RELO Roundtable…a gathering place

Reprinted with permission of Worldwide ERC®, from the December, 2009 Household Goods Moving and Storage Issues edition of MOBILITY magazine. 

As an increasing number of mobile employees are being offered lump sums to move their personal effects to the destination location, some are encountering and being taken advantage of by unlicensed household goods movers. “Rogue operators,” who prey on these unsuspecting transferees, are a real threat to the workforce mobility industry. Darr offers an overview of the problem, as well as outlines how the American Moving & Storage Association (AMSA) has taken steps to identify and correct this issue through its ProMoverSM program.

By Linda Bauer Darr 

Traditionally, when an employee’s company has arranged for his or her household goods to be moved to a new city, that worker probably was anticipating the transfer would go smoothly—after all, why would the employer use a mover with a poor performance record? This employee also may have taken some comfort knowing that even if there were a problem, eventually it would be resolved between the employee’s firm and the mover.

But as the 2009 recession has demonstrated, many examples of traditional thinking are now out the window, and the “new normal” means today’s transferees must be savvier than their predecessors. Most employers that regularly relocate workers had long-standing relationships with movers they used successfully in the past and trusted; but that direct relationship is changing, says David Marx, president of Chicago, Illinois-based New World Van Lines, which handles corporate transfers exclusively.

“The next generation coming up is increasingly being asked [by the employer] to take a lump sum. The employer is giving them X amount of dollars and telling them, ‘You find the mover, you find a rental place, you find your own home… and here’s your money to spend.’ Those people are going on the Internet to find a mover, and some will get burned by not checking them out in advance.”

And, in today’s difficult economy, the risk of making a wrong choice when it comes to selecting a mover has grown: it can be tempting to go with the lowest bidder regardless of promised quality. The downturn also has prompted an increase in the number of con artists looking to make a fast buck. Known within the moving industry as “rogue operators,” these unethical characters are in business to rip off unwary customers.

It is why a new mover certification program from the American Moving & Storage Association (AMSA), Alexandria, Virginia, called ProMover^SM has become even more important to both the individual transferee and the corporate workforce mobility professional. AMSA, the non-profit trade association primarily representing the domestic moving and storage industry, began receiving complaints from both regulators and its members several years ago that unlicensed movers were beginning to flourish as an increasing number of consumers began using the Internet to find a moving company.

The reason was simple: virtually anyone with a little time and effort could throw up a professional-looking website filled with photos and testimonials and claim to be a reputable mover. And, although the U.S. Transportation Department through its Federal Motor Carrier Safety Administration (FMCSA), requires every company offering interstate moving services to be federally licensed, the rogues found that no barrier: many simply either did not display a motor carrier (MC) number, while some actually used a phony set of digits on their website.

For the unsuspecting customer, hiring a rogue mover can lead to headaches ranging from simply being overcharged from the start to having their possessions “held hostage” by the mover until the customer agrees to pays additional fees either hidden or not stated in the original contract. And contract is the key word: once the customer has “signed on the dotted line,” local law enforcement will treat the complaint as a contract dispute and be unable to resolve the dispute in a timely manner.

Geographically, AMSA saw a jump in the number of Internet-based complaints in the states with the highest migration totals—typically in Florida, Texas, and California. Yet, cash-strapped state governments often found they could not afford effective levels of enforcement. That disparity led the trade association to develop the ProMover^SM program during the past two years. The goal was, and remains, to provide consumers with an easily-recognizable symbol of an ethical, quality mover who will provide reliable levels of quality.

Inside ProMover^SM

Here is how the program works: AMSA staff screen all existing interstate mover members annually, as well as new applicants. Companies are reviewed for any felony convictions of the company’s owners, officers, or majority stockholders regarding matters over which the FMCSA, the Surface Transportation Board (STB) or any state consumer protection agency has jurisdiction; verification of company ownership with the appropriate state corporation commission; and a review of each applicant’s website for improper advertising. Each new applicant also must complete a signatory agreement attesting it will comply with FMCSA and STB regulations and uphold the AMSA Code of Ethics. The ProMover^SM program thereby promotes ethical principles in the moving and storage industry and works with federal and state governments to mitigate unethical moving practices; and it clearly separates professional movers from the rogue operators. But, most important, the program aids consumers by providing an identifiable measure of quality while at the same time enhancing the moving industry by encouraging and recognizing high professional achievement.

Approved AMSA interstate ProMovers^SM are authorized to display a special logo on their website, on vans and uniforms, and in any marketing or public relations efforts to give their potential customers a starting point when selecting a professional mover. To guard against unauthorized use, each ProMover^SM is required to include its motor carrier number between the legs of the “M” logo. This allows customers to check the number using an online search at www.moving.org (or at FMCSA’s site) to make sure the company is what it claims to be.

“We see this as our industry’s version of the Good Housekeeping Seal of Approval,” said David Hauenstein, AMSA vice president for compliance services and government affairs. “And it’s a sign of how serious we were about this that our board was willing to lose dues-paying members who didn’t make the cut.”

AMSA spent the summer of 2008 screening its more than 3,400 members and found 200 who were expelled after first being given a chance to shape up. The program then was officially rolled out this past January and has since been gradually achieving traction in the marketplace. To further boost industry quality, AMSA’s new strategic plan includes expanding the program beyond just the company to such client-critical functions as packing and loading household goods.

The Effects of the Downturn

The unexpected collapse of the U.S. housing market beginning in 2007, combined with the current recession, however, has meant significantly fewer Americans moving than in recent years, whether on their own or through corporate transfers. In April, the U.S. Census Bureau released figures showing that the number of people who changed residences dropped from March 2007 to March 2008 to 35.2 million, which was the lowest number since 1962, when the nation had 120 million fewer people.

This lack of mobility suggests Americans have been unable or unwilling to follow any job opportunities that may have existed around the country, as they have in the past. And that lack of movement, say some economists, could have an effect on the economy by reducing the economic activity generated by moves. U.S. Census said that Americans’ mobility rate, which has been declining for decades, fell to 11.9 percent in 2008, down from 13.2 percent the year before and setting a post-World War II record low. Moves between states dropped the most, to half the rate recorded at the beginning of this decade.

This trend also has been reflected at the corporate level: according to AMSA’s quarterly data publication, Industry Trends, the decrease in corporate account shipments, known within the sector as national accounts, in the first half of 2009 brought this category down more than 33 percent from its 2005 peak year (post 9/11). A study by Atlas Van Lines, Evansville, Indiana, found that more than half (52 percent) of 320 respondents predicted they will decrease the number of employees they move by the end of this year, the highest percentage of firms to predict a decrease since 1975, when 38 percent did so. The slowing of workforce mobility is mainly the result of companies trying to save money wherever they can. In the Atlas study, almost six in 10 (58 percent) companies reduced workforce mobility expenses in 2008.

But Marx sees things beginning to stabilize. “We see the volume of moves returning to where it was in 2008—and it’s no longer dropping below 2008 levels. We’re also seeing the average weight per move stabilize, which has been dropping for about three years. It’s finally stabilized now down to under 10,000 pounds for an average move.” He attributes that to the ailing housing market, as corporations cannot move many homeowners “because they’re taking a beating on their homes. They’re still bringing in new talent to their organization… but they’re very cautious about moving someone who owns a home.”

William Graebel, GMS, CEO of Graebel Companies, Aurora, Colorado, sees the pullback carrying over to the domestic office moving industry, as well. “Corporations worked to manage expenditures against generally severe budgetary constraints over the past 12 months,” he says. “There’s much greater scrutiny with respect to the utilization of corporate controlled real estate and facilities and increasingly, the typical corporate footprint is being targeted for delivering fixed-cost reductions. Addi­tionally, with the evolution of collaborative technologies and tools, there is an increasing ability for teams and employees to work remotely, and fewer ‘assigned seats’ and square feet per employee in many corporations.”

Trends in International Mobility

What about trends in global workforce mobility? According to Marx, many U.S. corporations with global operations are bringing their overseas staff back. “We’re seeing a lot more short-term assignments,” he says, “and [that involves] taking an air shipment, not an ocean shipment. They’re just not selling their home here.”

Fewer resources, combined with a jump in unethical “movers,” means employers and their internal workforce mobility professionals would be wise to advise transferees to be even more cautious when selecting a mover. “I think the ProMover^SM program has to be presented to the relocation companies so they can present that to their corporate clients,” says Marx. “In fact, we just had this discussion with Cartus—we said, ‘Look, if you’re going to have all these lump-sum folks—and they’re going to book a mover through the Internet, they’re going to get burned.’”

This new reality also means a strategic reassessment at AMSA, which has received direction from its members to start to take the association in a new direction, to focus more on providing solutions to what these trends are indicating—more do-it-yourself moves, wider use of containerization, and responding to the increasing issues surrounding long-distance moves, such as the potential for long-term labor shortages and protecting the environment.

AMSA also is stepping up efforts to promote the ProMover^SM program at the corporate level. “For many years we failed to engage the third-party relocation companies in our business, but it makes much more sense now that there are now more individuals from corporations in the market doing their own thing.”

Graebel also sees the benefit:  “The ProMover^SM designation brings a certain amount of respectability and credibility to the legitimate professional corporate mover. Our industry has too many ‘rogues’ who taint our industry and lead to price/value compression or commoditization. As an understanding of the requirements for receiving the ProMover^SM designation permeates throughout corporate America, we should see a positive impact on the perception of our industry and the service levels delivered to corporate clients.”

Marx is realistic about the future. “Corporations have gone through their budgets for this year—they’re working now on next year—and they know now where their business will be in the year ahead. It means they’re making the decision to permanently close what had been temporary plant and office closings. I think we’ll see more of that happening in 2010, so we, too, are now ready for an economy that’s not going to grow as it has in the past. The number of corporate moves has been going down for a long time—this recession has just re-set it at a new level. And we’re probably going to stay at this level for years.”

 Linda Bauer Darr is president and CEO of the American Moving & Storage Association (AMSA), Alexandria, Virginia.  Click here to find a ProMover^SM near you.