CRISES in the moving industry?

Crisis by Rupert Ganzer at Flickr 4139019520(1) CRISES in the moving industry? Do you know what the acronym RISCED stands for? What about CRISES?

According to Dan Gilmore, Editor-in-Chief of the Supply Chain Digest, and Greg Andrews at Georgia Tech, they basically mean the same thing – TROUBLE!

In an article entitled Transportation Tsunami Coming Again?, Gilmore wonder if the country is “headed back to a another crisis in transportation, or, more specifically, trucking?”

Both freight transportation gurus cite basically the same concerns about:

Capacity – both qualified human resources and equipment
Rates – pricing pressures and enterprise reverse auction buying habits increase discounting
Infrastructure – three years of recession forced layoffs of tenured, experienced workers
Security – FMCSA's new CSA regulations will cull some drivers and equipment from industry
Energy – full prices are the highest they've been this time of year and keep rising
Shortage of drivers – transportation industry has lost over 30% of rolling capacity since 2008.

Many experienced van line executives and traffic managers in the specialized household goods moving industry should be harboring the same concerns – if they're not already!

Recently Linda Bauer Darr, President of the American Moving and Storage Association, started a discussion at the national trade association's members-only Linkedin group by asking Are things starting to turn around for you at your companyy?.

Attached to the question was an article from FoxNews.com, Housing, Moving Industries Struggle to Bounce Back Years After Bubble's Peak, that discussed some of the challenges of the relocation industry during the recent "Great Recession".

In the FoxNews piece, Darr estimates that “the moving industry hemorrhaged about 40 percent of its annual business and shed roughly 20 percent of the jobs it once offered. Federal statistics indicate a similar contraction, suggesting that the transportation sector may have lost up to 300,000 jobs over the last two years.”

In response to a question asked about the biggest industry challenges for Summer 2011, Darr replied “Enough trucks and van operators to fill the need – particularly with the BRAC moves starting this Spring and moving into Summer.

Those participating in the thread hint that business volume is increasing. As if to support the trend over seventy percent (70%) of the first few responders to a new Lindedin Poll asking “What volume changes does your moving and storage, or mobility services company expect to see in 2011 compared to 2010?”, expect a 10% or more increase during the industry's rapidly approaching peak season.

These optimistic agent and carrier projections were reinforced by Scott Michael, AMSA's Vice President of Military & Government Relations. In the same Linkedin thread, Michael reported that “January was another strong month for the interstate moving industry. Our study carriers reported household goods shipment pickups increased by 15.7% over last January. As Linda indicated above, Corporate moves continue to lead the way, up over 25% versus the previous January.”

It's probably safe to assume that the service provided in January (one of the slowest months in the relocation business) met or exceeded the quality expectations of most carriers' regular customers or contract clients by most members of the full-service and do-it-yourself moving industry.

What happens, though, when business levels starts to pick up – traditionally in April and May? Should household goods shippers and industry executives be concerned about the significant loss of experience and capacity that AMSA's Darr alluded to? Will the military's new Defense Personal Property Program (DP3) for procuring household goods moving services and realigning base personnel affect the industry's peak level of performance and overall quality service standards?

If so, what effects might this across-the-board escalation have on the ability of premium moving companies to meet the needs of ALL of their individual, corporate and government customers with the expected increase in peak season volume this year?