Challenges and Advancements in the future of Moving and Storage
Household goods moving is arguably the oldest service line in the relocation process. It has remained largely untouched but is changing faster than ever, thanks to forward thinking and technology. This digital transformation has created new trends and even a few challenges that are having a profound impact on our industry.
Take, for example, mobile phones. This is easily the one piece of technology we can’t do without today. Up until the 90’s, there was no easy way to communicate with our drivers. We’d have them drive a few hours and then call in from a payphone to get their next set of directions. If something came up during those few hours, it was impossible to stop or re-direct them. Determining how far to let them drive between stops was a calculated risk.
Thankfully, technology has had a tremendous positive effect on our industry. Not only can we reach our drivers at any moment, but they can also be located with pinpoint accuracy in real-time. We can see whether they arrive at a destination on time and the length of their morning breakfast stop. Our customer management systems keep us on track and ensure we stay on top of various touch points. Electronic survey cube sheets and inventories have also been welcome advancements.
The War On Talent
The biggest challenge the household goods industry currently faces is labor. Although the cost of living has increased substantially in the past 25 years, today’s crews are hired at a wage that doesn’t compare. In 1992, fuel averaged $1.13, compared to $2.37 today and the median home price has risen from $113k to $236k—both increases over more than 100%. In contrast, today’s labor crews are hired at a wage that is just over 50% higher than it was 25 years ago.
Our moving and storage companies are competing with Target and Wal-Mart for entry-level crew members. Even bigger is the fight to attract and retain drivers. Working, just 5.5 days a week, the average Wal-Mart driver earns $82k in their first year. Even more telling, the driver’s job doesn’t include loading or unloading, but simply driving to a dock and relaxing in the cab while the contents are loaded and unloaded.
Comparatively, household goods drivers are under a great deal more pressure. Not only are they expected to hire laborers, which is a challenge due to the wages, but they must also provide top-notch customer service while in the transferee’s home. The average income for these road warriors is $80k-$100k. Some veteran drivers can gross substantially more, however, have to worry about the expenses of operating their truck and also are charged back for a percentage of claims, regardless of fault. These factors, among others, have pushed the average age of our household goods drivers into the mid 50’s!
Disrupting the Industry
Since the late 2000’s, there has been a significant drop in average weights of household goods. Home libraries are on the decline thanks to e-books and homes with big offices and large furniture are on the decline. Ikea has disrupted the furniture industry and is impacting our business, as well with fashionable furniture that can be put together in the time it takes to have a couple of beers. Although it might not survive more than one move, the weight and space that it takes up when moved is small compared to traditional furniture made from real wood!
The challenge with smaller shipments is getting them serviced properly. An over-the-road driver typically does not want to pick up these sub 5000 lb. shipments from a residence. The time involved with positioning and setting up that 70-foot tractor trailer at residence to load or unload these shipments is not financially attractive. Many of these shipments are picked up by local agents and brought back to the dock for pick up by an over-the-road driver. These shipments can sit on a dock for weeks waiting to be picked up and are often delivered to another agent in the destination city so they can deliver it out.
This has caused high transit times, large delivery windows, and typically higher claims due to the multiple handing of the goods, as they can be handled piece by piece six to eight times when not hauled directly door-to-door. The delivery window comes with certain expectation in the relocation industry, however, to a first time transferee, a 10-day window raises questions. In a world where we can order just about anything and receive it the next day or even the same day, much of the household goods industry is well behind the times.
A Solid Solution
Thankfully, there are other options. Domestic Containerized Moving is certainly not new. In fact, we have been providing this service regularly for over 20 years and Bristol Global Mobility has been using this service for five of those years. Selling the concept has not always been easy, but relocation companies and corporate clients are showing more interest than ever. In fact, at the most recent Worldwide Employee Relocation Council Conference in Atlanta, a well-attended session covered this and other trends in the household good industry.
Naturally, an increase in interest draws additional players to the market. Competition from new companies and van lines or their agents getting involved with this method of moving goods is great for the consumer. More competition always leads to better service, lower pricing, and additional options. If decreased transit times, claims and delivery windows are important, then domestic containerized moving is the right solution!
There are some variances in the details of how each supplier services domestic containerized moving, but at the core, they are similar. Typically, a crew at origin loads the transferee’s goods into containers of varying shapes and sizes or into freight trailers at a residence. Usually, these containers are brought back to the local agent’s warehouse and hauled by a freight company to the destination city. From there, those containers are delivered to the residence. This means the goods are handled twice as opposed to the three or four times that a typical small shipment is handled by a van line.
The other benefit is that many companies, like ours, are able to offer a guaranteed delivery date during the initial call with the transferee. That means no spreads, no more days and weeks of waiting with anticipation for the driver or customer service representative to call, letting the transferees know when they will be reunited with their possessions. Hiring managers will be happy to know that their new employee can fill their schedule ahead of time and be more productive since they are not required to block out a week or more of their schedule to receive their household goods.
Because freight companies are being used, transit times are greatly reduced as the goods move directly from city to city. Over-the-road van line operators need to zig zag across the country to keep their trailers as full as possible for every single mile.
So, does it cost more? It can, especially on shorter mileage trips, but as the miles go up the cost comes down and can even be lower than the traditional service model. A big picture mobility manager will look beyond the transportation cost. If domestic containerized moving can reduce the transit time by a few days or even more than a week, how much will the corporation save on temporary living expenses? If storage is needed, the costs are far less than those of a van line due to the goods already being in their own storage containers. Beyond what you can measure are the soft costs of productivity for the transferee.
Domestic containerized moving is not a flash in the pan trend and many feel it will become the norm. Ask your relocation service or household good service provider about their thoughts on this quickly expanding aspect of relocation!