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What’s happening to the moving and storage industry? Some major van lines are shutting down and others are being bought and sold. Why? In this article, we’re going to explain what’s going on with the industry and why this might be happening.
A special thanks to Larry Kruger for providing this video and insights into the industry. Make sure you subscribe to his Youtube channel. He goes into many topics about the moving industry that are fascinating.
Why is the moving industry (mainly the van lines & long distance moving model) on a bit of shaky ground?
As Larry mentions in the video, at no fault of their own, it’s the millennial population.
Millennials are not living the typical lives of their predecessors baby boomers and their parents.
Back in the day, the typical roadmap was you went to college, got a job, and had a family. The money most people made at their jobs out of college was enough to pay rent, make student loan payments, have day-to-day living expenses, and enough to save for a down payment on a future home.
This was the typical roadmap for the previous generation and the millennial generation simply isn’t doing the same thing…at least those who are still in their 20s.
As a millennial myself and what I see among my peers, it’s not that we don’t want this to be our roadmap, it’s simply because the road to this kind of life is much steeper today than it was in the past.
Yes, the economy is doing great, but too many millennials still aren’t making enough to cover today’s cost of tuition (which has tripled since 1980), today’s cost of a 3br home (which has tripled since 1980), and the cost of health care (which has increased 10x since 1980)…All while the average household income (at least in California) has only gone up from 35k to 55k.
I did some quick research on income levels and 3br home prices in California in 1980 vs. 2019. And without going into too much detail, here’s what I found.
In 1980 rent/mortgage for a normal 3br house was about $946 – 41.7% of monthly income.
In 2019 rent/mortgage for a normal 3br is about $2837 – 77.3% of monthly income.
In today’s world, among the rising cost of higher education, rent/mortgage, and health insurance, many millennials who went the “college to job” route don’t make enough money to cover these expenses and afford to buy a home that requires professional movers to move their items.
Along with the cost of living, when moving long distance, millennials (and the rest of the population who are feeling some of these price increases) understand that it makes more sense to sell their cheap furniture (which is super easy to do on Craigslist etc. nowadays) before they move and decide to buy all new and cheap furniture when they move in.
While the local moving industry isn’t feeling this as much as the van lines are there is a small disruption going on in the moving industry as the millennial generation begins to mature.
Whenever there’s a disruption or change in an industry, there is also a major opportunity. While most large companies will have to shift and make major changes to their operations that require a lot of money and resources when this happens, smaller more adaptable companies can come in and take advantage of all the areas large companies haven’t adapted to yet.
Take Amazon – Amazon is on its way to completely put department stores out of business. Now, you can say, “oh my gosh, how terrible, everything sucks”. But, while Amazon is putting major department stores out of business, they are also creating massive wealth for new businesses who have learned and understood how to sell their products on Amazon.
The moving industry is no different. While major changes happen, as a moving company, you need to learn how and where to adapt to the changes. And if you’re one of the first to adapt, it will be easier to succeed.
Which type of company are you going to be? The one who complains about the size of the wave and how unfair it is? Or the one who’s going to suck it up and ride the wave before it comes and bulldozes you over?
What Are Some Areas You Can Take Advantage?
One of the biggest areas that large companies, as well as van lines, are losing to the new players is marketing.
The entire landscape of marketing has been changing significantly year after year for the past 20 years. Many large companies either don’t have what it takes to make those major shifts or they’ve gotten too comfortable with the old model they’ve used for years and years.
This is an opportunity for smaller companies. Check out this post on:
17 Ways To Generate Leads For Your Moving Company.
We’ve listed some great ways to get leads and market your moving company in today’s landscape.
Containerized Moving & Storage
When it comes to moving long distance, as Larry mentions above, a big player in the industry is containerized moving and storage. As a millennial myself, for me at least, it makes much more sense as a consumer to move long distance this way than how it’s done currently.
As another side note, from what I’ve seen online, the majority of moving companies who have poor reputations are those who provide long distance moving services. Why? Because of logistical problems. One of the most common themes I see on a long distance moving review is this: “Where is my stuff? I was told my shipment would show up in a week and it’s been 2 months!”
The containerized shipping model will hopefully fix this problem as it matures. With the containerized moving model, consumers will be able to track their containers and know where their items are at all times. Also, the containerized method should bring on more drivers who don’t necessarily need moving experience. As Larry said, it’s essentially a local move, a shipment, and another local move.
I am very excited to see where containerized moving goes, I have a feeling it’s going to be a major player in the moving industry and bring a lot of opportunity for movers who have a fleet of trucks.
Check out this podcast episode with Wade Swikle and the container service COWS.
Keeping Your Brand Strong & Rooted
One of the best ways to continue to thrive as a moving company is to keep your brand rooted in your community and your referral partners.
No matter how much the online marketing landscape changes or becomes competitive, getting referrals from realtors, property managers, previous customers, etc. helps bypasses the competitiveness of SEO, PPC, etc.
One of the most underutilized service that most moving companies don’t provide is commercial moving services. Why? Maybe movers don’t know how to get customers, or they don’t know understand how to provide certificates of insurance to buildings, or maybe they’re just a bit nervous to go into another market.
Office moving is a major source of business and although the techniques are just slightly different than household moving, it’s not too hard to figure it out if you know moving in general.
Here’s a segment from Ed Katz of the Office Moving Institute about Office Moving:
“Consider diversifying into office moving. Among the many benefits, the average Gross Profit Margin is 50% and labor skill is much lower than what’s required for a residential move. Claims are typically much lower because your clients’ employees are rarely emotionally attached to their furniture.
If you use the IOMI® bucket brigade moving method, up to 40% of your labor can be unskilled and hired from a temporary labor pool. If you do a large office move, you don’t necessarily need to use your own drivers to drive your trucks. When I owned my moving company, we used a company called Rent-A-Driver that provided us with professional drivers to “shuttle” our trucks back and forth between the old (origin) office location and the new destination. Rent-A-Drivers never touched furniture—they simply drove. ”
How To Acquire Large Office Moving Accounts
Whether you’re new to the industry or have had a moving company for over 20 years, it’s important to step away from your day-to-day tasks and gain a bit of knowledge on what’s going on with the industry and take a look at your company and ask yourself if your business is equipped for the future.
A special thanks to Larry Kruger and Ed Katz for their input and insights into the industry.
About The Author: Moversville Connect
Moversville Connect is a unique directory of moving industry service providers and resources that will help grow your moving business. Whether you’re looking for a new CRM for your moving company or a mover-specific SEO company to take your moving company to the next level, Moversville Connect will help you find the best service provider for your needs. Also, stop by the Learning Center, comprised of many valuable resources and information to help you grow your moving company.