RELO Roundtable…a gathering place

In case you missed it, UPS just raised their transportation rates.

On July 1, 2011, the nation's fourth largest LTL carrier announced a general rate increase averaging 6.9 percent covering non-contractual shipments in the United States, Canada and Mexico. The rate adjustment takes effect on Aug. 1, 2011, and applies to minimum shipment charge, LTL rates and accessorial service charges. 

The move follows a 5.9% rate increase in October, 2010.

UPS, incidentally, is a general freight common and contract carrier – not a household goods mover. So why should this pricing news concern anyone shopping for, administering, negotiating; buying or selling long- or short-term local, or long distance moving and storage, move management, or mobility service procurement service contracts?

UPS and their formidable competitor FedEX are considered to be two of the most reliable economic bellwethers in the transportation industry just based on the sheer volume of goods they move. Historically most of the trucking industry in North America generally sets their business course to take advantage of the same economic tradewinds that these two powerhouses do. That includes movers!

This somewhat aggressive pricing announcement suggests that there may be some hope on the horizon for household goods drivers and small business owners still involved in providing packing, crating, transportation and storage services.

Freebee giveaways, fixed price (binding) estimates, and aggressive discounting on individual relocations and corporate and government move-management contracts have made it difficult for movers to make a profit when combined with rapidly rising energy and insurance costs during the last three years.

It's no secret that America's domestic moving industry has been shrinking gradually since World War II. Since the start of the recession in 2007, however, the implosion of the country's financial and real estate markets has forced the contraction to occur much quicker than anytime in the last six decades..

As a result, the nation's van lines and relocation move management companies were the first to begin jettisoning their more expensive, experienced executives and tenured managers. As corporate pricing became more competitive (and unprofitable), many small moving and storage businesses and independent owner-operators whose livelihoods depend of the health of those two market sectors closed their doors or were forced to look for more stable and financially reliable employment. Industry estimates place the loss of driver and equipment capacity in the household goods moving sector during the last three years at 30%.

Unfortunately, the widespread reduction in moving equipment and warehouse resources combined with loss of the well-trained, professional movers and the veterans who managed them is now taking its toll on customers and clients trying to plan their relocation during this year's peak moving season. This normally occurs between Memorial Day and Labor Day.

Initial estimates from around domestic and international moving industry suggest that the amount of new business booked to move in 2011 exceeds last years peak period volume by more than 25%. And 2010 was a good year!

This is not only true in many regional markets and large metropolitan areas, but also in smaller communities that have fewer relocation related resources. In fact, moving and storage operators and truck rental companies in some small towns are reporting growth rates approaching 40%. Some of this recent activity, undoubtedly, is due to the new round of foreclosures hitting the real estate market.

Seeing the handwriting on the wall, many responsible relocation product and service suppliers and state, national, and international industry associations began warning potential customers and clients to book early and expect delays. Most tried to control their volume through their pricing. That's why some customers are seeing a spike in peak season rates and other are finding that carriers are no longer accepting new business.

Despite these efforts, however, some unscrupulous or selfish moving and storage salespeople, move brokers, or independent rogue operators will still quote individual customers and corporate clients a 'low, low moving price', the “cheapest” storage or truck rental rate, or the 'extremely competitive” contract terms they're demanding. It's no surprise these crooks manage to attract the attention of lots and lots of interested cost-conscious customers.

In today's cash-strapped marketplace, many corporate bean counters, hiring managers, HR professionals; third-party move-managers, and individual shippers planning a corporate, government, or personal relocation still treat household goods transportation just like any other commodity. With all of the high costs associated with relocation, they've learned to negotiate the cheapest deals they can.

And that's OK!

Just don't expect a truck or professional van operator and a well-managed, responsible crew will show up when expected.

The media is filled with horror stories this time of year of desperate homeowners, corporate transferees, and PCSing military personnel who were left stranded without a mover because they (or their employer) found exactly what they were shopping for.

Before you start your search for a relocation service provider, it's best to decide “Do I want a good rate or a reliable move?”. This year many disappointed customers are learning that they're not necessarily the same thing!

Don't choose the company with the lowest price when making your carrier selection. Pick the one who will provide the best value!
 
You won’t be disappointed!

Related Articles and Relocation Resources:

Moving Cost Estimate Comparison Tool – RELO Roundtable

Avoid "Rogue" Moving Companies – Arizona Department of Weights & Measures

Red Flags for Spotting Rogue Movers – Federal Motor Carrier Safety Administration

Transportation of Household Goods in Interstate Commerce – Consumer Protection Regulations – Federal Motor Carrier Safety Administration

Is shopping for a mover in a virtual marketplace safe? – RELO Roundtable

How to Find a Reputable Mover: A Professional Guide – RELO Roundtable

How to Choose an International Mover – RELO Roundtable

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