Is this the tail wagging the dog? by Mike McMarthy

Date: Sat, 01 Jan 2000
To: moving@avatar-moving.com
From: "Mike McCarthy" <mtm02@sprynet.com>
Subject: Re: AMS-Forum What's going on?
X-Hosted-By: http://www.avatar-moving.com
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Randy wrote:
>I applaud any van line who flags out of the 400 tariff. Atlas tried to deny
> taking the increases a few years ago only to be pressured back in line and
> trying to play catch up. A common tariff is too measurable and is not the
> simple pricing that our customers are looking for. Graebel has also filed a
> corporate pricing structure which is a simplified 400 for its customers,
> corporate only of course, and is on CD rom. Why do we need a common tariff
> again?

Mike McCarthy replied:
Great question Randy! (Randy of All Points right?) I've been asking the same one for years and Atlas continues to put their head in the sand. I guess the logic is we need our tariff (much like a pacifier) so we can think we are still regulated. It makes us comfortable and cozy. It gives us a "benchmark" at what the "list" price is for the others. The last thing you want to do to a bunch of movers is do something different. We've been using a tariff since 1935 and its working! (isn't it?)

Beginning tomorrow (1/1/00) in Denver, one dishpack (which is designed for breakable items only and not rollerbades, basketballs, and Big Wheel toys) will be listing at nearly $69.00 in Tariff 400 M. One dishpack, $69.00. Not to confuse anybody with that price, as this does include the container, paper, tape, and packing labor (let's not forget about the warehousing and packing crew driving to the residence). At a 60% discount (which is seen regularly buy each of you reading this), the net for that dishpack is $27.60. At the rate we are going, we will be able to have in the very near future the first $300.00 dishpack with a discount of 90% for a net charge of $27.00. Do you feel the professionalism slipping away in our industry? We have a choice ladies and gentlemen. We can either get a grip and stop the insanity, or we can go out and buy some new garters cause we are just whoring up our profession.

We continue as an industry to operate with the mentality associated with the days of regulation. We have yet to figure out how to apply the basic tools of Marketing 101. We think raising the discount, then adjusting the max share levels (that is for the big bookers like Alan), and then giving a discount is what will bring us new business. Somehow, we have the impression we are selling and marketing our services.

Owners want new business, but not at high discounts. Drivers want to do more jobs, but not at the big discounted rates. Bigger discounts mean nothing more than eroded margins, poor performance, and nothing saved for a rainy day. Our pricing mechanism has become disgraceful. Our sales professionalism is at an all time low as we have lost what dignity we once had. Customers and corporations are telling us what we will charge. Is that the tail wagging the dog or what? However, everything is okay because we as an industry, go to beautiful locations for our van line yearly convention. While there, we each pat each other on the back, lounge by the pool, tell the newest jokes, knock down the cold beers, and advise business is great. Business is so great we play on golf courses designed not for movers, but for people with money. Maybe I'm to close to the van to read the writing on the trailer.

Now that I got that off my chest, I'm ready for the new millennium. I have this vision that sometime during the first quarter of 2000, that the alarm clock will go off and our industry wakes up (kinda like Rip Van Winkle). We have a tremendous service that is essential for the continued growth of America. There is no need for us to gauge the public with high prices and on the other hand, there is no need to do what we have been doing for the last 15 years. We can't reinvest in our businesses without adequate profit.

It is a new year, and a new beginning. I encourage each of you to refocus, understand what it costs to do business, and realize payroll and profit are two different words. Teach your sales staff how to sell and not how to price. It is a whole lot tougher to be a leader than a follower. I would like to think we all can improve and have a hand in making 2000 a much better year for both the shipper and your van line / agency.

Mike McCarthy
Golden Van Lines, Inc.
Longmont, CO

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