Return of Accessorial Service ChargesBy Eric Anders • Jul 9th, 2012 • Category: TRENDS IN RELOCATION
Last month a young couple relocating for the first time professionally emailed me back a completed Moving Cost Estimate Comparison Tool form.
They asked for an “insider's” opinion about which of the three company estimates would best meet the budget needs of moving their two bedroom apartment from Jersey to Texas.
What's an accessorial service charge?
She was leaning toward a small independent mover with a cheaper price. He preferred the name brand recognition of a larger multi-location van line agent despite their higher cost estimate.
The weight estimated by all three companies was within several hundred pounds of each other but the prices of the two agents affiliated with larger van lines differed dramatically. I asked if the line item detail on all three in-home estimates was the same.
Yes, he responded. Except two of the companies said they would charge extra if their driver had to use stairs, an elevator, couldn't park directly in front of their new apartment at destination, or had to use a shuttle truck in Austin.
Both estimators referred to the additional costs as accessorial service charges. One said they were sort of like the additional fees that some airlines were now charging for airport surcharges and extra luggage, or that travel hotel chains were tacking on to their standard room rates for in-room cable/movies; a microwave, refrigerator or minibar; and high speed internet or WI-FI service.
Long Carries? Elevator & Flight Charges?
Years ago, the American Moving and Storage (AMSA) decided to bundle the additional charges included in the commercial interstate tariff the national trade association published for their 2800+ members. Items include in the consolidation included stair, elevator, and long carry charges in excess of 75 feet, and additional vehicle or labor charges required if some type of auxiliary shuttle service was needed to complete the move.
At the time, industry executives justified the roll-in by saying it was less confusing for inexperienced, budget-conscious consumers and corporate clients who were trying to do an apples-to-apples comparison of moving cost estimates to see the same exact line item detail.
Then in 2007, the Surface Transportation Board (STB) announced an end to collective ratemaking within the household goods shipment industry. The STB was established in 1996 under the U.S. Department of Transportation to assume some of the regulatory functions that had been administered by the Interstate Commerce Commission when Congress abolished it in 1995.
Apparently the Board determined (without much industry input) that collective ratemaking by the AMSA's Household Good Carrier's Bureau for all of their members was no longer in the best interest of household goods shippers.
The STB decision means that every interstate mover is now required to establish and maintain their own tariff and every customer or corporate client is required to understand the pricing parameters and discount levels used during negotiations with individual household goods carriers.
Same ol' same ol'
The competitive pressure and shrinking shipment size that's causing this apparent resurgence of accessorial service charges is just déjà vu to most tenured industry salespeople. After all … that's the way it always in the full service moving industry until 2007.
Unfortunately, there's not many of them left to train the newbies on how to compete under this “new” business paradigm.
What's happening in your market? Are you seeing a return of these additional service fees? How are you responding to these new sales challenges?
Have questions or need professional assistance with an upcoming moving and storage issue, or help choosing a domestic or international relocation product or service supplier?
FOLLOW US and SUBSCRIBE at: