Remember when 7 pounds weighed 7 lbs?By Eric Anders • Jul 27th, 2012 • Category: FEATURED STORIES
I had a short but enjoyable exchange recently with an inquisitive MBA intern.
She's working on a research project for a client that focuses on the United States Department of Defense's (DOD) latest household good procurement initiative, the Defense Personal Property Program (DP3).
DP3 is the latest move-management iteration introduced by the Military Surface Deployment and Distribution Command (SDDC) for transporting the household goods and personal effects of approximately 600,000 military service members, civilian government employees, and their families undergoing a domestic or international permanent change of station (PCS) transfer each year.
With a annual budget of $2.2 billion, SDDC is the largest customer to the moving industry in the U.S.
On the drawing board, this complicated new self-managed relocation program was supposed to provide “world class” moving services, valuation benefits, and personal flexibility to anxious transferees throughout their entire PCS process.
Unfortunately, for the hundred of thousands of transferees using the unfamiliar and often confusing “One Stop and Shop” website each year, this new automated 'self-counseling' process for administering military relocation entitlement benefits is more complicated than ever.
DP3 relies on the Defense Personal Property System (DPS) at www.Move.mil for it's framework. DPS was originally designed to manage over twenty old, outdated, and disparate “legacy” Total Operations Processing Systems, or TOPS government computer databases into a single, modern J2EE based platform.
When the Military Traffic Management Command (now SDDC) started on this redesign project in 1995, the purpose was to be “partnership” between government and industry. Once completed, it would provide a single, centralized, web-based system which would be responsible for all aspects of the military's gigantic personal property management program, including:
- Qualification of Domestic and International Transportation Service Providers (TSP)
- Submission of TSP transportation and accessorial service rates
- Military and government service member counseling and review of entitlement options
- Scheduling shipment packing and pickup dates
- Arranging delivery dates direct to residence or storage
- Automated invoice management and direct payment to participating vendors
After three years of intense shakedown, DPS does almost all of that. It just doesn't do any of them very well.
My inquisitive young visitor contacted me because she was interested in the source of information I used in a recent article about how the DOD created their own household goods capacity problem.
"Historically, 80% of each every move scheduled has something change - often within 3 days of the planned load date!"
I explained that in 1995 I was involved in re-engineering the household goods, electronic and tradeshow, and special commodities operating divisions for America's most recognized name in moving.
To analyze the number of players, process steps, handoffs, and rework involved in handling each type of shipment, we queried the frequency and detail in the order change information of shipments that moved in 1993 and 1994.
Then we specifically looked at orders had some piece of customer information change in the eighty-plus data fields between the time of initial registration and the actual pick up date. At the time, the well-regarded national van line handled about 40,000 shipments each year.
Some changes were minor. For instance, the new destination street address, building or apartment number, delivery zip or postal code were updated. Sometimes an anxious customer simply wanted to add another contact name or phone number at origin or destination. Or a conscientious sales person or move coordinator would insert an elevator or dock reservation time.
Frequently, though, the scope of services required to complete the move changed enough to affect the entire load planning process.
- A living room arrangement, bedroom suite, or TV antenna were added back in to the estimated size because they didn't sell in the garage sale.
- The landlord required everything be moved out before noon.
- A new extra pick up or delivery at a business office address was included.
- The packing list was updated after the local crew finished boxing everything up.
- New furniture or equipment was delivered that needed to be added to the estimated size.
- The corporate account paying for the move authorized one or more of the family automobiles, ATV's, garden tractors, or outdoor play-sets to be disassembled and shipped.
Waiting game pays off
What we found is that the longer operations waited to plan a load, the less rework and better service could be provided to ALL customers if most of the potential changes that were going to occur were allowed to shake out or take effect.
While anxious consumers and corporate clients didn't immediately appreciate the delay of load day confirmation in our new procedure, and drivers and their families resented the wait in finding out about their next load plan, the van line's on-time pick up service improved from 91.2% to 97% and the company's customer satisfaction approval rating jumped from 67% to over 90% in the household goods division. The overall customer approval component of the van line's driver rating system also improved as a result.
We also found out that seven pounds doesn't really weigh seven pounds.
Measure twice, dispatch once
Ever since I got into the business, movers everywhere have used a uniform standard industry measure of seven pounds per cubic foot to estimate the size and calculate the density of household goods worldwide. It was fairly easy to calculate the reliability and accuracy of the estimating standard since the Interstate Commerce Commission required that every interstate order had to be weighed.
My first boss, a retired Colonel, told me that the Department of Defense and State Department developed a standard household goods 'cube sheet' shortly after WW II in an effort to provide some type of uniform estimating tool to determine the cost of moving military service members and government employees around the world.
The seven pound rule was the defacto cost estimate industry standard used throughout the world until Jimmy Carter deregulated the moving industry in the U.S. in 1980 when he signed the Household Goods Transportation Act.
The internal procedures used to manage the introduction of the binding (fixed price) moving estimate option by one the largest national van lines that year meant that drivers no longer had to weigh all shipments.
Suddenly – almost overnight – seven pounds stopped weighing seven pounds!
The new binding estimate methodologies quickly developed by a hand full of national van lines and independent movers to compete with the thousands of new, inexperienced household goods motor carriers and property brokers meant that old estimating tools could now be individually 'massaged' and “manipulated” by every interstate mover just to close a sale.
Prior to deregulation, linehaul transportation costs and accessorial service rates had always been dependent on the weight estimated by competing companies using the 7 lb standard.
After 1980, though, the density of household good not only could be 'estimated' lighter but they actually became lighter … and larger!
"One Word: Plastics"
The very first day I started working in the movin' business I was taught how to use a 'hump strap' to lift and move stuff on my back and a 'reefer' dolly to strap-on and roll what was too heavy to carry.
Both training sessions were taught by old, experienced bedbuggers, and both were required learning if you wanted to last until the end of a hot summer day during the industry's peak moving season.
Back then furniture was heavy. It was made with real wood – mahogany, oak, cherry, and pine – that was held together with steel, iron, and thick semi-solid wood glue. It weighed every bit of seven pounds per cubic foot!
Then in '80s there was an explosion in the use of plastics in the manufacture and construction of everything being used by industry and consumers.
Although not many people in the moving industry were paying attention, the “heirloom” family dining room gathering table group that traditionally consisted of four leaves and six chairs and, when cubed, was once estimated to weigh approximately 400-500 lbs, now weighs 170-200 lbs.
Grandma's heavy leaded glass-front oak buffet with marble top and matching pie rack that she never moved from her kitchen because, combined, they weighed 250-375 lbs now weights a mere 150-190 lbs.
Likewise, the Ikea version of the solid mahogany coffee table with the 3/4”-thick tempered glass top that used to require to two men to carry now weighs just a little over a hundred pounds.
Today the 21 cu. ft. classic “Town & Country” wood wagon with removable slat sides could easily carry four kids and the family's picnic cooler because it was so solid and sturdy weighs just 37 pounds.
And the steel tricycle with the solid rubber wheels that was once too heavy for a three-year old to place upright without help, now weighs only 10 lbs.
Monstrous furniture for magnificent McMansions
During the 80's, not only did the household goods and personal effects of the relocating public get lighter, but they also got a lot bigger and bulkier. This monstrous new furniture was built, advertised, and marketed to upscale interior designers to be the perfect style and modern accoutrement for the often extravagant, oversized homes, and expansive grounds and gardens being built in suburbs and exclusive gated communities all across America.
Cannonball living and bedroom suites, huge overstuffed modular room groups, matching La-Z-Boy sofas, loveseats and recliners, and wide-screen TVs powered by gigantic outdoor satellite dishes became hugely popular with baby boomers in the twilight years of the 20th century and first decade of the 21st.
Light-weight wicker replaced wood and ceramics. So did faux-German Schranks, huge lightweight nests of matching end-tables, plastic planters, and paper mache urns; artificial trees and dried floral arrangements, cheap Sterilite bookshelves and storage bins, and oversized Corelle dishware and glasses.
This created a double whammy for small business agent owners, independent movers, over-the-road owner operators, and third party labor service contractors whose antiquated moving and storage industry compensation contracts were all based on transportation weight, not size!
Faced with rapidly rising insurance, fuel, and labor rates, most independent owner-operators found the bottom line of their small businesses constantly threatened by shrinking revenue caused by larger, lighter, and ever more deeply discounted transportation and accessorial service rates. Many of the compensation models were unrealistic and often non-compensatory, out-of-date, or “grandfathered” corporate contracts and onerous third party move-management agreements.
Jammin' and crammin'
One of the most interesting industry tidbits that came out of our re-engineering effort seventeen years ago is that lousy drivers load more densely than the very best household goods van operators in the movin' business.
It makes sense. Especially when the size of your paycheck is calculated on a percentage of the transportation and accessorial service charges that are based simply on load density. If you are desperate for revenue, you do everything possible to get more weight in your wagon – regardless of how much jammin' and crammin' you have to do to get it there.
By 1995, only a few national account contracts and the Department of Defense (DOD) and General Services Administration (GSA) tenders of service still required that all interstate shipment be weighed.
To measure load density, then, we analyzed thousands of these billed contract carriage orders and sifted through mountains of computerized trip plan data for the entire household goods fleet looking for a pattern.
First we noted the difference between the estimated weight initially registered by the local agent prior to the actual pick-up date against the billed weight invoiced to the payer under the terms of the applicable tariff or contract.
This not only gave us a peek at each sales person's estimating accuracy performance, but also allowed us to calculate an average for the agency office they worked for.
Then we looked at the cubic size of the order registered by the booking agent, and compared it to the actual amount of space that the driver reported it took up in his trailer after he loaded it.
This analysis provided two valuable metrics. The pounds per cube density factor used by the salesperson to rate the order, and the pounds per cube density factor that the assigned van operator achieved once it was loaded and weighed.
We determined that, for the most part, relatively new sales people all across the U.S. used the standard 7 lbs per cube metric to estimate weight – up until their second year in the business. After that the density factor appeared to be manipulated and massaged quite routinely.
The second finding, however, had more far reaching implications on operations. We determined that below-average owner-operator who carried a very low (#5) quality driver rating loaded their assigned household goods shipments at an average density rate of 6.3 lbs per cubic foot. Meanwhile a #1 rated “Elite Fleet” van operator loaded at an average density rate of 5.1 lbs per cubic foot.
This means that if two drivers were both assigned a 51'L x 96”W drop frame trailer that had a interior capacity of 3800 cubic feet, the marginal five-rated driver would manage to get, on average, 4500 pounds, or 23% more weight (and distributable revenue!) on than the conscientious, quality focused van operator wearing the white halo.
There are also an inverse relationship between time on the job and load density. Newbies jammed and crammed while their more experience – and more careful – counterparts took their time and protected the customer contents in their possession to the best of their ability.
Why the tremendous discrepancy in productivity?
It was actually influenced more by which orders household good's load planners and agency dispatchers assigned to which van operators more than anything the selected drivers did themselves.
Historically, higher rated drivers with more experience and tenure have:
- Better on-time service results
- Fewer property damage claims
- Less accidents or injuries
- A minimal number of DOT compliance or safety issues
- Better overall customer service scores.
Their personnel and DOT qualification files are generally packed with earned certificates of completion for professional training; a long list of safety and service accommodations, formal industry-service acknowledgments from owners and managers; and, grateful notes of appreciation from customers and corporate clients.
When it comes time to move a VIP customer, multi-national C-Level executive; Army or Air Force General, Navy Admiral, U.N. Ambassador; or U.S. President, a good planner and dispatcher always picked the best driver with the highest performance scores.
Of course these high-profile moves unusually included a long list additional services such as:
- Vehicle transportation for the corporate and family auto and oversized toys.
- Extra padding and protection for antiques and artwork
- Packing and Crating of High Value items
- Exclusive Use or Expedited Service
- Move-in and move out maid service
- Complete full-service pack jobs
ALL OF THESE additional services destroy load density and kill van space.
How much space do you have?
After a few years in the business, you could always tell in which van line environment a new recruit cut his wisdom teeth when the following routine exchange took place between dispatcher and driver.
Dispatcher – How much space do you have available?
Driver – Room for about 5,000 pounds!
Dispatcher – Five thousand pounds of what? Used household goods, ping pong balls or iron ingots?
Driver – Huh???
Even in today's technology driven world, some well-respected independent household goods carriers, largest national van lines, and most military transportation service providers (TSPs) and their affiliated agents still don't record the amount of cubic feet a new order is estimated to take up.
Glance through the current orders on today's Available Tonnage Lists and you'll see what I mean!
And despite the fact that most of the trucks and trailers manufactured for the moving industry have the interiors clearly marked in 100 cubic foot increments, very few van operators report (or dispatcher's request) the actual 'space occupied' results after they finished loading and weighing each order.
This time of year inexperienced (or desperate) load planners are hoping – praying - the household goods drivers they assign can stuff 28,000 lbs into their hi-cube trailers. Financially strapped van operators, meanwhile, hope just to get at least 25,000 lbs on board to make the trip worth their effort.
That's probably why there are so many overflows still sitting at origin around the country today!
Are shipments SIZES shrinking … or getting larger?
Mayflower Transit has been tracking average household goods shipping weights since the early '90s.
In 2009, Mayflower Transit LLC, a Unigroup Company, reported that their average move in 2008 weighed in at 6,751, a decrease of 2 percent from the 6,830 pounds recorded in 2007. The van line reports that its average shipment moving weight has decreased by nearly 10 percent since the study began in 1997.
John Bisney, a public relations spokesman for the American Moving and Storage Association (AMSA), notes that this is the same trend observed by the domestic trade association that represents more than 4100 members “for the past five years or so”.
According to Bisney, “that’s more a factor of people cutting back on buying household effects, along with split family moves where one spouse moves for a job and the other remains until they can sell the house”. “We don’t collect cubic footage information”.
Why not? Probably because most of their members don't keep track of it due to the seven pound rule!
But look at what happens when you start considering the relationship between "cube" and professional "loading" ability.
|Industry Average||6,751 lbs ÷ 7.0 lbs per cu. ft.||= 964 cu ft.|
|Bad Driver||6,751 lbs ÷ 6.3 lbs per cu. ft.||= 1071 cu ft.|
|Good Driver||6,751 lbs ÷ 5.1 lbs per cu. ft.||= 1324 cu ft.|
Although the 37% variance is noteworthy from an operations standpoint, Bisney hints at the dangers of using an average load density factor from 1995 and comparing to the productivity results achieved by the industry's shrinking hauling fleet today.
Ever since the economy tanked in 2008, the relocation benefit options being offered to transferees and new hires have been scaled back considerably for everyone but the most senior employees, corporate officers, military brass, or government dignitaries.
Corporate vehicles, family autos and oversized toys aren't being routinely authorized to move inside the van with household good anymore. Neither is extra padding and protection for antiques and artwork, special packing and crating of hi-value items, or exclusive use and/or expedited service.
Instead of being offered to the over-the-road driver as a carrot to take a small or out-of-route shipment or deeply discounted unprofitable order, complete full-service packing and crating jobs are now being retained by the booking or origin agent as way to rescue some revenue from each move.
So if the average shipment size and transportation weight is shrinking, the interstate fuel charge is disappearing, and the accessorial revenue that used to be the gravy on the meat and potatoes of the movin' business aren't being paid by customers and clients, how are the industry's van operators and their families surviving in this new economy?
DOD created their own household goods capacity problem – RELO Roundtable
What’s killing the household goods moving industry? – RELO Roundtable
Movers find average shipment size is shrinking – RELO Rountable
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