April showers and May flowers are signs that another summer in the Moving and Storage business is about to begin. Today, 65% of household good moves occur between Memorial Day and Labor Day. These peak summer demands will once again challenge the industry’s shrinking fleet of interstate drivers. Finding balance in the peaks and valleys of this cyclical business model along with the utilization of other capacity strategies is key to long term success for any mover.
The Perfect Storm: Driver Shortage and Increased Service Demands
The past few years the transportation industry has faced a significant challenge in the recruiting of quality drivers. Today, we continue to remain heavily vested in working with the American Moving & Storage Association (AMSA) to identify recruiting opportunities as well as creating new programs to offset the reduction in long distance drivers.
What we know:
- American Trucking Association (ATA) is reporting the trucking industry as a whole is short nearly 50,000 drivers and expects to be nearly 200,000 drivers short by 2020.
- The moving industry is especially challenged in recruiting new drivers given the physical demands of loading and unloading the furniture as well as the frequent requirement that drivers are away from home for days or weeks at a time.
- All trucking industries are investing in non–traditional solutions
To further complicate things, household goods moving has seen a significant shift in service demands that change the way we do business;
- Many customers, especially millennials entering the workforce, are opting for self-pack and load with non-traditional container programs
- Containerization, self-pack or professional pack, is a growing service requirement
- Utilization of alternative capacity is up over 50% the past 3 years
Capacity Management Solutions
Successful movers today are attacking the capacity management problem with creative multi part solutions for their “Alternative Capacity” programs. These programs work to provide the high service level that families expect when working with a professional moving organization. Examples include;
- Do-it-yourself (DIY) Containerization: This allows the person moving to pack, load, and deliver their goods into a small shipping container. The container is transported via a Less-Than-Truckload (LTL) carrier from origin city to destination city. This option frequently provides for shorter transit times for small shipments, is easily scheduled and is less expensive. The significant downside is the risk of personal injury, zero coverage if any items are lost or broken, additional lost days at work, and it adds a layer of stress during an already stressful time for a family.
- Professional Containerization: This option again utilizes a smaller shipping container and has the mover providing the labor to pack, load, and deliver the goods. The advantages are similar to the “DIY Containerization” with the exception of being lower in cost. Due to hired professionals handling the goods, insurance coverage is available and the other DIY downsides are eliminated. Over the past few years the industry has improved claim frequency and customer service results in the handling shipments in this manner to near those of the traditional moving model.
- Seasonal fleet growth: This program employs seasonal crews who work in the industry during the summer months. This option has had limited interstate success due to the small pool of CDL drivers who are fully qualified and interested in only summer work.
- Use of alternative Third Party services: During the peak season, trailer shuttle fleets are established to transport trailers from origin city to destination city. Local agents are contracted to handle the packing/loading/delivery of the goods. This alternative generally is utilized for larger shipments and has similar positives and negatives noted above in “Professional Containerization”.
- Capacity Calendar: In order to protect key customers in the summer months, movers have developed and utilized capacity management software. The program measures future capacity availability by day and region. When projected capacity is limited in a specific region, companies close availability for their private transferee bookings. This allows enough capacity available for their corporate customers.
Winning The Battle
Today, the movers who are best servicing their customers have a two prong approach;
- Effectively retain, recruit and train long distance drivers. The model of the same driver handling the packing, loading, transporting and delivering of a shipment remains the most cost effective solution, has the best customer satisfaction results, and the most favorable claims experience.
- Develop and implement a comprehensive alternative capacity program as described above. Proper training and operational controls in managing these alternatives are critical to maintaining high customer satisfaction results required by today’s consumers.
Movers who are able to maintain flexibility to meet the service challenges that the driver shortage is presenting while being focused on the changing demands of relocating transferees, will win in today’s marketplace.