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Strong Sales Creates Delivery Bottleneck

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April 29, 2002 by   Leave a Comment

The sharp increase in orders from RV dealers that began in December has created three- to four-week delays in factory-to-dealer deliveries, according to industry sources.
“We’ve had a backlog since the first of February, and its ranging between three and four weeks,” said Marion Schrock, vice president of Horizon Transport Inc., Wakarusa, Ind., which employs more than 500 drivers. “There isn’t really any solution to it. It’s about supply and demand, and right now demand is extremely high. And from what manufacturers tell us, their production levels will stay the same or go higher.”
The transport industry backlog reflects the hefty increase in RV production that began early this year. Wholesale shipments of motorhomes and towable RVs, as reported by the Recreational Vehicle Industry Association (RVIA), were up 12.4% for the first two months of the year compared to 2001.
Additional manufacturing capacity also is coming on line. Keystone RV Co. recently opened a new plant in Goshen, Ind., and Monaco Coach Corp. recently revealed plans to raise its production volume and hire more workers.
“It appears that after 9/11 the RV industry slowed down – some companies more than others,” said Bill Garvey, president of Classic Transport Inc., Eklhart, Ind. “There were still retail sales, but dealers were nervous and cut back on their inventories, and manufacturers slowed down their normal building process. At the end of November, though, activity picked up dramatically.”
Classic, which takes shipment orders only two weeks in advance, was booked solid in mid-April. That, despite hiring 70 new drivers since December for a total of 200, and establishing a satellite delivery center in Goshen to handle units manufactured by Keystone and Forest River Inc.
“We can’t catch up with the demand,” said Garvey, who estimated that if his company booked shipments beyond two weeks, its backlog would be four weeks.
“Some manufacturers have told dealers that if they can pick up units, they are encouraged to do so,” Garvey said. “Last year was an optimum situation. We would get the product, and within three to four days, we would deliver it.”
Some transport companies appear to be less affected than others.
“From our vantage point, we’ve seen some increased demand, but it hasn’t been an explosion – not like the last time that sales spiked,” said Chris Barrett, vice president of Bennett Truck Transport Inc., McDonough, Ga., which employs 350 to 400 drivers. “There still is a shortage of good, qualified drivers. But for our base customers, we are doing a fairly decent job keeping up with their demand. We run into problems like everybody does at the end of the month.”
Horizon’s Schrock said the transport segment’s problems aren’t going away soon and won’t be solved by hiring new drivers under current conditions – something Horizon has attempted to do with a series of television ads.
New drivers are difficult to hire, Schrock said, because mileage rates paid by manufacturers – in a range below 90 cents a mile – aren’t sufficient for full-time employment. At the same time, a change in U.S. Department of Transportation rules two years ago also cut in half the potential time a driver could spend on the road.
“We have to rely on retired people who have other sources of income,” Schrock said. “They work when they want to work, and they go where they want to go. The compensation isn’t such that we can draw a lot of people in from other industries.”

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Strong Sales Creates Delivery Bottleneck

  Print Print

April 29, 2002 by   Leave a Comment

The sharp increase in orders from RV dealers that began in December has created three- to four-week delays in factory-to-dealer deliveries, according to industry sources.
“We’ve had a backlog since the first of February, and its ranging between three and four weeks,” said Marion Schrock, vice president of Horizon Transport Inc., Wakarusa, Ind., which employs more than 500 drivers. “There isn’t really any solution to it. It’s about supply and demand, and right now demand is extremely high. And from what manufacturers tell us, their production levels will stay the same or go higher.”
The transport industry backlog reflects the hefty increase in RV production that began early this year. Wholesale shipments of motorhomes and towable RVs, as reported by the Recreational Vehicle Industry Association (RVIA), were up 12.4% for the first two months of the year compared to 2001.
Additional manufacturing capacity also is coming on line. Keystone RV Co. recently opened a new plant in Goshen, Ind., and Monaco Coach Corp. recently revealed plans to raise its production volume and hire more workers.
“It appears that after 9/11 the RV industry slowed down – some companies more than others,” said Bill Garvey, president of Classic Transport Inc., Eklhart, Ind. “There were still retail sales, but dealers were nervous and cut back on their inventories, and manufacturers slowed down their normal building process. At the end of November, though, activity picked up dramatically.”
Classic, which takes shipment orders only two weeks in advance, was booked solid in mid-April. That, despite hiring 70 new drivers since December for a total of 200, and establishing a satellite delivery center in Goshen to handle units manufactured by Keystone and Forest River Inc.
“We can’t catch up with the demand,” said Garvey, who estimated that if his company booked shipments beyond two weeks, its backlog would be four weeks.
“Some manufacturers have told dealers that if they can pick up units, they are encouraged to do so,” Garvey said. “Last year was an optimum situation. We would get the product, and within three to four days, we would deliver it.”
Some transport companies appear to be less affected than others.
“From our vantage point, we’ve seen some increased demand, but it hasn’t been an explosion – not like the last time that sales spiked,” said Chris Barrett, vice president of Bennett Truck Transport Inc., McDonough, Ga., which employs 350 to 400 drivers. “There still is a shortage of good, qualified drivers. But for our base customers, we are doing a fairly decent job keeping up with their demand. We run into problems like everybody does at the end of the month.”
Horizon’s Schrock said the transport segment’s problems aren’t going away soon and won’t be solved by hiring new drivers under current conditions – something Horizon has attempted to do with a series of television ads.
New drivers are difficult to hire, Schrock said, because mileage rates paid by manufacturers – in a range below 90 cents a mile – aren’t sufficient for full-time employment. At the same time, a change in U.S. Department of Transportation rules two years ago also cut in half the potential time a driver could spend on the road.
“We have to rely on retired people who have other sources of income,” Schrock said. “They work when they want to work, and they go where they want to go. The compensation isn’t such that we can draw a lot of people in from other industries.”

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