Editor’s Note: The following letter from Ernie Friesen, president of the California RV Dealers Association (CalRVDA), was sent today (Oct. 10) to key industry leaders addressing a growing industry issue regarding “equalized freight policies.” In the communication, Friesen advocated that the RV industry institute an equalized freight policy, similar to initiatives in the auto and truck industry, that could virtually “cut the cost of freight from Indiana to the West Coast nearly in half.”
CalRVDA has a simple solution to the driver-delivery problem that is plaguing the RV industry.
The answer is “equalized freight.” If the RV industry instituted an equalized freight policy we could virtually cut the cost of freight from Indiana to the West Coast nearly in half.
Once the cost per mile has been factored, you could then add a reasonable amount to this cost per mile factor to make it advantageous for drivers to haul trailers again.
Manufacturers would eliminate huge inventories of towables sitting in their yards and dealers would have inventory at the dealerships to sell to the consumer.
The last increase in delivery costs per mile occurred approximately one month ago and resulted in an increase of $500 to the West Coast. We are now pushing $4,000 to deliver a trailer to the West Coast and this cost will continue to go up over time to the point where West Coast dealers will not be able to carry any product built in Indiana. There are two ways to resolve this situation: equalized freight or build on the West Coast.
I am confident that once a proper cost accounting analysis is completed, you will find that not only is it easier and less expensive for the manufacturers to implement equalized freight, it also gives the manufacturers more control with transportation from Indiana to anywhere in the U.S.
Another positive for the manufacturer is MAP pricing. We all pay the same so it really comes down to the dealer, the sales staff and the training. With the current situation, a West Coast dealer appears to be ripping the customers head off when they see our price against a Midwest or East Coast dealers. Do manufacturers really like regulating MAP pricing?
We are not only competing among ourselves for the recreation dollar, but also with cruise lines, boating, timeshares and other destination travel for the consumer vacation dollar.
I am sure there are Midwest and East Coast dealers that would not be pleased with equalized freight, but I believe this is the only solution if the RV industry is to remain healthy.
For this to work, manufacturers would have to stop factory pickups by dealers. Some RV manufacturers are already utilizing equalized freight in their delivery process to dealers.
Let’s make this an RV industrywide program.