Current Events

Short-term, Huber-charged rental and sales activity could settle in to a long-term negative for the industry.
BY KIM PHELAN

Mobilizing resources to help customers and communities in a crisis is something dealers do best which is why one of the most frustrating immediate outcomes of Hurricane/Superstorm Sandy were, for some New York- and New Jersey-area dealers, the debilitating challenges of communication disruptions and fuel shortages. For example, at Tim Watters Hoffman Equipment, a multiline crane and heavy equipment distributor headquartered in Piscataway, N.J., running out of diesel fuel for service trucks had the company resorting to siphoning fuel out of machines in order to keep service vehicles dispatched. Thats when we really started begging for [our fuel provider] to come by, said Watters, an AED officer slated to be chairman in 2014. Finally after four phone calls of begging he brought fuel to us. The bigger problem was our employees trying to get to work who had no fuel in their cars. Our fuel provider felt so bad for delaying our diesel delivery that one day he send a gas truck in here loaded with fuel and he let all our employees fill up their cars and that was a relief for everybody! It was probably the best perk everyone got all year. Damage at Hoffman Equipments main office was minor, says Watters; not exceeding $10,000 he estimates, caused by a tree blown down on a fence. And with the exception of his Marlboro, N.Y., branch, his facilities all retained power and reopened Tuesday morning at 7 after the storm passed through the previous night. There were pockets of neighborhoods that had power and by some stroke of good fortune our company [headquarters] was in one of those pockets, said Watters. But four hours
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from where the storm came ashore people were still losing power it shows you the extent and range of the storm. Loss of Internet and e-mail access was the more crippling issue during the first week following Sandy. For Hoffman Equipment, Internet comes through cable, Watters said, so the company was without it till Friday that week. Thanks to good fortune and good emergency backup planning, the lights and Internet were on for all 10 of Modern Groups locations across eastern Pennsylvania, New Jersey and Delaware, but Chairman Dave Griffith says that cellular communication was the biggest challenge with which the company wrestled in the storms aftermath. A forklift, power and equipment dealership based in Bristol, Pa., Modern Group runs on MobileFrame, says Griffith, which is dependent on an Internet wireless solution; Modern patched their problem by distributing mobile hot cards to staff, but the company will be evaluating how to solve the issue longterm, perhaps with radio backup. We dont have an answer yet, said Griffith. Help Thy Neighbor Extensive as Moderns inventory is, the needs have been great and unceasing. Griffith says the company has experienced an outpouring of equipment-to-the rescue from other dealers to the tune of 180 forklifts. Literally I was able to call down and overnight had rental trucks coming at me from Ohio, from New England, from Virginia; they literally rolled in overnight, said Griffith. He added that Modern has been dropping generators to competitors, as well, and sent fleet to other regions

Photo courtesy of H.O Penn.

Dealers Dive In To Help Sandy-Struck Region

Blown Away:

Current Events

during times of emergency. As youd expect, the products in greatest demand are generators, chippers, forklifts, skid-steers and loaders. The rental business for anyone near the scene is at euphoria levels, not that anyones gloating about it. Hoffman Equipment is tracking at 35-40 percent for rentals attributed to cleanup; Modern was going 24/7 round the clock on rental and sold two million portable power units in a week. Some 1,700 miles away in San Antonio, Holt Cat was among numerous Cat dealers around the U.S. that mobilized to help provide power to Sandy-struck regions. Holts national response team deployed power generators and service technicians to New York and New Jersey, restoring temporary and permanent power in the areas. The company has also sold and rented more than 40 dewatering pumps and 100 light towers. Closer to the devastation, H.O. Penn, the Cat dealer based in Poughkeepsie, N.Y., kept its rental operation working through the weekend to get generator sets out to customers, reporting its entire inventory of 145 gen sets all on rent as of Oct. 30. The company deployed technicians onsite at 23 customer locations to provide round-the-clock support, as well. The demand for rental of heavy Caterpillar equipment has also increased as the cleanup and the infrastructure restoration process begins, said President of H.O. Penn Jeff Mitchell. Impacts were pretty widespread, he added. A number of our employees had damage to homes, in varying degrees. Due to flooding in lower Manhattan, our phone service was

disrupted in two of our branches. We had to quickly develop work-arounds to overcome the problem it created so we could continue to take care of our customers. Wind-related tree damage has been unbelievable, says Griffith. And the lingering, debilitating loss of power on residents and businesses could continue till mid-December, he said. The generator business is going to be white hot for months. Equipment replacement is kicking in, as dealers are witnessing just how many customers suffered damage or total loss to machinery left too close to the shores. Im a little surprised customers didnt pull equipment back from the water, but I think it caught a lot of people by surprise, Griffith added. Sad Truths Watters relayed that a customer in Breezy Point, N.Y., a particularly devastated neighborhood in Queens, lost his home, as did his son who works with him and another employee; nevertheless they purchased four machines to do storm cleanup work in their community. There are a lot of homes that will need to be taken down, said Watters. Theres some demolition work for sure thats going to happen, but the flip side of that story is all the people in those homes that are going to be displaced, all the low-lying areas of New Jersey, where hundreds of thousands of people live right near the water. I dont know what the numbers are, but there are thousands of homes that are destroyed. Its not like the kinds of dramatic things that are good for a picture, but theyve all had four or five feet of water in them, and even more, on the first floor, so theyre just destroyed. They think theyre drying them out but theyre all being condemned; they have to come down, Watters said. Griffith estimates the demolition work alone could go on for six months to a year. Was it flood? Was it wind? Were going to learn a lot about flood insurance, he predicted grimly. Im concerned that some companies wont open. Ken Simonson, chief economist at Associated General Contractors of America (AGC), echoed that probability, adding that it will also take time for insurance proceeds to be parlayed into construction. A number of businesses will not reopen, Simonson said, and other businesses that were ready to expand or occupy new space and trigger investment by developers, theyre going to postpone or cancel those plans. And similarly with homeowners while it is relatively easy to count the number of homes that were destroyed or will have to be demolished, that doesnt necessarily translate into one-for-one replacement, Simonson continued. The net impact, therefore, on the construction industry, even within the region, will be small, and measured over a longer period of time, negative. I think any time you get massive destruction of wealth of any type youre going to be slowing down economic activity and with that, construction activity.
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Creative Kindness
While donations of money are vital to meet the widest swath of need in a crisis, the management of Modern Group understands that people also like to give tangible, more personal things to help victims of disasters. And so, in cooperation with its manufacturing partners Bandit, Hyster, Generac and Terex, the company launched its Sock It To Sandy campaign to collect new socks, new hats and new gloves, which will be distributed quickly to those in need by The Salvation Army. The Modern Group Edison, N.J. branch, which is nearby the New Jersey Shore, one of the hardest hit regions, will serve as its Sock It To Sandy headquarters. In a letter to customers, employees and suppliers, Modern Group President Paul Ferrell said, As the weather turns colder and the days since the storm increase, the devastation of the impact of Sandy multiplies. The outpouring of kindness has been phenomenal. Relief efforts from throughout the nation are helping restore power little by little, but the cleanup will take months and years. In the meanwhile, thousands are still without basic electricity and heat. The company collected donations through Nov. 26 as CED was going to press.