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FEMA: Trailer Demand Outstripped Supply

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October 31, 2005 by   Leave a Comment

Residents of New Orleans and nearby areas clobbered by Hurricane Katrina continue to clamor for temporary trailers to ease a housing crunch. But, according to a report in the Times Picayune, industry experts say the official claim that units are coming soon is a pipe dream.
“I feel for these people who’ve lost homes and think the posse is coming because it’s not, not like they think it is,” said Mike Fulmer, owner of Berryland in Hammond, Louisiana’s largest trailer and recreation vehicle dealership. “It won’t happen because the supply just isn’t there.”  
Coast Guard Vice Admiral Thad Allen, who heads the federal relief effort, acknowledged last week that demand has far outstripped the supply of trailers that the Federal Emergency Management Agency (FEMA) hopes to make available to residents, either at scattered sites or in larger clusters. But additional deliveries may arrive by mid-December, Allen said.
“We’ve got a massive order in the pipeline,” he said, putting the number at 120,000. “We’re looking for ways to meet demand, but the mere production of them takes awhile.”
FEMA has more trailers on order just for the hurricane zone than manufacturers are accustomed to cranking out for the national travel trailer market in an entire year, industry statistics show. The stuffed production pipeline is one reason trailers have become a contentious issue among federal, state and local officials.
Louisiana Gov. Kathleen Blanco’s staff remains miffed that FEMA has failed to expedite the process or focus its buying power in-state. Residents bemoan the slow pace of getting city services back on line, a problem partly linked to lack of housing for workers. And all sides seem exasperated with FEMA. As the matter drags on, washed out citizens remain in limbo.
The lack of housing, according to residents and officials, marks the highest short-term hurdle before reconstruction can begin in earnest. And while the hopes of some may be high, the statistics underlying the travel trailer market are grim.
Annually, the industry manufactures roughly 144,000 travel trailers, according to numbers provided by Fulmer and confirmed by spokesmen from two manufacturers. Of that amount, only 60%, or 86,400 units, meet FEMA’s specifications. The specs call for 30-foot trailers with a “bunkhouse construction” that will sleep several people, along with amenities such as a bathroom, shower and kitchen, Fulmer said, and the agency will not pay more than $20,000 per unit.
“FEMA is going to have to relax the specs a bit,” he predicted. “For instance, there are 26-foot trailers with a pullout that would be perfect for a family of three.”
Unfortunately, even the figures surrounding the units on order are misleading, because travel trailer manufacturers generally don’t build on spec. Supply is roughly equivalent to demand and all manufacturers attempt to work at full capacity. That kind of connection between manufacturer and buyer means there are neither stockpiles of inventory nor idle production time.
“I know we had a lot of regularly scheduled production in the pipeline and we haven’t produced that many FEMA units because we just don’t have the capacity,” said Jeff Rowe, a spokesman with Forest River, the nation’s second largest manufacturer of trailers.
When told FEMA was talking about having 120,000 trailers in hand by December or January, Rowe was skeptical. “That sounds awfully aggressive to me,” he said. “I just can’t see them meeting that number.”
Nevertheless, Rowe said his company would be able to meet its contractual obligation with FEMA and deliver 7,000 to 7,200 units by the end of the year. Fleetwood RV, another big manufacturer, said it is “on schedule” to deliver 7,500 travel trailers by the end of the year. At the end of September, Gulf Stream Coach boasted of having “delivered more than 3,000 travel trailers in less than four weeks to the victims of Hurricane Katrina.”
Despite that ramp-up in manufacturing capacity, the numbers provided show that three of the nation’s major producers so far account for fewer than 25,000 of the 120,000 units Allen wants. And Allen’s figure also encompasses parts of Mississippi and other sections of Louisiana ravaged by Hurricane Rita, meaning the number of units available for the New Orleans area will be even smaller. Statewide, Louisiana needs about 85,000 trailers and 15,000 mobile homes, according to Blanco’s administration.
Fulmer said the numbers speak for themselves. “They’re going to trickle in and it won’t be by Christmas. You’re talking about a year from now,” he said. “When they say 120,000, there is absolutely no way that can happen.”
FEMA contends the deadlines will be met.
“We are going with the vendors’ commitments and we’ll hold them to that,” said James McIntyre, an agency spokesman in Baton Rouge, who fixed the figure of FEMA orders at 125,000 trailers. “They told us they could deliver 500 a day and they are meeting that goal, and as long as that happens we’ll be OK.”
Should the manufacturers falter, FEMA is authorized to buy trailers right off retail lots.

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