Greater than Ever.

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