Trends In International Moving

Terry R. HeadPresident – International Association of Movers

Who / What is IAM?

The largest international trade association & advocacy group for household goods forwarders, movers, removal companies, logistics & service providers

Membership includes 2,400+ companies & individuals in more than 170 countries and territories

Founded in 1962 to represent the interests of military TSPs (Transportation Service Providers); scope broadened to include commercial business in 1970s

Annual Meeting and EXPO is world’s biggest & best networking opportunity for business development in moving industry

IAM and Its Affiliates

Is FLAT the New UP?

FLAT seems to be the “New Normal” USA Economy neither up or down – Since 2009 Recession - economy has struggled

to gain momentum Growth held back by higher Federal Taxes &

government spending cuts 2013 - USA Economy grew at lackluster 1.9 %

versus 2.8 % in 2012 2014 projected at 2.4% (recently revised to 3%)

United States - Economy

USA Housing Trends ? Unlimited number of opinions, but common

themes; and one thing is certain:

In the USA - Housing drives Moving 2013 – Prices increased by 10.9% - highest level

in four years (Median Price up $30,000)

Home sales expected to remain FLAT in 2014 Inventory UP, with less competition from

investment buyers: Is this what drove markets up? Record low interest rates going away &

affordability worsening

Curious Facts About Moving in the USA

Every year more than 45 million people relocate in the USA – (about 17% of population)

On average – 11 or 12 times in a lifetime About 6.7% move to another state 50% move due to job change, 33% due to

retirement & the rest for other issues Five years after graduating, 33% of young

people no longer live in same state

Source: Moving News

Local Move 41 %(Same City)

Long Distant 23 %(500+ Miles)

Moving to Another 19 %City (Less 100 miles)

Regional Move 17 %(Different Metro Area100-499 Miles)

GREEN = Nobody Lives Here

USA Census 2010 – Dark Green Represents Zero Population Blocks

Nobody Lives Here USA Census 2010 – Dark Green Represents

Zero Population Blocks

10 Least Affordable Housing Markets

1. Hong Kong

2. Vancouver

3. San Francisco*

4. Sydney

5. San Jose*

6. Melbourne

7. Auckland

8. San Diego*

9. Los Angeles*

10. London

Four USA cities – all in California

Source: 2014 Housing Affordability Survey

UK Housing Trends

UK Housing costs set to rise by up to 8% in 2014, with gains in all its countries

Average House price 247,000 Pounds Sterling

A growing imbalance between supply and demand

Estimated UK needs 100,000 new homes a year to keep up with demand

UK Economic & Trade Outlook

Bank of England forecasts UK Economy will grow 3.4% in 2014 (was 2.8% Nov. 2013)

On course to overtake Germany as Europe’s biggest economy within next two decades

Second most successful Western economy after USA; will slip down global rankings (6th) due to Emerging Markets – India, Brazil, Russia

Exports hit record levels – but so have Imports (UK can’t escape its trade deficit)

Source: Centre for Economic and Business Research (CEBR)

Trends in UK Talent Management

London is Top “HQ” Pick for world’s biggest companies

Two out of Five largest companies in the world with a Headquarters in Europe have it in London (60% of European Companies)

Nearly half of all highly-skilled workers in the top five European business cities are in London

Paris 19% - Berlin 13.7% - Milan 11% - Frankfurt 9.8%

What is an Expat?

Expat: an expatriate person transitive verb

1. to withdraw (oneself) from residence in or allegiance to one's native country

intransitive verb • 2. to leave one's native country to live

elsewhere; also to renounce allegiance to one's native country

Expats in the World: The Numbers

• There were 73 million expats worldwide in the year 1960; that figure now stands at a staggering 230 million

• Expats make up 3.1% of global population• Women make up 49% of expat population• There are 6.32 million American expats and

4.7 million British expats living abroad

Source: EasyExpat.com

Top Five Destinations for UK Expats

UK now Europe’s Biggest Exporter of PeopleOnly China and India have more citizens based abroad

UK Expats and numbers of British state pensions in brackets:

1. Australia 1,062,000 (251,000)

Held top spot for past two decades

Stricter Visa restrictions impacting that number

2. USA 829,000 (140,000)

3. Spain 808,000 (104,000)

4. Canada 608,000 (157,000)

5. Ireland 289,000 (126,000)

Source: inShare Expat Data Tracking

Global Economies Up, Down & All Around

BRIC Countries - Brazil, Russia, India & China Brazil – 4th year of disappointing growth

Big fall back to earth after last decade as one of the

leading Emerging Markets

Russia –Weaker domestic demand and delayed investment threatening growth

Annexation of Crimean peninsula –what’s next?

India – Asia’s third-largest, weighed down by high inflation, weak currency and drop in foreign investment

China - World’s second-largest economy, projected to grow at 7.5% in 2014 versus 7.7% in 2013

MINTS Next Economic Giants?

Mexico – Rapidly developing infrastructure (near-shoring of manufacturing), rising Middle Class, declining poverty rates

Indonesia – 4th most populous after China, India & USA

Mixed economy – Private and Public play role

Only G20 member to lower debt-to-GDP ratio Nigeria – GDP 3rd largest in Africa, behind South Africa and

Egypt (30th in the world; was 52nd in 2000) Turkey – 3rd largest growing economy in the world:

Construction related industries = 30% of economy

Very large consumption base and 3 Auto Manufacturing

companies

Why Focus on Trade and Global Economies?

Trade is to International movingas

Home sales are to Domestic moving

Why Companies Move People

Growth of Company Reorganization / Restructuring Promotions / Resignations Knowledge / Skills Transfer Expansion into New Territories Budget Constraints Tax Advantages or Disadvantages Acquisitions / Mergers

Source: Atlas Van Lines – 2013 Corporate Relocation Survey

M & A Generates Moves

Merger & Acquisition activity becoming major reason why companies relocate staff

63% of USA companies will initiate at least one acquisition or merger in 2014 – 36% as Divestiture

Industries expecting highest number of M&A activity:

Technology, Media, Telecommunications, Health Care, Life Sciences, Pharmaceuticals, Financial Services and Energy

Regions where M&A activity is likely:

USA 56%, Western Europe 29%, China 29%, N. America 27% and Asia (excluding China) 15%

Source: KPMG 2014 M&A Outlook Survey

WHERE will People be Moving to and from?

TOP TEN relocation destinations:

1.United States 6. India

2.United Kingdom 7. Germany

3.Singapore 8. Hong Kong

4.China 9. Japan

5.Switzerland 10. Canada

Source: UniGroup Worldwide UTS Migration Study

Changing Customer Demographics Younger employees willing to take on overseas postings, particularly

in emerging markets

More ‘split-family’ assignments

Many companies combining overseas jobs with charitable projects

IBM – 1,200 employees – 100 projects – 23 countries FedEx – Global Leadership Corp. works with Peace Corps

Relocation trends showing shorter time periods for international assignments and short-term projects

Probably smaller shipments – Average shipment size dropped from 7,500 lbs to 5,550 lbs.

Dawn of the “NANO-Shipper” (Customer) – Everything they own is smaller / digitized – they just don’t have as much stuff!

Length of International Assignments

12 Months or less 13%

More than 12 months,

less than 3 years 54%

3 Years or More 33%

Source: Atlas Van Lines -2013 Corporate Relocation Survey

In What will People Be Living?

With trends for postings to be shorter and for more assignments to emerging markets, what will we see?

Long Term or extended stay hotels/temporary housing

Serviced (semi or fully) furnished apartments Rotation in and out of corporate housing Pre-Packaged Home Furnishings

WHERE are People Moving …or not?

Five-Year Trend (Inter-Country Moves): USA and UK continue to hold onto first and

second place China is third, followed by Germany Both countries showing a slowing or flat trend in

relocations from USA Switzerland and Singapore – remain strong due

to financial firms rotating staff India, France and Hong Kong – Gone flat and

barely holding onto their previous slots

Source: CARTUS, Global Relocation Destination List

What Percent of USA Employees

Relocate to Each Country?

U.K24%

Germany16%

China12%

Australia 6%

France6%

Switzerland5%

Netherlands5%

Japan5%

India4%

Singapore4%

Malaysia3%

Brazil3%

Belgium3%

Italy2%

Israel2%

U.KGermanyChinaAustralia FranceSwitzerlandNetherlandsJapanIndiaSingaporeMalaysiaBrazilBelgiumItalyIsrael

The JOBS are Moving! Re-Shoring & Near Shoring Reversing 20-year trend of “Off-Shoring” Jobs

3 million Manufacturing Jobs will return to North America over the next 5 years

- Wages in China grow 15-20% a year, factor in lead times, shipping & inventory costs, currency fluctuations, etc.

- Cost differences will be only 10-15%

- Abundance of USA Fuel sources (Natural Gas) for factories

- Stable business environments - protect the Brand’s reputation

and less civil strife

WHERE is Corporate America Moving IN From?

TOP TEN Origin Countries – Inbound USA:

1. Germany 6. Australia

2. United Kingdom 7. The Netherlands

3. Switzerland 8. Japan

4. France 9. Belgium

5. China 10. Singapore

Source: UniGroup Worldwide UTS Migration Study

Trends in Airfreight

Technology shipments account for 50% of Airfreight Revenue in last 20 years

Volume of (high-tech) cargo down due to reduced size of product and products with more functions in single device creating less freight to ship

Airfreight Market will see slow, sporadic growth over next several years due to “modal shift”

Smaller HHG shipments may increase use of Airfreight or Unaccompanied Baggage

Trends in Ocean Shipping

Since 2011 ocean rates have seen unprecedented gyrations and remain under pressure

Supply/Demand Ratios should/will favor shippers Challenge = maintain rate levels and market share Carriers may try to manage capacity

• Skipping Sailings• Anchoring Vessels (Mothballing as in 2010)• Returning ‘Chartered’ Vessels

Consolidations, Mergers and Vessel-Sharing Increased Risk of Financial Distress (Bankruptcy)

Future Impacts on Ocean Shipping

Panama Canal Expansion in 2015 Larger TEU Vessels begin transiting Canal USA West Coast Ports will lose volume to Gulf

and East Coast Ports Bigger Ships = Bigger Mishaps/Cargo Loses =

Bigger Insurance Premiums

More Mis-declared Container weights

Impact on “General Average” ? Increase in “Round-the-World” sailings

Moving Over the North Pole

North Sea Routea.k.a “Northeast Passage”

New Shipping Lane from Europe to Asia North of Russia – Cuts off thousands of miles

and avoids transiting Suez Canal In 2010 just four (4) ships made the trip Since April 2014, 266 voyages have received

permission from Russia’s North Sea Route Administration

Similar increased shipping activity in the Canadian Northwest Passage

What is UP in Moving Government Regulations

Ports and Border SecurityFocusing on Personally Identifiable Information (PII)

CARB - California Air Resource Board

Tighter vehicle emissions restrictions

USDOT/ FMCSA - Increased Bonding Limits, Hours of Service(HOS), CSA, Medical Registrations, EOBR

Federal Maritime Commission (FMC)Increasing Bonds, OTI Vetting & Licensing Enforcement – particularly with “Middlemen” and Overseas NVOs

FMC/FMCSA – Cooperative Focus on Rogues

Combating Rogues

Use to be only a local or domestic issue – now impacting International Moving

The Internet is their hook to draw in uneducated consumers of moving services

Public – Private Cooperation is Key

FMCSA / FMC and a variety of industry entities

working hand-in-hand

Starting to turn the tide in North America

USA Government – Rogues Federal Motor Carrier Safety Administration – Protect Your Move

Federal Maritime Commission - I-27 investigation – “Barrel Trade”

– MOU – FMCSA and Federal Maritime Commission

– Enhanced – licensing process and bonding

– MAP-21 Highway Bill – increased bonding for forwarders and brokers – raised from $10,000 to $75,000

– Increased focus on international rogue movers

Coordinated effort – Consumer Protections and Education

– Trade associations, Federal, State and local (regulatory) agencies conducting “sting” operations to nab the scam operators – we refuse to call them rogue movers.

Industry Action - Rogues

American Moving & Storage AssociationAMSA administers professional certifications for specialists:

Certified Moving Consultant (CMC) & Certified Packer/Loader

(CPL); and Registered International Mover (RIM)     PRO-Mover Program – Enhanced vetting of Members

Industry Action - Rogues Canadian Association of Movers (CAM) –

“Year of the Reputable Mover” Working through Provincial Ministries of

Transport – Federal Ministry of Justice and in cooperation with Canada’s Office of Consumer Affairs and the Canadian Competition Bureau

www.mover.net/trust

Is Space the Next Market? • Russia to begin Moon Colonization in 2030

• Which mover will handle first shipment of HHG?• Who will be first mover to have branch on the

moon? Will they be a member of BAR / IAM?

Will Rogues still be a problem?

THANK YOU!

www.IAMovers.org

@IAMOVERS SOCIALCAFE.IAMOVERS.ORG/home www.facebook.com/iamovers

WHERE People Will Be Moving –

North America Outbound

Fifth straight year United Kingdom was the Number 1 Destination

UK relocation traffic up 7.8% The Netherlands moved no. 10 to no. 7 Switzerland from number no.14 to no. 6 Germany down 14.6% in shipment numbers France down 21.7%

Source: UniGroup Worldwide UTS Migration Study

What is Down / Flat in Moving

• Drivers – Retention and Recruitment • Hauling Capacity – remains tight, get tighter• Pricing – Unhealthy emphasis on dollars and

cents...at the cost of Service• Profit Margins – Revenue Distribution • Agent Confidence – Forced to work with

‘Unknown’ bookers, haulers and TSPs• Ability to Forecast and Invest –