“I foresee (between 1995 and 2020) a computerized tube-type transport system. These tubes will be connected between all large cities, with connecting branches to outlying areas. The goods will be placed in these tubes and push button computerized controls will dispatch goods to the final destination without delay.”
This was one industry professional’s fanciful prediction 40 years ago on the future of the moving and storage industry.
Some of the predictions were pretty wild, while others amazingly accurate. These predictions appeared in the last chapter of Stanley “G” Alexander’s 1970 book, “History of the Moving & Storage Industry in the United States.” Even then, Alexander prefaced the chapter by writing, “only time will tell which individual is a prophet and which individual is a miscalculator.”
The “individuals” he was referring to included leaders of van lines that no longer exist, military traffic managers of military bases long since closed, and corporate transportation managers employed by companies who have either been acquired or simply disappeared over time. Other individuals interviewed represented companies and organizations that are still thriving today. Each industry professional provided their personal opinion on how the future would look. Of course, their future would eventually become our past and our present.
Knowing how things eventually turned out not only allows us to evaluate past predictions, but also enables us to see how much has changed during the past 40 years.
One indisputable truth in business (as in life) is that nothing ever stays the same. One of my early mentors once told me that “the only thing consistent about this business is its inconsistency.” While he was referring to the many variables involved in the moving process, his statement also holds true when applied to the many changes that have taken place in the industry as a whole.
Consider the industry changes in pricing, governmental regulations, service providers, consumer expectations, and even the relationship between moving companies and their corporate clients (from a direct to an indirect relationship).
It often is said that “past is prologue.” Our past serves as the introduction to our future. So with that in mind, let us begin the risky business of predicting the future of the moving and storage industry.
Technology
There is no question that technology will play an important role in the future of the moving and storage industry. We have seen and will continue to witness many technological advancements in the areas of surveying, invoicing, move management, and communication. This article will focus on future technological advancements in trucking, inventory control, and warehousing.
Admittedly, technology is one area where many futurists of the past have let their imaginations overcome practicality. However, one such forecaster, Lance Winslow, has conducted extensive research on the topic resulting in some interesting and practical predictions.
Winslow is part of “The Online Think Tank.” He credits the T5 Group (The Think Tank Trucking Team), The American Trucking Association, The Department of Homeland Security, and transportation research divisions of the government for assisting him with his research and predictions.
In his 2007 book, “Truck Technologies of the Future,” Winslow writes that trucking communication of the future will improve transportation efficiencies and reduce transportation costs with truck transponders, GPS-3G technology, and real-time virtual dashboards. Drivers with truck transponders will pass through roadside truck scale inspections more quickly with pre-loaded, transmitted data to assist governmental inspectors.
GPS-3G technology not only provides the most efficient routes, it also prevents accidents by audibly warning drivers of sharp turns and hazardous road conditions ahead. Real-time virtual dashboards would allow a driver’s dispatcher sitting hundreds or even thousands of miles away to see what the driver sees on his dashboard instrumentation panel. Winslow writes, “The driver does not need to alert his dispatcher that he needs a fuel stop or that he has a flat tire or is stuck on the side of the road or even that he is going 10 mph in traffic. The dispatcher already knows all that and has re-adjusted the route accordingly and estimated the time of arrival.”
What about the future of inventory control? Many other industries have adopted the technology of radiofrequency identification (RFID). The technology stores information about a product or item in a special tag affixed to the item. The tag contains both an integrated circuit board with data describing the item and an antenna that sends and receives a signal. This allows a driver, warehouseman, or even a customer to quickly identify and confirm all the items contained in a shipment by using a special hand-held device. This technology has revolutionized inventory tracking and asset management for several different industries. The technology needs further development prior to widespread use in the moving and storage industry. Manufacturers easily can affix pre-made/pre-programmed RFID tags to thousands of identical products (like boxed flat-screen televisions); however, household goods shipments have hundreds of unique items for each shipment. RFID tags for each item would have to be programmed by the driver at origin.
Currently, this process is not technologically feasible and in-home programming by the driver is not practical. In the future, new ideas and technology may overcome these challenges and revolutionize the industry’s inventory control with some form of RFID tag system.
Addressing the future of warehousing, Winslow writes, “not long in the future a truck driver will be instructed as to what loading bay to back up to at a robotic warehouse. Once he is docked the door will automatically open and robotic forklifts will open the truck trailer door and load the truck.
Each piece of cargo or palette will be weighed and added to the total. Each piece of cargo will be recorded having left the warehouse by reading the RFID tags on the containers. All this information will be uploaded in real-time during the process in case it is interrupted.”
Winslow states that in the event of a power outage these robotic forklifts could have back-up power systems and continue to work uninterrupted. These unmanned forklifts also could operate in complete darkness, on rails, and with sensors, thus eliminating the expense of warehouse lighting. In the words of Winslow, a fully automated warehouse would result in, “no people, no employee pilferage, no workmen’s compensation costs, and as the evolution process continued, no mistakes causing loss of goods.”
Green Initiatives
As the world continues to embrace the “green revolution,” the moving and storage industry continues looking for ways of reducing carbon emissions and unnecessary packing waste. As a result, one green initiative that is growing in popularity (and might even become commonplace in the future) is plastic reusable crates. Today, most moving companies use only new cardboard packing materials when packing for a corporate move. Once the move is completed and the items unpacked, these cartons are either thrown away, recycled as cardboard, or in some cases re-used by customers who are packing themselves. Most environmentalists will say it is far better to reuse a product than manufacture a new one.
With that thought in mind, and based on growing consumer demand, reusable plastic crate companies are growing in popularity. While renting reusable plastic crates is a common practice in the commercial office moving business, it rarely has been used for residential moves. For residential moves, the reusable crate company delivers the cartons to the customer’s home prior to packing and then picks them up at destination after the items have been unpacked.
Unfortunately, this process currently appears to be practical only with local moves because there still is the issue of returning the reusable crates back to the crate company. Perhaps in the future there will be a nationwide company who can make this process feasible for interstate moving. Alternatively, moving companies could issue reusable plastic crates as standard equipment on each moving van just like wooden dish barrels and wooden wardrobe crates were standard equipment on moving vans of the past. Not only are environmentally conscious consumers contributing to the growing popularity of reusable plastic crates, but so is the rising cost of cardboard—which actually makes it cheaper to rent a crate then to buy a cardboard carton.
How will the industry reduce carbon emissions created by moving vans in the future? Winslow notes that many trucks are currently running on “diesel and biodiesel blends, but in the future we might see the propulsion system where the motor is electric and running off a fuel cell. This would solve all the issues and concerns about pollution, which appears to be a pre-occupation of our national direction and goal to eliminate it.”
Biodegradable products also are being developed as an alternative to foam packing materials and plastic bubble wrap. In the future, many of these environmentally focused initiatives may have an impact on how the industry conducts its day-to-day business.
Predictions from Industry Leaders
What are current industry leaders saying about the future of the industry? While there are no wild predictions of “computerized tube-type transport systems,” there are some very reasoned and insightful prognostications. The following excerpts are taken from a series of interviews conducted this year with selected industry leaders.
Donald Hill is president and COO of Alexander’s Mobility Services based in Tustin, California. Alexander’s is a multi-location agent with Atlas Van Lines. Hill sees the industry’s workforce of the future changing in two important areas: first, in the quality of the labor sent into customers’ homes; and, second, in the reduction of qualified drivers in the industry’s labor pool. He predicts there will be stricter industry-wide background checks and drug screening requirements for packers, drivers, and movers, noting that “if someone did something when they were younger they can never get over that in our business anymore. This (initiative) is being driven by corporations and I think that is a good thing,” said Hill.
He also sees the shrinking driver pool as one of the “biggest challenges” facing the industry. Hill states that there are “not many kids who are coming out of school who want to be over the road, household goods truck drivers. We’ll all have to develop some type of sophisticated recruiting system working with colleges and other institutions so we can get people who want to be in this business.”
In the future, Hill anticipates that “the traditional model of a driver and crew traveling the country and providing moving services is much less viable than ever before. Especially when you consider the changes in the cost of doing business, our customer expectations, and the way we price our services.”
He sees greater diversification in the industry’s delivery model with tiered-service programs including options for intermodal transportation, small container moving, and expedited executive-level service. “Overall, our clients are demanding that we do things differently and we need to address those needs.”
Mike Wolfe is president of Allied Van Lines based in Westmont, Illinois, and North American Van Lines based in Ft. Wayne, Indiana. Like Hill, Wolfe believes that the industry needs to adapt to the customer’s changing buying habits. He states that, “corporate customers are making significant changes as they understand that the cost of employee relocation is more then just the service fees on top of a series of pass-through costs. They are requiring a greater degree of transparency illustrating that the vendor has more control over the entire chain of services.”
When asked about other future trends affecting the industry, Wolfe says that “the industry data continues to indicate that our society is becoming less mobile, thus shrinking the overall market. Time will tell if this trend will continue, but I hope that the stabilization of home prices will stem the decline.”
Glen E. Dunkerson is chairman and CEO of Atlas Worldwide and Atlas Van Lines based in Evansville, Indiana. In considering future challenges of the industry, Dunkerson is concerned about the potential of expanded government taxation. He states that “most of our industry is made up of small, individually-owned companies. If tax laws change dramatically, how will that impact them? As government gets more involved in taking more revenue to run the ‘machine,’ I think that drains all businesses.”
Dunkerson went on to say, “…everyone is concerned about the industry’s reduced (profit) margins. Margins are needed to reinvest in capital purchases. When your margins are what they are in this day-and-age, a lot of business people can’t re-invest in tractors, trailers, buildings, and equipment. These are all things that are needed to keep up with the needs of our customers.”
Regarding the future growth of the industry, Dunkerson says that, “in the next five years we will likely see another recession, but hopefully that will be short-lived. In 10 years, as generation ‘Y,’ which is a large portion of the population, starts to have more buying power, and as the older generation retires, the industry has a good prognosis with improved capabilities and increased opportunities. One more point on that; I believe that as the older generation retires they will be searching for reputable movers they can trust. I think one of the best things that AMSA [American Moving & Storage Association] had done is develop the ProMover designation to help identify professional movers. This will help consumers easily identify the professionals from the disreputable companies.”
Linda Bauer Darr is president and CEO of the American Moving & Storage Association (AMSA), based in Alexandria, Virginia. AMSA is the national trade association for the professional moving industry. When asked her opinion about future challenges in the industry, Bauer Darr listed “simplification” and “more choice.” By “simplification,” she means simplifying the current price structure. “Consumers just don’t have the time, patience, or desire to read 75 pages of rates and charges. They really just want to ‘bottom-line’ it. So we as an industry need to figure out how to ‘bottom-line’ it and still remain competitive.”
By “more choice,” she means providing more service options to future consumers. “The challenge for movers of the future will be to remain nimble, stay on top of their game, simplify, and offer more choices. You never know which one of these choices is going to be the solution moving forward. We need to be prepared to shift in the ‘dance’ that we will be doing over the next few years.”
When asked about future AMSA initiatives, Bauer Darr states that “advocacy” is a strong suit for AMSA. “We are able to get out there and press the message about the good work that we do, the essentiality and the economic impact of our industry, and how significant it is. We are out their ‘pounding the pavement’ and telling members of Congress and individual State Houses the things that we can do to make our industry more successful, more productive, and find solutions for their constituency. So we are going to be doing a lot more on the advocacy side.”
Another major initiative is further expansion of the AMSA “ProMover” certification program. Bauer Darr states that, “the ProMover program is not just about giving a mover the logo and the brand and telling them to put it on their letterhead. It’s continuing to evolve that program. We’re developing a lot of education and certification programs. We’re also looking at how we can apply the program not only to interstate movers but to international, intrastate, office, and containerized movers as well as for individuals like industry surveyors, salespeople, packers, movers, and drivers. This won’t happen over night, but it is already in process. It is important to communicate what the ProMover designation means to industry professionals, the media, corporations, REALTORS®, and anyone else involved with or utilizing moving services.”
William (Bill) Graebel, SGMS, is president and CEO of The Graebel Companies based in Aurora, Colorado. When asked his opinion about industry challenges of the future, he believes there will be a “prolonged period of suppressed demand in [this] very commoditized industry with a regulatory environment and consumer base that is expecting significant performance improvements, technology innovation, and fiscal accountability.”
Graebel also said that there will be a glut of housing during the next five years causing a “natural suppression in home values,” which will “to some degree, keep homeowners tethered to their current homes.”
He went on to state, “Until there is stability in the real estate markets, comparatively few people will be motivated, or in a position, to initiate a move.”
So what will the service and pricing model of the future look like? In Graebel’s opinion, “As the industry evolves there will be different service models from the most basic price point segmentation to the most sophisticated to align with an array of consumer needs. In the future the industry will do a better job than it’s currently doing in providing tiered levels of service.”
In terms of pricing methodology, he said we will see more flat-rate, door-to-door rates based on consumer-selected options. He also states, “There will be a demand-side equation that will stimulate the industry to price its services more on the consumer’s terms going forward as opposed to the regulatory and industry terms that have dictated the design of tariffs and pricing formats in the past.”
Graebel has an optimistic outlook on the industry’s future: “It’s a great time to be in the moving and relocation industries. Granted it is certainly challenging, but it is a great time to be at the center of all the dynamic changes we’re seeing in the global economic interdependence and human mobility patterns.”
In his closing comments Graebel shared that “Figuring out how to resonate best with the customers of the future and building a sustainable organization that is ‘right for today and ready for tomorrow,’ is really exciting to me, especially when placed in the context of an ever-emerging, digital world. I think we will all be exposed to a great new era of “consumerism” that reshapes our industry. Those companies who understand their consumers better than the competition will have an opportunity to flourish and exceed what they once thought was impossible!”
Visit MOBILITY Online for More From Bill Graebel, SGMS
Author Eric Reed sat down with William (Bill) Graebel, SGMS, CEO of Graebel Companies, Inc., Aurora, CO, and a member of the Worldwide ERC® Board of Directors to discuss the future of the moving and storage industry.
Visit www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/1210-Reed-Graebel.aspx to read a transcript of their conversation, including discussions of the U.S. housing market, commoditization of services, and the future of
household goods movement.
The Resolution
I’ve heard it said that life imitates art (and vice-versa). It’s interesting to note the parallel between the traditional three-act play and the three-part structure of the universal time continuum (i.e., our past, present, and future).
This article is the final in a three-part series focusing on the past, present, and future of the moving and storage industry (The first, “Crossroads in the Moving and Storage Industry” was published in the May 2010 issue of MOBILITY, and focuses on the industry’s past. The second, “Analyzing the Perfect Storm,” was published in the June 2010 issue of MOBILITY, and focuses on the present state of the industry).
Continuing with our “three-act play” analogy, the industry’s past (Act 1) is the “setup” for what is to come. The industry’s present (Act 2) is the “confrontation” that the industry is currently facing with its many economic, competitive, and pricing challenges. And, finally, the industry’s future (Act 3) is the “resolution” when we eventually see how the story turns out.
Regardless of how optimistic or pessimistic you may be about the industry’s future, few can doubt that the final plot should be a compelling one.
As we move into Act 3, I choose to remain optimistic in the knowledge that the final script will be written by talented industry professionals with ingenuity, persistence, hope, and sheer determination. Those industry leaders with the “right stuff” will lead the pack and create the industry’s future while creating their own.
“When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.” –John M. Richardson, Jr.
Eric Reed, CRP, GMS, is director ofcorporate business for Berger Allied, Fullerton, California. He can be reached at +1 714 420 4268 or e-mail ericr411@cox.net. Full interviews with industry leaders can be viewed at www.ericreed-online.com.