This piece was originally published in September, 2006; the BBB information was updated with the latest statistics in July, 2012.
Although time will diminish the value of some of the data, the argument for uniform industry standards is stronger today because of the reduced oversight of state and federal authorities, the failure of traditional advertising to attract and engage potential customers, and the strong push of new social media for corporate accountability and public transparency.
When was the last time that you invited a customer over to the house to have a cup of coffee…and go through your family’s underwear drawer?
Probably never, right?
No one would willingly endure the raised eyebrows caused by the risqué suggestions emblazoned on the ol’ man’s boxers or expose the personal affection stitched into Mom’s cute little pastel panties.
What would a stranger think if they found out that the sixteen year old’s lingerie was all purchased at Victoria’s Secret? Can you imagine the disgust of finding faded skid marks inside all of Junior’s holey whitie tighties. That’s private stuff!
When those closest to you leave the house in the morning, the world sees only the personal statement manifested in the crisp, clean appearance displayed by each member. What pushes it out, holds it up and keeps it clean is hidden underneath… except to those they trust or whose attention they are trying to attract.
Now…when was the last time that you purchased a stock or mutual fund without looking into the company’s “underwear drawer“?
Never, right? Most informed people would think it foolish and ill advised to consider committing their lifelong personal savings, inheritance, or retirement nest egg to any investment vehicle without doing an in-depth analysis on the products they were considering.
Everyday both large and small investors routinely dig for the “dirt” using standard performance metrics available in a variety of resources. Whether it’s the stock market report in the local paper, a personal broker, subscription to Barron’s, or any of the vast number of financial resources available online, most people try to reach their monetary goals by reducing their risk and increasing their satisfaction through their due diligence.
Anxious to attract these investors, many publicly traded companies spend huge amounts dispensing volumes of information to satisfy different levels of analysis. To gain investor trust, they not only invite potential customers to dig through their skivvies, they publicly flaunt their victories over their business obstacles. Those with the most appealing performance indicators are touted and pursued for their success. The poorest performers are dumped and shirked. The “also-rans” huddle, refine their business strategy, and jump back into the game.
This type of competitive business environment constantly raises the bar on product performance, increases shareholder value and results in more satisfied investors.
Unfortunately today’s consumers interested in researching – and investing in – relocation products don’t have the luxury of the same available comparative information.
Regulatory Requirements ≠ Quality Service
To police this huge number of companies, the Interstate Commerce Commission (ICC) use to require carriers submit an Annual Performance Report to the Federal Motor Carrier Safety Administration (FMCSA), Office of Enforcement and Compliance. This instrument was originally designed to provide consumers with uniform performance information on all regulated household goods carriers.
This once dreaded, always complicated and rarely believable compliance requirement died with the ICC Termination Act in 1995. Consumer protection oversight responsibilities were transferred to the Department of Transportation (DOT) and delegated to the Federal Highway Administration (FHWA). Then in 1999, with the enactment of the Motor Carrier Safety Improvement Act, consumer protection responsibilities were once again transferred to the FMCSA effective January 1, 2000.
The Annual Performance Report was perceived by many in the industry as a rather useless piece of bureaucratic regulation. Although it required each company to provide uniform statistics that could be used by consumers to do performance comparisons, the information was not validated on a routine basis. Since most participants were privately held companies and the ICC had few informed enforcers, some carriers routinely “massaged” their results thus misrepresenting their performance not only to the government and each other, but, more importantly, to their customers.
About the same time that the performance report met its demise, widespread consumer acceptance of the Internet began to flourish. In July 2001, it was estimated that 165.2 million users were logging in each month. Nine years later, an estimated that 240 million Americans (77.3% of the population) will use the Web everyday; by 2011, 2 billion users will click on worldwide.
An April 2012
by the Pew Research Center’s Internet & American Life Project showed that 66% of adult Americans now have broadband internet connections at home, an18% increases from just three years earlier. Seventy-five percent of all users and 88% of those with the high speed access admit to using the power and “always on, always open” convenience of the web to look for product information.
It should be no surprise, then, when a consumer, whether an individual or corporate entity, turns to the convenience of their computer instead of the phone book when considering relocation providers.
Although the dot.com era was short lived, it epitomized the persuasive power of the new technology to satisfy a wide range of public queries. It also piqued the interest of many legitimate and not-so-legitimate entrepreneurs including many unscrupulous and unlicensed household goods carriers, independent movers, agents, move brokers and relocation company wannabees.
With little overhead, few salaries, and minimal equipment expense, these wily entities leveraged their knowledge about the perceived authority and dynamics of the medium to increasingly prey on unsuspecting consumers. By copying the most effective designs and content information from legitimate mover websites, they can afford to pay a variety of the most effective internet search engines to weasel their way to the top of a user’s returned sites. A potential customer who Goggles “moving company” will find an overwhelming list of 1.4 million choices online – and there aren’t even any licensed carriers on the first page.
In a March, 2001, a consumer protection report entitled Federal Actions Are Needed to Improve Oversight of the Household Goods Moving Industry
, the General Accounting Office (GAO) advised Congressional committees that “the primary responsibility for consumer protection lies with consumers to select a reputable household goods carrier, ensure that they understand the terms and conditions of the contract, and understand and pursue the remedies that are available to them when problems arise.”
Although both the GAO and DOT recognized that “the majority of the consumer complaints (96%) concerned lost and damaged goods, untimely pickups or deliveries, inaccurate estimates and disputed rates,” and that the “most egregious complaints do not involve agents of major moving companies; most concern small companies that act as independent movers,” there was no enforcement effort to fix the problem. Consumers were essentially left to their own devices to reduce their risk and obtain satisfaction if – and when – they decide to relinquish their budget, all of their worldly possessions, and their trust to a relocation provider.
Customers Use Social Media to Police Mover Quality
Since the household goods industry has no uniform reporting requirement nor centralized resources that rate the performance of carriers, those interested in doing their due diligence before they invest in a mover frequently visit online “informational” resources like bbb.org and epinions.com or the more controversial ripoffreport.com, movingscam.com, or movingadvocateteam.com to dig through each candidate’s “unmentionables.”
Most are shocked at what they find. You would be too!
These sites are like online report cards filled with flunking grades. Many contain subjective descriptions about the listed companies’ service failures, poor estimating practices, ineffective communications, hostage situations and the incompetence of personnel throughout the entire moving process.
Yet hidden deep within these one-sided, personal accounts are nuggets of useful information in which most respondents define their own critical success factors. If considered collectively, they show golden opportunities for process improvement to legitimate service providers in the industry.
In 2011, the nation's Better Business Bureaus (BBBs)
reported that with 7,395 complaints filed against them, moving/storage companies ranked seventh as the most frequently checked out industry with BBB offices in the U.S. Inquiries jumped from 274,388 in 2001 to 1,065,610 in 2011.
Thanks to the pervasive power of the internet there was a 388% increase in the number of reliability reports issued during just a ten year period, and, collectively, the moving industry jumped even closer to the top of the list of most suspicious companies preying on the American consumer.
Why would so many future customers want to rummage through movers’ private stuff?
First, they’ve been warned. While doing their research they find thousands of websites, magazine articles, news accounts, state attorney general offices, real estate brochures, consumer advisories and federal government resources that warn those considering a relocation to be wary of the moving company they select to provide their service.
Even the industry’s own voice, the American Moving and Storage Association (AMSA)
, cautions visitors to its public facing website
about the unscrupulous and unlicensed household goods carriers, independent rouge movers, unethical agents, anonymous internet move brokers and scam relocation companies that have flourished online after Congress responded to public pressure and deregulated the transportation industry in 1980.
The second, more compelling reason is that most are looking for value in their relocation provider. Basically they want to find a mover they can trust for the money that they are going to have to invest.
When the economy stagnated after 911, many American companies scaled back their hiring plans and transfer policies as a way to reduce their cost. Instead of being offered a full service relocation package, many new hires or transferees were instead presented with scaled down lump sum benefits or reimbursement options.
Employees who previously had their entire move planned for them found they were arranging all of the service providers themselves. These inexperienced consumers became easy prey to the Web vultures who pitch low, low prices while still promising great professional service.
In 2001, the AMSA presented convincing arguments to the Subcommittee on Highways and Transit of the Committee on Transportation and Infrastructure calling for increased enforcement against unscrupulous household goods carriers and internet brokers in response to these growing threats.
During the testimony, the Association urged Congress to act to authorize additional funds to have DOT fulfill its responsibility to uphold the existing law and force the closure of the legal loopholes that fostered abusive practices of internet scam companies and rogue movers.
Nearly two years later, the FMCSA acknowledged to the U.S. Senate Committee on Appropriations that they had requested additional funds in the 2004 budget to hire a “limited number of requested resources to supplement the three (emphasis added) full-time commercial investigators devoted to their Household Goods Enforcement and Compliance program”…“to inoculate the public against these predators.”
The government administered their shot to a bent over, waiting public in June, 2003. Entitled “Transportation of Household Goods; Consumer Protection Regulations”
, the interim final rule requires that “interstate household goods carriers provide written estimates, have an arbitration program for individual shippers, deliver goods on agreed-upon dates, publish truthful advertisements containing their name and DOT number, and weigh shipments of customers given non-binding cost estimates.”
What the American public really got was consumer protection legislation that is more confusing than it is helpful. Although it addresses many of the industry issues raised by the AMSA, and provides shippers with a longer list of requirements they should expect from legitimate moving companies, it doesn’t offer consumers clear benchmarks or performance standards to access the quality of the thousands of service providers that fall under its scope.
To make things worse, enforcing the new, beefed-up rules is going to be even more difficult. After 911, the focus and responsibilities of FMCSA changed by necessity. Although they now have five full-time headquarters employees who work exclusively on household goods issues, they’ve been forced to reallocate some resources toward improving the security of the transportation of the nation’s hazardous materials. Visitors to the section of their website entitled “What Happens When You Move?“ are politely advised that “consumer-related issues cannot be our primary focus, we are doing what is practical given the agency's finite resources”.
So…who’s going to protect our customers from us? Perhaps us.
The Need for Uniform Performance Indicators
In November, 1999, the International Organization for Standardization released their newest version of their international quality management system – ISO 9001:2000 – for use in organizations who do “design, development, installation and servicing” of their product. The focus of the new standard was to address how to meet customer needs more effectively.
This ISO version had more appeal to the moving industry than the 1994 standard because it focused on internal processes and customer satisfaction rather than technical specifications and procedures. Expectations of continuous process improvement and tracking customer satisfaction were more explicit at this revision. Because of its structure, the new standard placed greater emphasis on customer focus, quality planning, process measurement, continuous improvement cycles, quality goals and objectives, and total participation within each organization.
To be certified to the ISO 9001: 2000 standard, participating companies were required to:
- Identify the goals they wanted to achieve
- Identify what others expect of them
- Obtain information about the ISO 9000 family
- Apply the ISO 9000 family of standards in their management system.
- Obtain guidance on specific topics within the quality management system
- Establish their current status, determine the gaps between their quality management system and the requirements of ISO 9001:2000
- Determine the processes that are needed to supply products or services to their customers
- Develop a plan to close the gaps in step 6 and to develop the processes in step 7
- Carry out their plan
- Undergo periodic internal assessment
- Decide if they needed to demonstrate conformance.
- Undergo independent audit
- Continue to improve their business
Regardless of their size and motivation, most report they were able to obtain measurable operational benefits shortly after deploying the standard. Today, those organizations that continue to rigorously follow the ISO methodology have found that the payback is strengthened through effective internal auditing and total management review of their system performance.
What kind of performance? The metrics are different among the certified companies but generally involve critical success factors like closing ratios, sales and marketing trends, packing and warehouse loss problems, service failure rates, damage or accident frequency levels and costs, estimating and invoice accuracy, length of the billing cycle, labor ratios, sales performance, effectiveness of training and safety programs, driver and equipment compliance, claim settlement times, number of shipments involving arbitration, customer service responses, etc.
In short, all of the ingredients that define the operational efficiency of each department, participating service provider, or domestic or international division are scrutinized by different levels of employees trained to be internal ISO auditors. Their job is to determine the gaps between their company’s quality management system, the internal goals of what they want to achieve and their ability to meet the needs of what their customers expect from them.
To validate their results and ensure the accuracy of their program, movers certified to the ISO 9001:2000 standard must also arrange – and pay for – an outside independent audit of their quality control processes. The same industry that chafed when completing the ICC’s Annual Performance Report now voluntarily forks over big bucks each year to have an independent, outside auditor certify that their internal metrics and processes are good enough to ensure that the organization, its agents, van operators and affiliates all meet their customer needs more effectively.
Over time, successful use of these ISO processes have helped most of these companies reduce their claims exposure, improve their service performance and operating ratios, increase their estimating accuracy, reduce the accounting and claims cycle times, bill their clients correctly and, most importantly, increase their customer satisfaction ratings. If they haven’t improved, at least they have a plan to get there.
With so much time, money and internal effort expended to address 96% of consumer complaints and improve customer satisfaction, you’d expect the industry would be proudly waving their report cards in the face of the shopping public. Despite their impressive performance results, however, most moving companies don’t widely share the intimate details underneath their professional image…except with those they trust or the corporate client whose attention they are trying to attract.
Instead they use their slick collateral material, experienced sales staff and well-developed websites to pitch their use of newest professional equipment and latest technology, boast of employing only the best-trained, most skillful service providers, and claim to have the friendliest, most helpful relocation coordinators. Glowing testimonials posted from anonymous customers attest to their honesty and professionalism.
The majority display their ISO certifications or FIDI-FAIM/ISO (for international companies) accreditations and proudly point to the fact that they subscribe to AMSA’s vague Code of Conduct and fail-safe national arbitration programs. Most are full fledged, dues paying members of state moving and storage associations. Long family histories or successful van line affiliations are often held up as proof validating their experience and tenure. And, of course, everyone is trustworthy.
Yet no one publicly shows their undies and shares their operational performance with the general public!
Since the government isn’t really concerned with any but the most flagrant violators and has legislated that the primary responsibility to select a reputable household goods carrier lies with the public, the captains of the industry and their associations should set their own course for consumer protection. They have all of the tools and resources necessary to collectively develop uniform, measurable indices, set objective benchmarks, and define the different quality standards of moving excellence using the same values and audit regime employed to manage their ISO compliance.
The problem with this type of proposal is that not everyone in the industry will be able… or willing to participate.
Some movers have never heard of ISO and don’t keep track of their operational performance results. Although they give an honest day’s work for an honest day’s pay, they don’t have any quality processes in place. The stuff underneath is functional enough to keep them clean, but sexy enough to keep the customers coming back. Word of mouth keeps them successful.
Certain industry participants could be embarrassed by their performance results. Their company report card may show marginal execution in several different areas that need immediate improvement, or repeatedly poor results in one phase that is critical to customer service. Their processes probably have skid marks and holes everywhere.
The industry giants might be afraid that David could topple Goliath. An independent, local mover or smaller van line might post more impressive results and meet their customer needs more consistently than the big agent or major carrier in the same market. Their large corporate client or dedicated repeat customers might find the performance measurements more appealing on the little thing down the street.
And then there’s the industry’s black sheep, the crooks that give all movers a bad name and don’t care.
Interestingly, each of these objections supports the very reasons that such an idea should be considered. Upper management and association leaders should embrace it as a way “to help the public by providing an identifiable measure of competency, while aiding the moving industry by encouraging and recognizing high professional achievement. A carefully designed and well-managed self-regulation program can serve as a useful method of addressing unwanted and unprofessional business behavior. It also puts more emphasis on the value of a professional move.”
Sound familiar? The AMSA already recognizes the benefits that such a proposal could achieve. Their Certified Mover Program has been widely advertised and used by all levels of service providers in the industry to “aid consumers by providing an identifiable measure of quality while, at the same time, enhancing the moving industry by encouraging and recognizing high professional achievement. Under the voluntary program, movers will be required to observe a professional code of conduct and to provide service …in a manner that promotes confidence in the household goods moving and storage industry.”
The only things missing, however, are the metrics – the competitive glue that would make the program stronger. And the independent auditors – to keep the system honest.
Discovery + Disclosure = Improved Trust
By developing measurable levels of performance, moving and storage management and association leaders can put considerable teeth in their existing quality program, raise the bar on performance output, and give the public much more useful information to consider than just a Code of Conduct symbol.
Instead of huddling at the bar or in the club house at the next state or national convention, all attendees should come prepared to retire to a large meeting room, lock the doors and drop their drawers. They shouldn’t be allowed to leave until they have objectively compared the “stuff” in their individual operating results, identified uniform critical success factors, developed, and then approved standardized performance measurements and acceptable industry benchmarks for each step of the move process. In short, they need to follow the spirit (if not the 1-13 list) of ISO requirements above.
Then, capitalizing on the strength of the association’s domestic and international membership and the power of the same “always open” medium that customers now use to shop, individual organizations could publicly flaunt their victories over their business obstacles by proving the professional value of their company, agents, affiliates and van personnel, not in terms of price, but individual performance.
It wouldn’t take much to get such a program off the ground. The idea would germinate quickly if just one company with management that had already achieved impressive results had enough testicular fortitude to flash the public online showing their provocative unmentionables. Once the bar is placed, their accomplishments become the standard that everyone else will be measured against.
Can you imagine a diligent consumer asking Mighty Mo’s Magnificent Moving Men about their missing items experience or AAA Affordable Access Internet Relocation Portal what their claim cost per hundredweight results were during the first quarter? For their agent? And their drivers?
How many unscrupulous and unlicensed household goods carriers, internet move brokers or scam relocation companies would (or could) post their independent audit results showing their estimating accuracy, or the direct load and on-time delivery percentages, and average inconvenience claim expenses for shipments that moved during the month of June…during the last three years?
It would give those five guys at FMCSA something useful to do with their new consumer protection legislation if these rogue companies decide to copy the industry’s format but couldn’t support their advertised results,
The dynamics of such a program would force the entire industry to compete at a much higher service level by constantly forcing improvements throughout each organization. Each office employee, packer, van operator, helper-laborer, warehouse worker, and administrator would have to be trained, ingrained and empowered to become part of their company’s customer service solution.
Those with the most appealing performance indicators would be pursued for their success. The poorest performers would likely be shunned. Everybody else will meet in a warm spot each year, compare notes, refine their ISO business strategy, and jump back into the game.
The whole moving industry, however, would be more professionally prepared the next time an informed consumer stops by to visit and asks…
”What’s in your underwear drawer?”
Three things a virtual mover might not tell you – RELO Roundtable
How does the moving industry measure quality? – RELO Roundtable
Moving Cost Estimate Comparison Tool – RELO Roundtable
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