Electric tug vs forklift ROI: cost savings & payback guide

Electric tugs can deliver ROI in as little as 6.4 months by cutting material-handling headcount by up to 60%, reducing forklift-related safety incidents, and removing the ongoing costs of running a forklift fleet (training, certification, insurance, and rental or replacement capex). Switching from a multi-person forklift crew to a single-operator tug setup also reduces handling time and equipment maintenance spend.

Forklifts feel like a fixed cost until you total up what it actually takes to run them safely. Multiple forklift operators, dedicated spotters, ongoing certification, fuel or charging, maintenance, time wasted waiting for licensed driver availability, and the ever-present risk of damage to assets or equipment all add up to a labour and liability bill that was severely under-budgeted.

Electric tugs, like our PowerSteered range, are increasingly replacing forklifts for moving heavy loads on wheels, such as data centre infrastructure enclosures, by allowing a single operator to safely move up to 300,000kg. The question then is around whether it actually pays back and how fast.

Read on for a composite example based on a real-world material handling conversion project, as well as a breakdown you can apply to your own operations.

Why forklift crews cost more than you think

Most ROI conversions are just based on the fact that ‘the tug costs less than the forklift’. But there’s even more to it; there are many hidden costs of using forklifts, and the biggest lies in the manpower requirement.

Moving heavy enclosures or loaded dollies with forklifts typically isn’t a one-person job and usually requires:

• Multiple forklifts to shunt the load

• A certified forklift operator per vehicle
• Dedicated spotters for visibility and collision avoidance
  
• Overlapping shift coverage of licensed drivers to keep operations running

In the case example below, this means three forklift operators plus two spotters to manage the movement of a single enclosure at any time – an entire crew of people to move an enclosure between production stages that could otherwise be freed up to focus on the assembly work that actually delivers throughput.

On top of time spent handling loads, time and money is also needed for training and certifying forklift operators. These costs aren’t one-offs, operators require refresher training in order for operations to remain compliant and any new staff would need initial training as teams evolve.

Safety and incident risk are also prevalent factors. HSE data shows that lift trucks are involved in around a quarter of all workplace transport accidents, and HSE's own guidance attributes the majority of these incidents to poor supervision and a lack of adequate training.

Insurance and liability costs tend to rise alongside fleet size, since facilities running larger forklift fleets typically carry higher liability premiums, and workplace incident claims can affect rates for years afterwards.

Since forklifts need wide turning circles and clear sightlines, congestion and downtime are common side effects as well. This often means that aisles, loading bays, and shared walkways become bottlenecks that slow nearby work down as well as the forklift team. Hidden damage costs are easy to underbudget for but scraped racking, dented walls, and damaged equipment all contribute to costly rework later down the line.

Reducing manpower with MasterMover electric tugs

Electric tug ROI: numbers as a base case

The takeaway for capital planning teams: if forklift replacement or rental is already on the cards, an electric tug investment is only competing against a forklift investment that comes with a much bigger spend of hidden costs and a longer payback.

A full ROI case should also account for savings that are harder to quantify but still affect the P&L:

• Fewer forklifts in tight spaces means less risk of damage to equipment and facilities

• Reduced risk of damage means reduced exposure to costly rework
• Easier load movement boosts efficiency and throughput

How to calculate electric tug ROI

The framework behind this case example is simple to replicate for your own operations:

1. Calculate current burdened labour cost (crew size × hourly burdened rate × weekly hours × 52 weeks)

2. Calculate projected labour cost with a reduced tug-based crew using the same rate and hours
3. Subtract the two to get annual labour savings
4. Divide the equipment investment by annual labour savings for a simple payback period
5. Layer in forklift acquisition costs (rental, replacement, or resale of existing units) to see the accelerated payback scenario

Making the case for electric tugs

The headline figures in this example are compelling on their own, but the full case for switching from forklift trucks to electric tugs goes beyond this.

Forklift-based material handling comes with a layered cost structure involving crew size, training & certification, insurance, safety incidents, damage to facilities or equipment, and operational downtime which all compound on top of the equipment cost itself. Electric tugs like our PowerSteered series with MultiLink configurations are designed to remove many of those cost drivers at once to change the underlying labour and risk profile.

For environments with additional constraints, such as data centre infrastructure manufacturing, the case can be even stronger with tighter tolerances for damage and uptime, making the precision control of a single-operator system especially valuable.

The best way to know what this means for your own site is to run the numbers using your own crew size, labour rates, and forklift costs following our simple 5-step framework used above.