07 May 2008
Business in the Midwest – including the states of Iowa, Illinois, Indiana, Kansas, Missouri, Michigan, Ohio and Wisconsin – are reporting steady to moderate business activity. The transport industry in particular is facing a few stiff challenges, as companies in this sector are moving manufacturers to other locations, even abroad, thus losing some customers that may have otherwise commissioned work in machinery moving and other specialized freight services. Furthermore, as some manufacturers and producers have gone to Splitsville, transport companies have been forced to branch out into other territories, infringing on competitor markets.
Transport companies also report hardships with rising fuel costs, making shippers uneasy about freight delivery. Yet all is not doom and gloom. The lifting sector, and crane work in particular, continues to enjoy strong demand.
Based in Iowa, Reppert Rigging & Hauling reports things are fine. Located in Des Moines, demand has been “pretty decent” for Reppert's services says Jeff Dickinson, vice president. He says the economy in his region has been fueled by ethanol plants, as well as the farm industry and OEM automobile manufacturing plants.
Dickinson is one who believes that an election year tends to create reservations with in the US economy. “I believe there's always correlation with an election year. No one knows what's going to happen with changes of one leadership to another,” he says.
Last year was good for the company, he says, yet this year has started offslower than in the past. As a trucking and rigging company, he shares that fuel prices have been the hardship and he hopes the prices “get under control.”
In late summer, the company will move into a 100,000-plus square foot offce and warehouse facility east of Des Moines into Altoona, IA.
In Lincoln's home state, Lifting Gear Hire Corp. of Bridgeview, IL is experiencing a nice surge of business, even growth. The company is devoted exclusively to the rental, sale, and service of lifting, winching and material handling equipment, and the provision of associated services. It has 10 locations in the US and sales representation in more than 22 states, providing for rent or sale hoisting, pulling, winching, and jacking equipment to meet lifting or moving needs.
“Business has been great since long before I got here,” says Dan Barton, marketing, LGH. “Especially over the last four years it has started to explode. Last year's numbers were approximately a 20% growth from 2006 to 2007. We are most likely going to have another great year.”
He says utilization of the fleet, which collectively is 13,000 units and consists of hoists, air skates, lifting beams, shackles, racket jacks, hydraulic rams, mechanical jacks, gantries, winches and more, is very high. As soon as equipment is returned to the warehouse, the next day it is out of the door, Barton says.
“The forecast looks great. If we saw softening we wouldn't be talking about expansion,” Barton says.
Granite City, IL-based Riechmann Transport says business was fine for a couple years but reports things began to slow at the end of 2007. Glenn Riechmann, owner and director of the company, says things have returned to steady. The company hauls a lot of structural steel to locations with in a 500-mile parameter. “It seems like construction has been going good but housing is down. Industrial construction is good though,” says Riechmann.
The poor housing market has not impacted the company, and Riechmann has secured a couple nice projects lately, hauling more than 300 loads going to Peoria and 1,000 pieces of steel delivered to a Louisville, KY UPS site. The company also has invested in 15 Freightliners, adding to an existing fleet of 100 units.
Rockford, IL-based Rigging Services serves the structural steel and plant and machinery moving sectors. The company services some 600 customers. “we're going to do good this year. Right now, we're going to do around $7 million this year. I already have $3 million in the books right now we're going to hit our target as far as sales this year,” says Joseph LaRue, CEO.
Yet, LaRue says the local economy in Rockford has been “somewhat depressed,” and that the company has branched out of state to keep business going. The company has gone as far as Texas to Alabama for recent jobs. “We are actively going to look for new customers,” says LaRue.
Hoosiers are reporting that business has been fine, yet some are looking for ways to expand their business. Trans-United Inc., a specialty transport company that works in 48 states including Mexico and Canada, with opportunities in Jamaica, is diversifying. Not only does it haul loads from 200 to 200,000 pounds, but the company is looking into ways to become a one-stop operator for its customers.
“We're trying to expand into turnkey business, such as plant moves, being a single source carrier, arranging riggers on both shipping and receiving ends, etc.,” says Jeff Fleming, president of Trans-United, based in Burns Harbor, IN.
In regards to how the company performed over the last couple years, Fleming says 2007 was soft compared to 2006. This year, the company reports business appears to be up from last year, yet the company has taken a stronger approach to its sales and marketing efforts. Trans-United is trying to get more visibility, says Fleming.
The company did purchase equipment last year and now collectively operates about 60 trucks, more than 100 trailers, from flat bed to multi-deck 13 axles, and has a steerable dolly system. It recently expanded its facility to 30,000 square feet. And this year, Trans-United invested in four 2008 model Western Star tractors. This growth suggests the business is comfortable with its current status, yet Fleming says it will take extra initiative to remain at this level.
“We're saying we're optimistic about this year but it's going to take more work to meet our objectives,” says Fleming.
Geary Buchanan, president with Buchanan Hauling & Rigging Inc. of Ft. Wayne, IN, says last year was soft for the company. As a full-service business with a fleet of 200 trucks and 175 owner/operators in 25 company trucks, Buchanan's operations are international, running jobs in the US, Canada and Mexico. He says 2005 and 2006 were both very good years but the price of fuel has taken the toll and has affected Buchanan's bottom line. The first two months of 2008 have been pretty good for the company, and Buchanan says, historically, the first quarter is always the slowest.
“We just went after our existing customers and are looking for other synergies we can do for them. We've been successful with that,” Buchanan says. As an example, the company began offering expedited business for these customers and has emphasized that it is an around-the-clock operation.
The company has also beefed up its staff to spread throughout its Ft. Wayne location, as well as its offces in Pittsburgh and Hammond, IN. Additionally, the company named Mike Wardzinski vice president of Buchanan Heavy Haul, in Pittsburgh. And the company has staff looking into developing a Chicago operation.
As a full-service crane company specializing in all terrain hydraulic and truck cranes, as well all facets of hoisting, Budrovich Contracting Co. of St. Louis, MO continues to grow. The company serves clients in Nebraska, Iowa, Illinois, Kansas, Arkansas and Kentucky. Not only offering larger crane rental with in a 400 mile radius, the company offers turnkey solutions to its customers. The company also hopes to break into the crawler crane market, says Darren Jaycox, president.
“All facets of the economy were great until last year,” says Jaycox “The commercial has dipped down this last year but the industrial has gone crazy. Petrochemical, the power industries – our business is up. Last year was a record for us; this year we're already up 40% from this time last year.”
Jaycox's forecast for the future is “same,” predicting that commercial business will be “average” and that industrial, with petrochemical in his market, “fantastic” the next four years.
Currently, the company has a Manitowoc Model 2250 300 ton lattice boom crawler on order, which will be largest in the fleet next to its 550 ton Grove all terrain crane.
“Our specialty is we have five full time estimators,” says Jaycox. “We have fully operated and estimated job site and logistical services.” He says part of the company's agenda is to encourage more kids to get involved with the industry and to mentor the youth by outreaching to several vocational programs in his area for recruitment.
“We're a union shop so we work with the local union in a partnership program. We bring young kids up from with in,” he says.
Jim Wilson Crane Works, founded by its namesake, reports the company has been totally “snowed out.” Wilson, president, says the company is totally booked out for 2008. Based in Ulysses, KS, Wilson says things are fantastic. With its fleet of cranes, trucking and excavation equipment, the company is able to service the oil fields and agricultural markets that flourish in the region.
“Our little corner of the world has a lot of gas and oil, railroad, and a lot of agricultural work. We are totally booked out,” he says.
The company currently has 10 trucks and trailers for heavy haul work. “Today our biggest crane is a 120-ton and we have a 240-ton Liebherr that is about to be delivered this month,” he says.
And the company will need it. Wilson says there are reports that 1,000 windmills are being built with in 100 miles of his location. Plus he says there are talks of two to three ethanol plants in development that could provide a lot of work in close proximity.
In Ohio, the business appears average for All State Freight Systems, which works in the US and Canada, and hauls up to 15,000 pounds and offers expedited service.
“I find business OK – nothing to be excited about,” says John Ward, president of the Twinsburg, OH run business, and 2007-2008 president with the SC&RA. “Frankly, I don't think it's as bad as reported in print or TV but if you keep beating the drums, people start pulling back.”
And of course, fuel costs are a major concern. “With fuel at its cost, it's getting tougher and tougher to negotiate freight. We're getting a lot of resistance because we had to raise rates 25%. If the price of fuel keeps going up... It can make shippers rethink about shipping goods,” he says.
No matter what happens, Ward says 2008 will still be a decent year. Even with a new political administration entering this year, he says business will be fine, but by 2010 the new president's policies' will begin kicking in and that's when it could impact freight companies.
Another concern Ward shares is that when things get tight for competitive companies, and they look for ways to branch and extend out, that business can filter in other companies' areas and regions. Whenever things gets slow, competition begins to enter the area, he says.
“Other than that, We've purchased some new trucks last year and have three more trailers coming on the end of the month [March]. In one respect, it can be tight and tough but I'm in a position with new equipment ready to the meet the challenges,” Ward says.
Third generation rigging and warehousing company Miller Truck & Storage, of Jackson, MI, works internationally, as far as Korea. Dave Heins, vice president and general manager, says the company is traveling farther and farther in search of work.
“There's not enough industry to support us here. In the last 20 years We've branched out,” says Heins. He says that work has been steady in the last couple years with plant moving jobs, but that work is slowing down.
Wisconsin contractors seemed polarized: one reports things are well, the other reports things are not so hot.
The former, Ideal Cranes, of Madison, WI, has continued investing in equipment this year. The company has a fleet of 55 cranes, 10 industrial cranes, 20 semis for deliveries, and its aerial division has 90 rental forklifts, 90 boom lifts and 150 scissors. The company is a dealer for JLG, Grove, Manitou North America, Skyjack and Aichi.
Two years ago, Ideal bought Griese & Ross, which added another 12 cranes to Ideal's fleet. “We had a pretty good year in 2007. So far, it's been OK [this year], but I'm being cautious. I watch too much of the news. Winter has been real bad – we're approaching 100 inches [of snow]. If it isn't snowing, it's -10 to -15 degrees F, but even so We've stayed fairly busy,” says Bob Kalhagen, president of Ideal Cranes.
Even through his caution, Kalhagen is still investing in equipment. After ConExpo wrapped in March, Manitou North America shipped its MHT 10160 telescopic handler, one of the heaviest in the industry. In cranes, the company received its new GMK 5100 100 ton unit and this spring will received its GMK 6350 model, the largest crane Ideal will have in its fleet.
“The most exciting thing we got coming is the Liebherr LTR 1100, a hydraulic telescopic boom crawler crane, rated at 100 tons. I bought this at Bauma. When I watch the news at night, I wonder if I did the right thing,” he jokes. The utilization of his fleet on everything from 60 ton up is good; below that is poor, he says.
Steve Swanson, of Modern Crane Service Inc., says the market is “pretty bleak” in his area. The vice president of this fourth generation Onalaska, WI-based crane and rigging yard says this is the first year in a while that his sales have declined. He says he has had to lay offstafffor the first time in 12 years. A large part of this connects with the company's reliance on the housing market.
“Housing was a pretty good part of our business, and We've gone to setting two houses a day to two houses a week,” Swanson says, who runs the business with his wife Judi, who is president of the company.
When asked if 2008 being an election year has had any impact on business, he says in his experience, when there's an incumbent leaving, it will be a good year; new incumbent, it's going to be a down year. “That's true not just in our business but everywhere,” he says.
He says plant moving has kept the business going during the rough times, yet his utilization of 14 cranes, ranging from 6 to 110 ton capacity, is at 25%, which is not good.
“I've seen slow times before and we'll withstand it. I'm still thinking of buying another crane,” Swanson says.