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There may be less insurer involvement and less overcapacity in the heavy truck collision repair business than there is in the passenger car business, but it has plenty of its own unique challenges.
The bad news regarding the economics of moving freight over the roads is all over the media these days. With diesel fuel at record high prices, truck traffic has clearly slowed in recent months, and the rate of accidents involving heavy trucks is also trending downward to under 150,000 collisions per year (according to the Insurance Institute for Highway Safety).
The bright side is that the number of heavy truck repair shops involved in paint, body and frame repair is holding steady, which means the overcapacity that has been plaguing the passenger car collision repair market for the last 15 years or so is not a factor.
Less Insurer Control
The differences between the heavy truck collision repair business and the passenger car and light truck counterpart extend beyond the obvious distinctions of facility size and repair equipment. The major difference is that there’s significantly less insurance industry control of customers that has the passenger car repair market spinning its wheels. However, steering plagues some of the heavy truck markets.
Dean Hancock, owner of Bob Johnson’s Body Shop, a 27,000- square-foot facility in Columbia, South Carolina that does big business in heavy truck repairs, purchased the business from the original owner after a career as a paint manufacturer’s representative. His shop is located in a prime spot where three major interstate highways come together, which means big volume for the five heavy truck body shops in his area.
Hancock said the biggest difference between the heavy truck collision repair market and the passenger car market is the lack of DRPs. Since there are only a fraction of the number of heavy truck body shops as there are automobile body shops, one would expect there would be proportionately fewer direct repair shops.
Writing an estimate in the heavy truck collision repair shop is a job in itself. “We usually have a database on the car side of the business, but on the truck side there is no [database] for parts prices,” Hancock explained. “You have to call and get a price quote from a dealer, and, of course, there are price changes.”
As for aftermarket parts, Hancock says the only ones available are bumpers, radiators, A/C condensers and air charge coolers.
Hancock’s shop gets a lot of its business from the rental truck fleets, such as Penske, Ryder and Budget, due to the high rate of accidents their customers experience. And his business is on an upward trend in terms of sales, which is the opposite of its passenger car collision repair shop’s sales. The labor rates are quite different as well. On the car side, rates are $40/hour for body and paint, as opposed to $63/hour for the truck body repair, $100/hour for frame repairs, $84/hour mechanical repairs and $35/per refinish hour.
One rather surprising characteristic of the paint used in heavy truck repairs is that the materials have twice the solids content as those used in refinishing cars and light trucks.
“If you’re painting a truck all over, you walk around it one time and you’re done, as far as color,” he said. He also said one cannot blend the basecoat colors because they halo as a result of staying wet so long.
Hancock also said there are major differences in the frame repairs done on heavy trucks and trailers. His 55-foot-long frame machine pushes instead of pulls on the damaged frame rails. And because of the lack of available frame dimension data for the heavy truck repair market, the measuring process is very much an old school process with reliance on centerline gauges, levels, trams and tape measures.
Without exception, the lack of qualified heavy truck technicians is the biggest challenge facing heavy truck shop owners.
“The average age of the heavy-duty technician is older than the population of technicians at large,” said Tony Molla, vice president of industry relations for Automotive Service Excellence (ASE). “According to the department of labor, about half of the currently working auto techs will be eligible for retirement in the next seven to 10 years. Do the math and you come up with a lot more [heavy duty] techs leaving the industry than the auto techs in general. I don’t have any hard statistics beyond that, but I can tell you that the most frantic and numerous calls I get looking for techs comes from the trucking segment.”
Hancock says the area vo-tech schools aren’t teaching how to repair SMC, which is the leading material truck cabs and hoods are made from. He also said most of his heavy truck techs are former car technicians.
The reason is because there’s little welding involved in the repair of truck bodies. “All these panels on the trucks are riveted together…you take the old panel, drill the holes, rivet them on and you’re done. Once my guys get a taste of this, they don’t want to go back to repairing cars.”
Big vs. Little
The claims adjustment process is quite different from that of the passenger car collision repair business. Hancock says that most claims are written by independent appraisers, who essentially go off his sheet for the parts prices.
“The biggest thing with all of these guys is that they want you to sign a piece of paper saying that you’ll do it for such and such price, and I always refuse due to the possibility of hidden damage,” Hancock says. “Of course, they don’t like that because they don’t get paid to come out for supplements.”
Another characteristic of the heavy truck repair business is the larger numbers. That is, the parts cost of the bigger wrecks is a major component. Hancock told of the repair of a Peterbilt he did this year that cost $55,000 to get back on the road. Just the hood cost over $12,000,
“A lot of car body shops don’t have to have the cash flow in their checking account to handle the heavy truck repairs,” Hancock said. “If you get a rolled-over truck, it’s going to be five to 10 days before you get your parts, and once you get the parts, it’s going to take three to four weeks to repair the truck. Meanwhile, the parts bill has come due, so you have $20,000 to $30,000 you’ve got to lay out there for parts.”
Hancock’s shop isn’t necessarily dependent on the OEM supplier for repair parts for the aluminum truck bodies made, for example, by Morgan. The reason is because there are alternative suppliers that sell side skins and roof skins for the reconstruction of the aluminum bodies.
Heavy Trucks vs. Passenger Car Industry
|Steering||Less insurer control|
|Lack of qualified techs||Fewer available aftermarket parts|
|Lack of standards||No database for parts prices|
|Higher repair costs|
The Insurance Game
The InValtek, Inc., is a heavy truck collision repair and paint shop in Patterson, New Jersey. It lays claim to being the body and paint repair shop for over 120 local municipalities’ fire and ambulance departments in the New Jersey-Metro New York area. In business since 1993, Valtek specializes in heavy truck repairs, refinishing, fire apparatus, body modifications, repairs to construction equipment and RVs.
Brian Vesley, one of Valtek’s partners, said the claims environment runs the gamut with every variation of the settlement process in play. “We try to write a full ticket for the full repair from the get-go. We don’t look to supplement if we can avoid it,” he said.
Vesley also says the labor guides are for the most part incomplete and grossly inaccurate.
“The facts in the databases are mere guidelines to approximate what it’s going to take to do a repair,” he explained. “The databases just don’t take into account all the variations and the conditions and the equipment on a particular vehicle.”
Valtek uses but doesn’t rely on Mitchell’s estimating guide. Estimating trucks, according to Vesley, is time-consuming and unlike the task of writing an estimate to repair collision damage on
“You can multiply the typical labor database problems by two or three because they haven’t torn down these vehicles and they don’t have good in-house time studies of them, just as they don’t have good in-house time studies for some of the car procedures,” Vesley says. “There isn’t the volume and there isn’t the demand for the product. It’s a reasonable approximation, and you’d go to hell in a hand basket using a reasonable approximation for the basis of your business.”
Vesley said the process of submitting a final invoice to an insurer will vary from carrier to carrier in terms of the degree of difficulty in getting paid. He did, however, say that getting inexperienced claims personnel in his shop to settle claims is happening less these days, likely due to the hard way to go they get from the management of Valtek.
The leverage one of Valtek’s customers has with its insurance carrier is greater than that of the average car owner, whose rate of filing claims is but a fraction of a commercial fleet customer’s.
“They know what it takes to fix these things, and they know when things are right or wrong. And when we explain it to them, they can take up the cause with their insurance company,” Vesley said.
With respect to steering, Vesley’s experience is markedly different from Hancock’s down south. When asked whether steering was an issue, Vesley’s response was, “Absolutely, positively, and beyond a shadow of a doubt…we are heavily steered against.”
“Based on my experience, it’s my belief that the DRP shop does not save on an overall cost basis, but is a way of controlling the non-DRP shops and is a way of keeping the stated labor rate low, as well as the stated time for procedures low,” Vesley said. “They cover that with supplements. If you compare apples to apples, you can see the alleged cost savings and benefits of the DRP shop are illusory.”
Vesley said that despite the cost of the DRP shop being higher in the end, the net effect of the arrangement is good for the insurers due to their ability to contain what the non-DRP shops can charge.
One direct result of the high fuel costs is the lower number of recreational vehicles on the road today. Hancock says his shop hasn’t seen an RV in months, which is clearly the result of the cost of operating the mammoth vehicles. Truck traffic, despite being essential to commerce and the support of the American way of life as we know it, has slowed down, too. This will inevitably reduce truck accident statistics, which will in turn impact the heavy truck body shop business.
Vesley said the effects of the higher fuel costs have yet to ripple through the economy enough to result in fewer collisions. However, he noted that in general, people and commercial interests are looking for ways to not spend money. On the other hand, the fact that some of his customers have considerable investments in the heavy duty trucks – some as high as $500,000 to $600,000 – make a good case for maintaining them.
“If you maintain that vehicle, it’s a lot cheaper than trying to go out and replace them,” he said.
Vesley said there is limited training available in the heavy truck repair business, most of which is through vendors in suspension, steering and brake components. Some is available from the American Council of Frame and Alignment Specialists (ACOFAS), which is the trade association of heavy truck repair businesses. In addition to his involvement with ACOFAS, Vesley is the legislative chairman for the Association of Automotive Service Providers-New Jersey (AASP-NJ).
A number of years ago, I had the opportunity to attend the annual meeting of the Truck Frame & Axle Repair Association (TARA). One of the more remarkable aspects of that organization, which was at the time administered by the late Silvie Licitra, was the distinct fraternal nature of the association. That is, one must be sponsored to become a member and not everyone gets in, which is unlike the automotive trade associations we’re more familiar with today.
Vesley said the repair industry’s access to OEM repair data, such as frame dimensions, is limited. He attributes this lack of data to the fact that there are so many configurations for the chassis used in heavy trucks.
“The OEMs have not historically had the volume that warrant a lot of detailed engineering in specifications,” he says. “[Based on the fact] the frame is essentially two parallel rails, there isn’t the need for it. Plus, the documentation tends to be very expensive.”
But Vesley has suggested that the manufacturers and their dealer networks would like to keep this information to themselves.
Vesley noted the lack of standards for heavy truck body repair shops, which is currently being addressed by his state’s licensing laws. For something as basic as the ability to actually take a heavy duty truck inside the shop, there are a number of marginal players that claim to be equipped to do heavy truck repairs that can’t even do that.
“I can’t tell you about the numbers of shops that claim to be able to do truck work and then have to take pieces off the truck to bring them into the paint booth because their paint booth is one built for passenger cars,” he says.
While the heavy duty truck shop industry doesn’t have the overcapacity issues the passenger car body shop business does, there are always those looking to curry favor with the insurers by offering lower prices for repairs.
For as long as there have been insurers looking for less expensive ways to get vehicles repaired, there has and will always be operations looking for a greater share of the marketplace. Still, for the most part, heavy truck collision repair retains the dynamics of the auto body shop business of 30 to 40 years ago. That is, the shops tend to set the prices for repairs and there’s much less of the tail wagging the dog that takes place in the shops of many passenger car body shops. Given the large investment required to get into the heavy truck repair business, it looks to remain this way for as far as we can see into the future.
Writer Charlie Barone has been working in and around the body shop business for the past 35 years, having owned and managed several collision repair shops. He’s an ASE Master Certified technician and a licensed damage appraiser, and has been writing technical, management and opinion pieces since 1993. Barone can be reached via e-mail at [email protected].