Date: November, 1998
From: A Thread
Subject: AMS-Forum Fast Train Coming
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>Bob @ Laine Grant Consulting wrote:

I think that the moving industry, while not unique to this, is certainly a leader in the field of giving birth to new moving companies via it's own employees. I track the local movers market in my area, and there are more moving companies today than there were 5 years ago - all types combined. There is also more competition than ever from movers not located here. What would probably be very interesting is to compare the matrix of the moving industry today to that of even 5 years ago. All the spinoffs, all the various types of services movers provide, all the strategic alliances, all the support vendors, etc.. This explosion in information (especially with the Web) has to certainly mean that the most vital asset any mover has is the collective knowledge of his people and the application of that knowledge. I just conducted a survey (phantom calling) of many moving companies that have 800#s but no local presence of their own here. The results were very interesting. The level of professionalism overall was far below that of most local movers I work with, but only when you press for details on what it is they actually do. Insurance, personnel, details on the move - subjects many of them just couldn't or wouldn't answer clearly. That's what always scares me a bit about many moving companies - they like to hire each others people constantly - rather than train someone from the ground up, or bring someone in with good work habits and non-industry experience. I think some of the image problems movers have with consumers come from the fact that unmotivated, untrained, unprofessional people who are allowed to stay employed for far too long in the industry simply because they'll work for less (you get what you pay for if pay well and demand performance) seem to just move around inside the industry.

Bob @ LGC

>Archie White wrote:

I too see an over capacity of movers in Atlanta. Each new phone books brings 12-15 "new" movers. They are mostly local movers, and we don't want the work they want. It constantly amazes me that they can pay the highly inflated prices for 1/3 or 1/2 page yellow page ad's, and only have 1 or 2 trucks. Quite a few in the book, I have never seen a single truck of theirs nor have our salespeople ever run into them. Another trend I have noticed, when the public service commission sends out the list of people applying for authority, it is loaded with several "movers" every month. Where do they all come from? No longer are we protected by the term " public convenience and necessity" that adorns our hard earned intra authority, now all you need is a lawyer and $250, and Georgia is a regulated state!

UVL's statistics show that National Account traffic is stale, or even declining slightly. Cod traffic is up, but it's hard to book in large areas unless you are the low bidder out of 6-7 estimates. and soon the Military will re-engineer, God help us.

We like to gripe about how rough this business is, then we go get in our Lexus and go to a $40 lunch.

Archie White

>Bernie Kirbach @ Relogistics Worldwide wrote:

Re; Bob's second post (copy under my signature) I am amazed that the movers on the forum did not jump on your post, the implications are very important. Many of the posts to this forum lament the lack of gross profit margin (deep discount wows) and most will attribute this (correctly so) to the state of this industry's overcapacity. If what you are suggesting is true, the more I read of your second post, the more I'm inclined to agree) then capacity is actually expanding, which will have a further negative impact on rates in the coming years. Combine this with the general downturn in Corp relos experienced in 1999 (my opinion, based on working with over 120 agents of all colors) and you have an industry wide time bomb that just stopped ticking!

Am I the only one who sees this? If so, somebody straighten me out please!

PS Bob can you give us numbers i.e.; your local market increase in movers?

Best regards,

Bernie Kirbach

>John Leistritz wrote:

The time bomb that Bernie refers to began ticking when the industry was deregulated 20 years ago and movers discovered how easy it was to make sales projections by simply selling their services for less than the competition. As a result, the industry has trained the public to believe that there's no significant difference between movers, at least not enough to warrant paying a higher price. So, there's no wonder that people of questionable qualifications--and often questionable ethics as well---with enough money for a truck and a Yellow Pages ad are entering what most would agree is an over saturated market to begin with.

What's the answer? Consumer education is one, of course, but that has to come from the top. No one van line, let alone a single M&S company, can do it effectively and objectively. Building a reputation for quality and dependability is another. It's slow, and some cynics out there may feel that the public doesn't care. But I personally know of movers who get 25-30% of their business from repeats or referrals. Obviously, it worked for them.

Basic marketing theory holds that when the market isn't growing and the number of competitors for that market is, a company that wants to stay in business must do one of two things: figure out a way to take someone else's share, or occupy a market position that provides a unique, or at least distinctive, profile.

Taking someone else's share can be achieved by price-cutting (which got the industry into the position it's in now), or by spending enough money on salespeople and advertising to become a "top of mind" brand. The latter is harder for the moving industry than it is for most products and services, because it's impossible to create a demand for moving services, therefore rendering movers essentially invisible to those who don't need them.

So, occupying a distinctive market position, what marketers call a "unique selling proposition" is probably the most long-term effective strategy.

John Leistritz

>Bob @ Laine Grant Consulting wrote:

Over the last five years, the database of movers I maintain for my clients across 6 counties has hovered between 280 to 300. There has been an average of 6 to 8% addition/attrition almost every year. For every mover that closes (an office or closes all together, or mergers into another), a new ones sprout up (in the form of a new branch, new company). When you look at just the number of 800# movers in the yellow pages, the ones without a local presence, those numbers have increased steadily every year in every book in every county (some counties have more than one yellow page from the main service provider). Attrition is higher, around 10- 12%, but the average number keeps climbing. Then, you have to throw in 3rd party logistics groups, web influence, freight lines with their pup moves, and more. You can see that the number of options a person moving today has is increasing just in terms of the sheer number of people they can talk to. That's why it's so key to have top notch people on the phones, on the web. Speaking of the fringes of moving, look at what the USPS is into - promoting the sales of moving boxes. Why some large van line didn't think of sewing up a deal with the USPS I don't know, but check out and the group behind it. Look how the express companies and truck rental agencies are tapping into that. Hey- want a really scary thought? How about a giant like Fedex or UPS entering the fray. Where one goes, many will follow, if allowed. If you think that will never happen, just remember that's what the air freight companies thought before they moved into that. It's what UPS worried about before Fedex bought Viking & RPS and moved into ground service. My sermon, if you will, is you'd better pay top attention to your human resources if you want to be anything more than a one man or woman show. They need to be educated about what your industry is facing and how to counter/cope with it. Don't get me wrong, there's a viable need for top notch movers in the business with a presence in the marketplace - somebody still has to do the work. I believe what will continue to make them successful is a never ending push for quality improvement, if you will, in terms of the knowledge and skill they have on their staff, or that their contractors have.

Bob @ LGC

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