Household Goods Moving 101 

Mobility magazine, November 2003 

The key to any successful moving and storage program is choosing the proper service provider. In today's shrinking economy, with more movers than moves, Boone says that this is an ideal time to review programs, policies, and suppliers.

By Mike Boone 

Though there are many components in the relocation process, the movement of household goods has the potential to single-handedly ruin even the most seamless transfer if handled poorly. With more than 5,000 moving companies in the United States alone, it is possible to partner with a carrier that can provide the perfect balance of price and service.

It has become increasingly evident that a moving company with a strong self-haul fleet, where the driver works for and is dispatched by the agent who booked the move, consistently outperforms agents who rely on van lines and fellow agents for assistance. The benefit to the transferee is the peace of mind of having the same driver throughout the entire move process. In many cases, the driver already is familiar with the policies and expectations of the corporation.

Typically, the more variables (packing, labor, storage, hauling, unpacking) the booking agent can handle themselves, the greater the chance of success. No individual has more incentive to provide the best possible service than the booking agent, simply because he or she has the most to lose.

For the most part, moves have the highest degree of satisfaction when the self-haul driver packs, and provides the labor, at the origin and destination. Providing just the driver and equipment may reduce the amount of risk of loss or damage, however, the driver and transferee still are at the mercy of the origin and destination agent for quality labor. In most cases, the best labor is being used on that agents' bookings and the outside driver usually will receive secondary personnel.

Self-haul/self-pack and quality service go "hand in hand" and it is by far the single most important feature of any successful corporate mover.

Hidden Cost Savings
As movers remain under tremendous pressure for price concessions, it is equally important that both corporate customers and moving companies find other ways to reduce relocation costs. With the average national account move cost at $8,600, and the average discount greater than 50 percent, each additional discount point is worth roughly $43. Considering those numbers, it may be wise to look at other areas for reducing cost. 

Some of the areas that may need consideration are:

Unnecessary third-party services (crating, appliance service, and the like). Crating, in particular, is becoming the rule rather than the exception. Because these services are not discountable, they can be very costly. In some cases, the cost of the crate actually exceeds the cost of the item! Why not require some justification of the value of items before authorizing crating?

On items such as pool table slate, gas dryers, and large pieces of marble or glass, crating does provide additional protection and safety is worth the additional expense.

Most estimates place the average cost of third-party services on corporate moves between $300 to $400. A carrier that can eliminate, when possible, some third-party expenses, in actuality will be providing their corporate customer the equivalent of an extra 8 to 10 percent discount. 

Intrastate moves. Moves within a state are subject to that state's pricing regulations. However, more than a dozen states are deregulated and do allow discounting. If you do not use the services of a move management or auditing company, it is important to know which states are deregulated. This information can be obtained at the American Moving and Storage Association's Web site at www.promover.org.

Combined purchasing power. Scott Enoch, CRP, supervisor corporate relocation for AIG, New York, NY, estimates he was able to save his company more than $500,000 annually by combining all integrated companies under the AIG household goods agreement.

"I have a responsibility to ensure premium service for our relocating employee and keeping an eye on costs for the company. The movement of household goods requires a general understanding of tariffs, discounts, inter- and intrastate regulations, packing, unpacking, shuttles, crating, and other third-party charges that will affect the final cost significantly. I can't stress the importance of having suppliers who not only understand our philosophy, but take the time to educate my department on how to achieve cost containment without hurting service," said Enoch.

"When we looked at some of our integrated companies and their household goods contracts, we realized that some of our new companies were paying more for household goods services based on a comparison of contracts. In one instance, a company with a comparable discount actually was paying considerably higher charges by allowing the application of the 104 exceptions tariff. What initially appeared to be 'equal' pricing actually resulted in net charges of $5,044 versus $3,586 on the very first invoice we reviewed. In addition to the seven-day delivery spread on this 150-mile move, the use of this carrier would have resulted in paying 40 percent more than we eventually paid," said Enoch.

400-N Versus 400-M
Since the inception of the 400-N tariff, opinions on its effectiveness seem to vary greatly.

The industry desperately needed a pricing mechanism that provided simplified pricing. As corporate relocation moved away from relying on transportation/traffic managers to human resource professionals, many were amazed at the complexity of the industry's pricing structure. The learning curve for anyone new to the industry, including drivers, billing department, and sales representatives, was much too long.

The 400-N does appear to do most of the major things it was intended to do, such as:

  • eliminate the per box charge;
  • speed up the process and meet corporate deadlines;
  • educe errors;
  • cut administrative billing costs; 
  • eliminate authorization and confusion on long carries, stair carries, and the like; and 
  • is simple to understand.

Dennie Lynn, Sr., vice president, transportation for Atlas Van Lines, Evansville, IN, provides this view.

"In the beginning, we anticipated considerable concern from our driver family [as did the industry], particularly in the areas of most additional services being 'factored into' an origin/destination service charge versus being 'single-line' items, and the simplified packing/unpacking charges. To address that, our operations management team became actively involved with our driver communication/education processes, and that seemed to be a very effective approach for us."

Said Lynn, "To date, we have had very little difficulty with the 400-N conversion that could be considered attributable to the change. Either as a result of our considerable preparation, driver's having experienced 400-N shipment settlements that have favorably addressed their perceived issues, or both, we only rarely have had any negative feedback from our van operators. Occasionally, we get comments from some that they would still prefer single-line items for certain additional services on moves that require more labor/time to complete than normal, but that's not a regular occurrence. Simply put, the tariff conversion has gone fairly smoothly for us thus far, and our initial concerns involving driver acceptance have really never materialized."

This type of pricing is not for everyone. Many corporate accounts still prefer to pay only for the services they receive. Many feel that the two tariffs are not "cost neutral" and feel the 400-N results in increased costs.

With the simplicity of 400-N it is very easy to compare costs and determine if it is beneficial. For those who prefer the 400-M, one of the hidden benefits to the 400-N may be that the 400-M no longer will be increased and then be discounted away.

Mike Boone is vice president and general manager of Lytle's Transfer and Storage, Inc., Tipton, PA. He can be reached at +1 814 684 3533 or e-mail mboone@lytletransfer.com.