Insights & Publications

Material Handling Equipment – Global Overview & Valuation Perspective

07 September 2020

‘Material handling equipment’ (MHE) is an extensive term encompassing all tools, appliances, storage facilities and vehicles that are used in industrial facilities to handle storage, control, transport and distribution of various materials and goods. MHE are extensively used in all production stages for boosting productivity through improvement in logistical capabilities within the warehouse setting and manufacturing plants. They provide reliable, efficient and affordable ways to seamlessly store and transfer goods between different warehouses and production centres.

Material handling equipment are generally separated into four main categories:

Engineered Systems
Industrial Trucks
Bulk Material Handling

Material Handling Equipment Market

Material handling is a vital element in the manufacturing sector. Though it has no direct implication on production, it improves efficiency in all aspects such as handling, utilisation, storage, and the subsequent transportation of goods. These machineries boost the production process by ensuring on-time delivery of goods in an efficient manner, which in turn then improves the demand for the equipment with time.

Market Growth – The growth of industrial and other infrastructure ventures to cater to the growing demand from increasing population, and other elements such as research and development in the field of robotics, rapidly developing world of e-commerce, increasing governmental projects etc. are all extremely favorable factors for the growth in the material handling equipment market. There are large influxes of foreign capital to support and improve different industries, and at the same time many governments around the globe are strengthening their infrastructure development plans through the construction of new power plants, airports, ports and railway networks, while also upgrading the existing facilities. The processes in all these industries can be simplified through the use of relevant material handling equipment.

Another factor contributing to the growth and development of the MHE market is the rising concern for worker safety by the employers. Even in the face of rapid industrial development, employers are focused on maintaining the health and wellbeing of their employees to establish their goodwill in the marketplace. There is a shift from production companies towards automation in order to improve overall warehouse efficiency, minimise operational costs and develop a safer working environment for the workers. Hence, the greater importance placed upon worker safety within industries is regarded as another principle force for the growth of the MHE market.

Latest material handling equipment technologies & innovations:

·         Drones – UPS subsidiary Flight Forward Inc. became the first company to attain Part 135 Standard certification from the Federal Aviation Administration. This certificate permits the company to fly an unlimited number of drones with an unlimited number of remote operators in command.

·         Robotics – An automated robotic unloaded introduced by Honeywell International and Siemens in 2020 can operate autonomously using AI inside a tractor-trailer, to pick up and transfer packages

·         Self-Driving Lift Truck – OTTO OMEGA is an easy, safe, and reliable autonomous lift truck for factories and warehouses where production efficiency is valued. Unlike traditional automated forklifts, it is the only lift truck able to react to changes on the factory floor in real time and move around obstacles to ensure timely deliveries.

These are just a few technologies & innovations in the material handling equipment industry, it’s clear that innovation in material handling isn’t slowing down. In fact, if anything, it’s just getting started.

COVID-19 Impact on the Industry

Global Coronavirus pandemic has impacted all industries across the globe, Material Handling Equipment market being no exception. In general, COVID-19 is anticipated to have a negative impact on material handling equipment sales in 2020 as production is slowed or stopped at many manufacturers and customers don’t have the funds to purchase / lease equipment or in some cases the work to necessitate doing so. 

Material handling equipment market size & forecasts

Material Handling Equipment Market

The global material handling equipment market size was USD 194.7 billion in 2018 and was expected to reach USD 354 billion by 2026, at a CAGR of 7.8% over the forecast period, according to a market study report by Fortune Business Insights. Due to the global Coronavirus pandemic, the market growth rate has naturally been impacted negatively; however, it is still too early to make accurate predictions about the extent of the impact in the long term.

Valuations and Appraisals of Material Handling Equipment

A company requires Material Handling Equipment valuation for various reasons, some of which are:

  • Buying – To understand the market value of assets to initiate the buying process.
  • Selling – To identify the correct price before putting up assets for sale.
  • Insurance – Insuring physical assets at correct market value is crucial to the business, hence professional insurance valuations are commonly pursued.
  • Equipment Financing – Financial institutions need valuation for financing and justifying loan amount, so they opt for independent valuations of such equipment.
  • Leasing – Banks and leasing companies require valuation of their assets to determine the current value for their internal management decision making purposes.
  • Financial Reporting – Finance and accounting teams often undertake valuations for purposes such as management of balance sheet and accounting records, auditing, and internal management.

Moreover, valuation of material handling equipment also offers other benefits that include asset verification and estimation of estimated remaining useful life of the asset under consideration.

  1. Asset verification – This involves checking the existence, location, and condition of the asset against an existing inventory list. Knowing what assets are present, where they are located, when they were purchased, if they are still in use, etc. is critical to any organisation.
  • Estimated Remaining Useful Life (ERUL) – The residual life also known as Remaining Useful Life, is the time remaining until an asset ceases to provide the required level of service or reaches the end of its economic usefulness.

With an increase in demand from banks and leasing companies for the independent valuation of Material Handling Equipment’s, ValuStrat is one of the few companies to provide a specialist service for the valuation of material handling equipment’s undertaken by expert RICS certified valuers. The valuations are accurately based on the factors governing the present-day market value. Our reports are based on physical inspections carried out first-hand by our surveyors and facts collected during the survey.

Being a specialist service, it is a proposition offered by our industrial consulting team, a division that brings in a wealth of expertise, knowledge, and understanding of the market. We provide valuation reports that are widely accepted by banks, insurance companies, and private clients throughout the Middle East, Africa, Europe, and Asia.

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