By CRAIG FREILICH
POTSDAM – From one truck and one driver in 1994, a Madrid Avenue trucking business has grown to 145 trucks and 175 workers -- and more work is coming in.
The probability of a new contract with a Canadian papermaker would mean more trucks and more drivers, said owner Randy LaValley of Lavalle Transport, Inc. (LTI).
But the price of fuel, a trucker’s biggest operating expense, is more worrisome the higher the price goes.
Still, LaValley says he believes the national economy is recovering, and he is in a position to see that trend earlier than most people. “The trucking industry is the first to see a slowdown hit and the first to see it recover,” LaValley said. “I think it’s looking good.”
“It looks like we just got a contract with a paper manufacturer in Canada.” LaValley said they are “in the final stages” of closing the deal. If he gets it, it will mean 3,000 more loads a year.
“That will mean 10 to 20 more trucks, and more drivers.” He expects to know for certain about the deal in the next 30 to 60 days.
Fuel Prices a Challenge
But “fuel’s tough,” LaValley said.
LaValley said that since the late 1990’s, when fluctuations in fuel prices – mostly up – became the norm, haulers began adding fuel surcharges to their contracts with customers. If the fuel price went up, they would charge more, and less if the price went down again.
The manufacturers went along, LaValley said, “because the manufacturers want to form long-term relationships, and they wanted to ensure that haulers were viable into the future.”
But still, “For a carrier, fuel is still the single highest cost,” and a hike in the price of diesel can mean another $50 or $100 per load.
“For a manufacturer, fuel is a minimal cost. Say you have a load of 5,000 pairs of sneakers. For the manufacturer, that’s two cents a pair.”
Started in 1994
LaValley started in the business in 1994, when Anchor Motor Freight, for years the sole road transporter of General Motors vehicles, closed its Wellesley Island depot, and suddenly there were lots of cheap car carriers on the market.
“I took a chance and bought one, and marketed to local car dealers to bring cars back and forth to car auctions. Before long I was running 10 trucks. I liked the business. You could grow infinitely,” he said. The auto body repair business he had been running could only grow so far, “only to the capacity of the population.”
By 1996 he was buying flatbeds for an Alcoa contract, and vans for contracts with Acco and with paper mills.
Good Work Ethic
Now he signs paychecks to 175 drivers, mechanics and office workers, “all good people. People in this area have a very good work ethic,” said the 46-year-old Potsdam High School grad. “There are lots of good people who will give you an honest day’s work. They care about their work.”
As time has gone on, “those who proved themselves leaders were promoted,” to positions in dispatch or the brokerage, “and they do what needs to be done.”
“My main job now is sales, buying equipment and meeting customers.”
LaValley has turned his knowledge of the national economy to use in building his business, even during the worst of the recession, to the point where now he has 100 trucks based at his Potsdam yard at 20 Madrid Ave. and another 45 at terminals in Ohio and California.
While he managed to take advantage of the downturn to buy equipment from haulers getting out of the business, he admits he missed the early signs of the economic downturn a few years ago.
“2007 was great, and then one day it just started slowing down. Everyone started competitive pricing, trying to keep their trucks busy, but they couldn’t make money,” LaValley said.
“We knew it would last for a while, and ’08 and ’09 were very lean years. But in 2010 we began to pick up a bunch more work.”
He said he got a contract with plumbing fixture manufacturer Koehler. “We bid aggressively. We bought equipment, because most people in the business were downsizing and had equipment for sale, very reasonably priced. New equipment was also aggressively priced by manufacturers, who were trying to capture market share. A trailer priced at $26,000 in the fall of 2010 costs $31,000 now.”
“We knew the economy wouldn’t stay down forever. The world doesn’t stop spinning. The pace was off, but people were still buying cars. People had to eat. And it’s definitely coming back.”
LaValley said during the worst of the slowdown, manufacturers were shipping much less because “their inventory piled up. They were stockpiling it. Well, suddenly it’s ship, ship, ship. And their inventory is dropping, and they’re manufacturing more, and the general public is being called back to work.”
He said by late 2009 and early 2010, he “saw things starting, and we knew the Koehler contract would see us through.”
And now, he says, new business continues to come in.