It’s the busy season for the RV transport industry.
Along C.R. 38 in Elkhart County, Ind., colorful banners tied to fences and staked up in lawns, shout at passersby, “Drivers Wanted.” Yes they are, The Goshen News reported.
“We are just shy of 600 and we are looking for a few hundred more,” said Scott Liester, operations manager for Star Fleet Trucking, a Goshen company that transports recreational vehicles.
Liester said drivers who own 1-ton pickups are in the greatest demand.
“We are hiring more every day. Five and 10 a day,” Liester said.
Spring is the busy season for RV manufacturers, thus RV transport companies. The RV industry holds its annual trade show in early December and a lot of orders are taken there. Then the building begins for the spring and summer RV shows.
RV drop lots on Goshen’s south side are filled with units waiting to be transported.
Jay Hochstelter of Goshen was busy doing his part Thursday (April 7) to whittle down the inventory. Hochstetler was at the FLJ Transport lot on Caragana Court hooking up a 29-foot Keystone Springdale to his Dodge Ram 3500 pickup.
After two years of being unemployed, he was happy to be working, even if his job keeps him on the road.
“I am just happy the industry is doing well. The last time the prices (fuel) went up this way, RVs didn’t sell,” he said.
Hochstetler and other transport drivers keep a close eye on the price of diesel nationwide. And one of the odd things about the rise in fuel costs is that drivers say Goshen has some of the lowest diesel prices in the United States.
Hochstetler said the only other area of the country that has such low diesel prices is southern Texas.
A short distance from the FLJ lot is the Speedway gas station on U.S. 33 South. Thursday, transporters kept the diesel fuel islands busy because they were getting fuel for $3.83 a gallon. Other stations in the area were selling it for $4.10 a gallon. That price is similar to what is found in New England, according to Liester.
He said the national average price for diesel Tuesday was $3.97 per gallon, according to the Department of Energy report he received. The average in the West was $4.20, $3.93 in the Midwest, $4.10 in New England and $4.30 in California.
Liester said Star Fleet, like other RV transport companies, adjusts its fuel surcharge for manufacturers based on the current price. Then drivers are given a fuel payment adjustment.
“It is bothersome to us because we have to monitor it constantly. Because of the diesel we burn daily, it doesn’t take a lot of time to burn up a lot of money,” Liester said of the surcharge process.
The cost of fuel is passed on. “That reflects a higher freight bill going back to the dealer,” he said.
At Classic Transport, Jodie Schieber, general manager, is also dealing with the spike in the cost of diesel.
“It is rapidly going up, and it keeps going up every day. So it does impact our drivers,” she said.
But, her company is also recruiting drivers.
“We try to target retired people who want to get paid to see the world,” she said.
The company is also looking for younger drivers. She said the fleet is split about 50-50 between retirees and full-time drivers.
And those drivers are given pay adjustments based on the cost of fuel. Schieber said the manufacturers her company services have a “matrix” that they use to adjust the fuel surcharge.
“As demand for shipments get higher and fuel costs get higher, they adjust,” she said. “So we pass that (additional pay) along to the drivers.”
Schieber said drivers track fuel costs using their laptop computers or by chatting with other drivers on their CB radios.
“And when there is a low price, trucks are lined up,” she said.
Matt Halicek of Clare, Mich. was standing beside his haul and tow RV transporter truck outside the gate at Horizon Transport Thursday. He was pondering the constant question for drivers, whether to put more money into his current truck or purchase another. The rising cost of fuel is part of his consideration.
“It’s rough. It’s a constant struggle, especially when you get out to New York and its $4.25,” Halicek said.
And the driver took an expansive view of the fuel price problem.
“With the fuel going up, it’s going to hurt the whole community,” he said as he waved his arm across the horizon of south Goshen, where dozens of RV companies churn out their products.
Halicek gets around because of his job. He rattled off that diesel was $4.14 in Maine and nearly $5 in Canada. On his next trip he will be headed west, to Irvine, Calif.
The 3 1/2- day trip will require his Freightliner to consume a lot of fuel. He said when he has to pay higher prices for fuel, “It takes it right out of the profit.”
He said the prices of other things drivers and their families need are also going up. He cited rising prices for food, entertainment, heating fuel and on.
“All you can do is hope you are able to keep on moving until you can’t do it anymore,” Halicek said.
Halicek, Hochstetler, Liester and Schieber all agreed the RV industry is doing much better this spring and there is a lot of work for transporters.
“This is our busiest time of year,” Halicek said.
Schieber also said this spring is busy for the RV industry. “This year we definitely are seeing an increase. Everybody’s lap is pretty full. Dealers are definitely buying and want a lot of product,” she said.
The dealer end
Local dealers agree.
“What happens when the fuel prices go up? The permanent site campers go up. It doesn’t change the buying public, but it does affect their mind set,” said Dave Titus, general manager at International RV World in Elkhart.
The only thing he has noticed from customers is that some of them say they will cut back the length of their trips due to the fuel prices.
“In the towable RVs, it doesn’t really hurt it,” he said.
Titus said the auto industry is also adjusting to the fuel issue. He said Ford has a new F150 V6 ½ ton pickup that is capable of towing 11,300 pounds. That truck gets 24 miles per gallon.
Sales have been strong at International RV World’s Elkhart and Florida stores, according to Titus.
“It has been a constant gain for the past 16 months… In 2010 we passed 2009 for the entire year June 3. This year we passed 2009 numbers in the first week in March,” he said.
In Middlebury, Dennis Johnson, sales manager at Outpost RV Sales, agreed with Titus’ assessment.
“I would say at this point, it (fuel cost) has not affected us,” Johnson said.
“We are experiencing the best year we have had in 12 years. It has been very good for us,” Johnson said.
A rather sudden upturn in the towable RV market – on the heels of the production cutbacks of the recent recession – have left the U.S. recreational vehicle industry with somewhat of a dilemma: There’s simply not enough people available to deliver RVs to dealerships around the country.
Classic Transport, Elkhart, Ind., is backlogged six weeks on deliveries, according to CEO Bill Garvey. “We are working to build our fleet back up,” said Garvey. “This backlog is the highest it’s been since (the mass shipment of emergency housing units in 2005 to the Gulf Coast for) FEMA.”
Garvey said the age range of drivers (typically 50-70 year-olds semi-retired or retired), freight revenues, the expense of operating one-ton trucks, mounting regulations and the retail upswing are all factors contributing to the current transportation situation.
Classic Transport cut its company in half or more during the recession, and now there has been more than a 200% upturn in RV market shipments, says Garvey. “When these manufacturers break loose and start to ship in quantities, they create a backlog in the transportation industry,” Garvey said. “This has not come as a shock; we have all foreseen this.”
Garvey said almost none of his drivers are from the Elkhart area, contrary to popular belief, but live in other parts of the country.
“Since they don’t live in Elkhart, laid off drivers are harder to bring back,” he said. “Their trucks are very expensive, often with over $2,000 extra in equipment. We recruit part-time drivers, 50-70 year-olds. We are not able to recruit full-time drivers because when you sit down and do the math it doesn’t work out to full-time income.”
All of these factors add to the complex issue of transportation in a busy market. “We’ve been advertising (for drivers) and we’ve had a good response,”said Garvey, a former RV manufacturing executive. “But in terms of actually coming to work, they are not real thrilled with the snow. As the weather breaks, so will the dam on new drivers. How rapidly we will be able to get into the backlog is yet to be seen. There are a lot of variables to consider.”
Last week Classic Transport’s backlog nearly doubled in just one day.
“It’s a very large battle,” Garvey said. “We might not catch our breath until July when companies shut down for two weeks.”
Wave Express, Goshen, Ind., is having better luck contracting drivers, but is still backlogged three weeks, according to Anita Carpenter, part-owner of the company.
In August 2008, Wave Express had but three customers, and then the recession hit. Carpenter applied a little salesmanship and went directly to the dealers. Today Wave Express works directly with 25 dealers. It was to these dealers that Carpenter turned when the market picked up, prompting somewhat of a transportation bottleneck.
Carpenter last year needed maybe 20 drivers; she now has 52. “In Elkhart County there aren’t any drivers because of the recession,” she said. “So I went to my dealers to find drivers and placed ads in a few other states. We have 52 drivers right now and I could take on 100 more, but I don’t want to overpromise or underdeliver.”