Van lines rush to diversify as once mobile Americans stay put
Most summers when school gets out, moving vans pull up outside thousands of homes to carry transferred managers' household goods to new locations.
But this summer, fewer workers are being sent to new locations. And many individuals who have to pay for their moves are staying put as well. As a result , the nation's moving industry has hit hard times.
''It is a basic question of housing economics. If you can't buy or sell a home, you can't move,'' notes James Wilson, United Van Lines senior vice-president. ''And because of the depressed economy many corporations are not shifting people.''
With both sales and profits slipping, many agents - those independent businessmen who own moving vans and ware houses - find themselves pushed toward the brink of bankruptcy. To cope, the van lines the agents work for are moving more aggressively into new businesses - such as photo copying and temporary secretarial services - to keep cash coming in.
''If we had been 100 percent dependent on household goods, we would have been out of business by now,'' says George Smith, president of Bekins Moving and Storage. Bekins is the company that has been most active in diversifying out of the traditional moving business.
The upheaval in the moving industry offers some advantages to customers. The experience level of moving crews is higher since workers with less experience have been laid off. And firms are offering various kinds of discount plans.
''Some carriers have chosen not to take the summer (10 percent price) surcharge while others are giving discounts,'' says Charles Irions, president of the American Movers Conference, a trade group.
The upheaval in the moving industry is the result of the sluggish economy and the difficult housing market. With mortgage rates hovering around 17.5 percent, houses are difficult to buy and sell. And the lagging economy has hit corporate profits, making firms examine each move more carefully.
''(Corporate) moves are down this year,'' says Chris Collie, executive vice-president of the Employee Relocation Council, which tracks move-related matters for major corporations. A recent survey of 875 council members found a third of them plan to reduce the number of employee moves in 1982, while only 15 percent planned to increase moving activity.
As a result of the reduced number of corporate moves and a decline in moves individuals pay for themselves, the number of shipments has taken a dive at most moving companies. ''Our shipments are down 10-15 percent for the year to date,'' says Edward A. Bland, president of Atlas Van Lines. United Van Lines reports shipments about 8 percent below last year. Industry wide statistics for the first half of the year are not available yet.
Profits have slumped along with volume. In the first three months of 1982, only four of the 15 largest van lines posted a profit. ''The first quarter of 1982 was a disaster for everyone,'' says Ray Atherton, chief of the compliance branch at the Interstate Commerce Commission, which oversees the moving industry.
Local moving agents have been even harder hit. They own the moving vans and warehouses and make the moves, while the van lines book the orders. ''The agents are the ones who carry the bulk of the entrepreneurial risk,'' Atherton notes. According to industry sources, roughly 25 percent of the nation's 13,000 agents are in serious financial trouble.
Move-it-yourself truck rental firms do not seem to be profiting significantly from the moving industry's woes. While rentals for use in one city are up 5 percent or more, ''intercity (rentals) are about the same as last year,'' says Jerry Riordan, director of one-way operations for Ryder System Inc. in Miami.
Van lines are adopting a variety of strategies to help themselves and their agents through difficult times. Diversification is one typical response. Bekins, for example, has started offering business services, such as mail forwarding and answering services at locations in California and Texas.
Other van lines are using their trucks to carry a variety of products. Movers traditionally have carried trade show displays and computers. ''Now we are moving goods from the manufacturer to distribution'' channels, United's Wilson says. About 45 percent of North American Van Line's revenues come from moving items other than household goods, company sources say.
While 1982 is not a banner year for movers, there still are bright spots in the moving market. Perhaps the most promising is the office moving market, a result of the amount of office construction going on. ''The office (moving) business looks like it will grow at a significant pace over the next three years ,'' Bekins president Smith says.
How moving companies rank
Share of moving revenue of the top US carriers North American Van Lines 18.8% Allied Van Lines 18.0% United Van Lines 16.6% Aero Mayflower Transit 12.2% Bekins Moving & Storage 11.2% Atlas Van Lines 8.8%
Source: United Van Lines, based on share among the top 15 carriers.