Canadian Association of Movers L'Association canadienne des déménageurs

Into the Twenty-first Century: A View from the Van Lines

Christine Hanlon Recently announced by the moving industry’s single largest client, the federal government contract has once again set the tone for the direction of the industry and the future of the van lines. "We’re very excited about the positive news relating to the contract," says Anne Martin, president of United Van Lines. Among other features, she is referring to a rate increase that will help to address the issue of shrinking margins for van lines and their agents. The van line presidents agree that there needs to be better compensation for agents to deliver quality of service not only to the government, but to all clients. "What happens with pricing in the government rate structure will have an impact on what happens across the country," agrees David Way, president of North American Van Lines. "As pricing in the industry becomes more realistic, perhaps we can attract and retain more people in this line of work." Profitability must increase if retiring owners of moving companies are to convince the next generation to succeed them. At the same time, inadequate compensation and rising costs has led to an ongoing labour shortage of such skilled personnel as van operators, packers and drivers. "In the moving industry, we’re asking for more than just a driver," points out David Fennell, president of Allied Van Lines. "We’re looking for someone who has the skill set to handle customers in a very emotional time." However, from a social point of view, long haul driving is no longer an attractive lifestyle option, with men reluctant to spend long periods of time away from their families. As a consequence, the moving industry is losing its skilled labour to other sectors, including the more lucrative high tech community. "Evolving technology is both part of the challenge and part of the solution," says Doug Auld, president of Atlas Van Lines. "Harnessing technology as a tool helps create efficiencies and reduce the costs that drive margins," he explains. "The Government of Canada and large corporations such as the Royal Bank have encouraged service providers to get involved in e-based business." One of the stipulations of the government contract is that all van lines and their agents supply preprinted inventories by April 1, 2002. Technology will help to comply with this requirement. "This need will provide the opportunity to develop more effective communication, not only with the government and corporate clients but also with COD clients," says Auld. "In addition, by giving clients access to our data base, we can provide them with more reliable information about their particular move in a ‘real time’ sense." Reducing time consumed by entering basic data will reduce administrative costs while improving accuracy. Information that has traditionally been received by phone or fax will be received and transferred electronically. "More and more, new technology will be providing tremendous benefits for us," says Way. "The more paperwork we can get rid of, the more we can save. Communicating to each other over the computer is much less expensive in terms of communication fees. As well, with electronic documentation, we should be able to prevent problems, solve existing problems faster and work hand in hand to provide better efficiency to our clients." At Allied Van Lines, Fennell also sees the adoption of Web-based technology as both desirable and inevitable. He remarks that, besides building business efficiencies, technological advances have meant the advent of Web-based brokers courting customers on-line. Fennell feels that there is uncertainty at this point as to how the customer will choose to approach the moving industry in the future. "We went through relocation companies 15 years ago, now we’re going through the dot coms," says Martin at United. "They are trying to commoditize the service that moving companies and van lines provide to a level where clients will bid on a Website. I consider the moving industry to have a very high value personal sales relationship, particularly because this is an emotional time for the client." All the van line presidents wonder if the Internet is an appropriate place for purchasing those services without the client meeting with the service provider. "Do you cannibalize your own business to have someone buy it on the Website or do you hand it over to someone else?" asks Martin. "One challenge facing us is determining who is going to manage the future. Will it be the new entrant? Or, will we create a portal too, thereby transferring to a new business model but not losing the sale to a new entrant." The van line presidents agree that the success of on-line brokers will depend on their ability to attract consumers to their sites. The "dot coms" must attract a large enough volume of consumers to interest the movers. At the same time, there must be enough interested movers to offer consumers a viable option. Fennell agrees that the success of the on-line brokers remains to be seen. In the meantime, he perceives the development of on-line resources, including the increasingly-accessed Allied Web site, as an invaluable source of information for consumers. "Is the Internet the place for consumers to purchase moving services?" he asks. "Or is it the place for a person to become educated? Increasingly consumers who are meeting with the service providers are more informed and better prepared." "I do not see the dot com environment taking over our business because we are in a people business," echoes Doug Auld of Atlas. Auld does believe that the moving industry needs to diversify in other ways. Some agents are providing transportation services in "special products." Services include blanket wrap, shrink-wrap and crating of these products. As companies grow into these other markets, adds Auld, cash flow becomes an issue. He sees the role of Atlas evolving toward connecting these companies to one another and to other service providers. "We are also looking at unlike revenue sources that will help us reduce our costs to our agents," says Auld, explaining that Atlas may offer management and software services to non-transportation businesses. In contrast, Way of North American sees diversification as centered around the transportation industry. To reduce costs of long distance moves, he says, movers could hand off to the rail piggy-back or container system. After all, he points out, the industry is still fundamentally about moving household goods and providing quality of service. In fact, the government has recognized this emphasis by including a value index in its contract. The amount of business a van line receives will now be related directly to the quality of service delivered. "We’re all doing the same thing, but in different ways," Martin sums up. "I think there will continue to be consolidation in our industry. Mergers, technological advances, new entrants, labour — these issues will all change the face of those who do business in Canada as van lines or movers."

CAM Home Page | Magazine Index | This Issue

Posted March 20, 2002