MARKETPLACE HOUSEHOLD GOODS INDUSTRY TRENDS & UPDATE By Elaine C. Smythe, CRP, GMS-T, and Lauren Falls TO THE CHALLENGE Rising of Change ISO 14001 & 9001 Certified Global logistics, local experts. Email us today: [email protected]For tips on moving to Mexico, visit the featured destination profile section of this month’s Mobility Magazine. Moving to Mexico, New Mexico, or any spot on the globe, let Paxton help get you there. The Paxton Companies have been a trusted partner to corporations, the US Government, and US Military- moving talent to where it is needed most. We can customize a moving solution to fit any budget and meet the needs of any project. Let Paxton support your global mobility program and the needs of your transferees with domestic and international transportation solutions ranging from executive white glove service to lump sum small shipment solutions. Whether a logistics challenge, unique location or a simple family request, trust the Paxton team to set the standard on a QUALITY RELOCATION EXPERIENCE, one move at a time. PAXTON COMPANIES: WASHINGTON, DC www.paxton.com Call Us Today: 1800.336.4536 Monumento a la Independencia Mexico City
Transcript
MARKETPLACE
HOUSEHOLD GOODS INDUSTRY TRENDS & UPDATE By Elaine C. Smythe, CRP, GMS-T, and Lauren Falls
TO THE CHALLENGERising of Change
ISO 14001 & 9001 Certifi edGlobal logistics, local experts.Email us today: [email protected]
For tips on moving to Mexico, visit the featured destination profi le section of this month’s Mobility Magazine.
Moving to Mexico, New Mexico, or any spot on the globe, let Paxton help get you there. The Paxton Companies have been a trusted partner to corporations, the US Government, and US Military- moving talent to where it is needed most. We can customize a moving solution to fi t any budget and meet the needs of any project.
Let Paxton support your global mobility program and the needs of your transferees with domestic and international transportation solutions ranging from executive white glove service to lump sum small shipment solutions. Whether a logistics challenge, unique location or a simple family request, trust the Paxton team to set the standard on a QUALITY RELOCATION EXPERIENCE, one move at a time.
PAXTON COMPANIES: WASHINGTON, DCwww.paxton.comCall Us Today: 1800.336.4536
Monumento a la IndependenciaMexico City
134 Mobility | May 2016
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It’s no secret that the household goods industry is quite complex, with a diverse range of busi-nesses, from van line carriers and international forwarders to independent businesspeople and service firms that are customer-facing and on the front line. Like any industry, we face economic,
regulatory reform, and compliance challenges, changing demographics, rising costs, and pricing demands that impact profitability. Interestingly enough, given our highly competitive environment, what those in our industry have in common is that we continually embrace change, address the issues head-on together, contribute to our economy, and serve nearly 3 million customers who want or need to move every year. Our common goal is to make the customer experience the best it can be.
In this Marketplace, we’re going to hit on the trends, data, and compliance issues impacting our industry and what this means to our clients and cus-tomers in 2016 and beyond.
CORPORATE RELOCATION DATA AND TRENDS Atlas Van Lines recently released the results of its 49th Annual Corporate Relocation Survey of 445 human resource and relocation professionals. The
results indicated increased corporate relocations in 2015, with 50 percent of firms seeing relocation volumes increase overall and internation-ally. While volume increased, bud-gets that had been previously reduced in the recovering economy were slow to bounce back or keep pace. However, in both 2014 and 2015, nearly half of all companies
indicated an increase in relocation budgets, with 41 percent expecting to see relocation budgets increase yet again in 2016.
So what continues to drive employee relocation today? Company growth is the internal factor cited most often (39 percent), with combined company expansion efforts coming in a close second (37 per-cent). Mobility professionals cited the lack of qualified local talent once again as the top external issue (42 percent) that is driving the need for relocation.
When it comes to young professionals and mobil-ity, 43 percent of firms indicated that the average age of employees relocating most frequently is under 36 years. On average, companies stated that 22 percent of their relocations in 2015 were for entry-level posi-tions, while around half were for midlevel positions.
“When moving a young professional, one must consider the lifestyle they are used to, given the surge of services like Uber and Airbnb,” says Jack Griffin, president and COO of Atlas World Group. “Operating with these trends in mind, we are investing heavily in sophisticated, digital tools that go beyond the move to eliminate the common stressors associated with relocating one’s life and belongings and help make their new residence feel like home faster.”
While budget increases continue, the impact of fundamentally changing the “way” relocation dollars are allocated remains. For the second year, full reim-bursement of expenses for new hires (36 percent) is out of favor in comparison to lump-sum payments (45 percent) and partial reimbursement (38 percent). Historically, this is the lowest level of full reimburse-ment for new hires as measured by the survey. “Prior to the new millennium, full reimbursement was by far the most frequently utilized method of cost coverage for relocations for both transferees and new hires,” says Griffin. “We’ve found that firms utilizing lump sums for either type of employee are offering them for travel expenses, temporary hous-ing, miscellaneous allowances, entire relocation cost, or household goods shipping and storage.”
THE IMPACT OF GOVERNMENT REGULATIONS From the compliance view, we’ve all heard of the many regulatory constraints that our industry and specifically our drivers are facing. Federal motor carrier rulings mandating the use of electronic logging devices (ELDs) to record hours of service (HOS) signify an evolving industry weaving compli-ance with impactful technology and real-time data.
The van line industry
will continue to invest
in education, with a
focus on compliance,
business excellence, and
uninterrupted service.
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This industrywide change will impact all entities involved in a household move, from the professional van operator and van line agents to our customers being served. Driver operational time and annual shipment capacity will be reduced; loading house-hold goods shipments and transporting them to the final destination will require additional time.
It is important that those preparing for a move take this into consideration and set realistic, flexible expec-tations. Moving companies will also have to adapt to better support and educate their customer base. Long gone are the days of dispatch pushing their top-per-forming drivers and crews to “just get it done for this special client,” with the January 2016 ruling imposing major fines of $17,000 per occurrence if reported. Ultimately, more drivers and trucks may be required to make up for the decrease in available hours, which will drive costs and impact revenue. “The van line industry will continue to invest in education, with a focus on compliance, business excellence, and
uninterrupted service,” says Glen Dunkerson, chair-man and CEO of Atlas World Group.
DRIVER RECRUITMENTSpeaking of investment, driver recruitment is a top industry challenge and a focus for a long-term solu-tion. It’s no surprise that according to the American Trucking Associations, the U.S. trucking industry faces an immediate shortage of 48,000 drivers. Companies like Atlas and other professional van lines are responding to this issue by focusing heavily on recruitment and retention.
Combatting the driver shortage lends itself to a new and welcomed industry trend: women in trucking. American Trucking Associations has also reported that women accounted for 5.8 percent of the 3.4 million U.S. truck drivers in 2014, compared with 4.6 percent in 2010. Today, companies that employ truck drivers are attempting to shed their male-dom-inated images and historical stereotypes to appeal
to and benefit women, who might be the solution to an industrywide dilemma. Another recruiting area continues to be our former military members. Major van lines and their agencies are growing capacity by broadening the target audience and contracting more exclusive owner-operators than in years past. This growth is a testament to the ongoing success as an industry in meeting customers’ relocation challenges.
CELEBRATING PROGRESS AND POSITIVE CHANGEWith challenges come victories in the legislative milestones, and thanks to the American Moving & Storage Association (AMSA) we can celebrate some successes that come only from working collectively as a group. One victory for moving companies and consumers is Congress passing the FAST Act (Fixing America’s Surface Transportation), a long-term funding bill for investments in our nation’s roads. With unprecedented support from the AMSA
membership, they were able to add many provisions that will benefit our industry.
“The American Moving & Storage Association appreciates that Congress heard our calls for regu-latory reform that will better protect consumers and improve safety on our nation’s highways,” says Dan Veoni, AMSA vice president of government affairs. “The bill removes the flawed Compliance, Safety, Accountability scores from public view while the agency improves the program’s methodology. It also establishes a household goods working group to reduce the paperwork burden on consumers, and cre-ates a pilot program for young veterans to drive com-mercial vehicles across state lines, although we believe this should be expanded to all qualified commercial driver’s license holders under the age of 21. Finally, we are glad to see that Congress will not increase the num-ber of states allowed to impose new tolls on interstate highways, which would have added burdensome new costs on both movers and consumers.”
Company growth is the internal factor cited most
often 39% with combined company expansion
efforts coming in a close second. 37%Mobility professionals cited the lack of qualified
local talent once again as the top external issue
42% that is driving the need for relocation.
Industry Stats According to AMSA
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138 Mobility | May 2016
Scott Michael, AMSA president and CEO, adds, “Even with the passage of this bill, our work is not complete. We will continue to fight for strong consumer protections and federal policies that ensure a safe, successful moving experience for millions of people each year.”
AMSA has been working to resolve the “34-hour restart” error that impacted drivers and van oper-ators, which according to the U.S. Department of Transportation (DoT) will remove the restart rules from the federal code entirely. The Safety Fitness Determination ruling requires a study on the effects of the current, less restrictive start and the more restrictive start. Depending on the outcome, this could negatively impact household goods movers if they can no longer reset their weekly on-duty clock,
binding them to the limitation of driving 70 on-duty hours in eight consecutive days. Other initiatives spearheaded by AMSA’s government affairs division include keeping a watchful eye on any proposed corporate tax reform that could impact relocation program budgets for corporations and for consum-ers. More details can be found on AMSA’s website at www.promover.org.
The good news is that AMSA and its members are working hard on your behalf, along with other indus-try coalition partners, to negotiate with policymakers in the House, Senate, and DoT to find effective imme-diate and long-term solutions, and they will continue to keep the industry informed.
With corporate relocation volume and budgets on the rise, the current mobility landscape is presenting
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household movers with significant opportunities. “We have no doubt our collective organizations and industry leaders will set an example by evolving effectively alongside the present challenges,” says Bill Paxton, COO, Paxton Van Lines and AMSA Executive Committee member. “Keeping every-one informed and aligned with today’s customer is critical for our industry’s success to survive and thrive,” adds Paxton. By properly educating everyone involved in a move, from the professional van operator and van line agent personnel to our relocating customers, we will rise to the challenge of change and continue to provide premier services to the millions of individuals moving each year. M
Elaine C. Smythe, CRP, GMS-T, is vice president, corporate sales and marketing, for the Paxton Companies. Lauren Falls is manager, marketing communications, for Atlas World Group.
Industry Stats According to AMSA • Our industry consists of 7,000 companies
operating at 13,900 locations, primarily providing moving and storage services for household and office goods.
• It employs 122,600 people with an annual payroll of $3.6 billion—not including independent drivers and contractors.
• AMSA’s 4,000 members report operating a fleet of 50,000 trucks and 32,000 tractor units for pulling semi-trailers, and 18,000 straight trucks regulated by the U.S. Department of Transportation. Industry revenue of services totals more than $12.6 billion annually.
• 73% of revenue consists of household goods.
• Corporate relocation represents about one-third or 36% of revenue, while the remaining 64% are individuals, military, and government.
What is the age range of your most frequently relocated employee?
