Rising volume and other factors are driving auto salvage auctions to invest in their catastrophic response teams and physical sites.
Insurance Auto Auctions Inc. and rival Copart Inc. have invested this year to expand the number and size of U.S. auction sites and to improve catastrophic response capabilities. Before hurricane season, IAA added more acreage at 22 auction sites — including 10 in Texas and Florida where major hurricanes struck in August and September. Copart has added a dozen auction sites in the past year; IAA has added six auctions in 2017.
It's a response to client demand, said Jeanene O'Brien, IAA senior vice president of global marketing.
"Higher repair costs, more population in coastal regions and more frequent extreme weather are factors that have driven our investment into the company's catastrophic response process and expansion," she said. "The company's catastrophic response process is a critical service offering that delivers measurable value to its clients."
Copart CEO Jay Adair said catastrophic response capability is more critical than ever as the U.S. population and vehicle ownership rise.
He's not certain that storms are getting worse, but the impact is dramatically greater for any that hit the U.S. mainland. "The last major hurricane that hit Tampa, the population might have been 10,000," Adair said. "Now 4 million people live there."
In December, the EPA estimated 25 million Americans live in areas subject to coastal flooding.
Similarly, Harvey caused more damage because more people are living in the Houston area, Adair said. "We got more volume in 30 days than we [typically] do all year in Houston."