The Last Mile – An Opportunity for the Moving & Storage Industry?

The professional moving industry may be maturing with shipment counts and volumes on a bit of a declining trend but there is still great demand for high quality, professional moving services.  Constantly faced with seasonality-related issues that compress about 60% of the moving volume into about 40% of the year, professional movers have always been interested in diversifying their business mix. 

Some of these diversifications have spun off into businesses that rival and surpass the moving industry itself, in size.  Records Management and Self-Storage services are two examples.  For some movers, these diversifications have turned into their main business.  Others who could not adapt and innovate have been unable to compete in such a rapidly changing business environment.

What is Last Mile Logistics?

There’s been a lot of buzz recently about Last Mile Logistics and much of it relates to package delivery.  Simply put, transport systems are efficient and fine-tuned for getting goods from the manufacturer to a local store or warehouse but when it comes to delivery to the customer’s door or providing delivery and setup in the customer’s home; that is another matter.

Growth in online retail sales driven by giants like Amazon and Walmart has created a new shopping paradigm.  It was only a few years ago when online shopping that started with books and spread logically to smaller household articles, electronics and appliances, became a thing. Back then, we might not have noticed the revolutionary changes that the apparel industry was undergoing.  Most consumers could not imagine buying clothes or shoes without touching, feeling and trying them on at a store.  Today, with the total market share of online retail sales higher than department stores, online shopping has become the way to shop.

I want it now.

Amazon Prime proved the power of one-day delivery in driving retail sales online but what about furniture and major appliances that not only require rapid delivery but also placement and installation in the home or office?  According to furnituretoday.com, a website focusing on furniture industry trends, online sales of furniture and bedding totaled US$15 billion in 2018, up 6.4% from 2017.  The same trends are affecting major appliance sales.  Stores are finding out that they can avoid the cost of carrying large inventory stocks by having a showroom instead of a retail store. This setup allows customers to choose colors, styles and options for custom-made furniture, delivery of which is fulfilled directly by the manufacturer.

E-commerce is also moving the purchasing of office and institutional furniture and fixtures (think hospitals, schools, etc.), online.  New online retailers unencumbered by rental, store staffing and related expenses are cutting out the middleman and offering new competition to brick-and-mortar establishments.  What they are discovering though is how important that last mile and in-home service skills are, in delivering total customer satisfaction. 

But wait, isn’t this that the core competency of professional movers?

The Opportunity

Movers have been providing furniture, fixture and equipment (FF&E) installation services for many years.  So, how is this a new opportunity? 

Many astute movers who have early on recognized the opportunity now have growing businesses offering final mile services in partnership with retailers and major logistics firms.  Opportunities are also forming for companies utilizing a van line agency type network to offer nationwide final mile services.

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While the territory seems like familiar turf to most movers, there are distinct differences for those that are serious about carving out a niche in this competitive market.  The first one is cost efficiency.  Traditional time, material and asset costing mechanisms employed by movers may not work.  The consumer is now conditioned to free or near-free shipping.  While the costs may be embedded in the product, the point is clear that there is not a lot of margin for error or unnecessary fat in the costing.

This means understanding how to make the process as streamlined, efficient and error-free as possible. This is where leveraging technology comes in.  A paper-based system just doesn’t cut it anymore.

Interoperability

There’s that word again.  In order to compete in this new world defined by Amazon Prime, systems must integrate and connect so that data can seamlessly flow between the disparate parts of the logistics chain including and perhaps especially for the final mile service provider.  A number of software and logistics solutions providers are offering systems that enable this connectivity, but none have enough traction and market share to establish a standard. 

Yes, Amazon is an online retailer, but its core competencies are technology and logistics.  If we want to compete in this world and not become relegated to being interchangeable parts in the supply chains of Amazon and Walmart, we must address the issues surrounding industry data standards and interoperability.  Unfortunately, the moving industry is in the same boat as the shipping and trucking industries.  We remain fragmented because of concerns about competitive advantage.  We look to our industry associations for leadership, but their actions understandably mirror and represent the fears of their own constituent members, resulting in gradual and very little forward momentum.

The Urgency

We need to recognize that the physical assets and services represented by the professional moving industry are in no danger of being displaced any time soon.  That is not the urgency.  What we need to recognize is that the control of our business will flow to the companies that implement and operate the near flawless technology that customers have begun to take for granted from companies with closed systems like Amazon, FedEx and UPS. 

We can choose to form or join a closed network capable of making the technology and process investments to compete in this new environment but this is not a model that is familiar or comfortable to the moving, transport and logistics industries which are primarily made up of small to medium-sized entrepreneurial companies. 

Or we can recognize the urgency and benefits of forming an industry alliance to tackle the issues of interoperability. 

Technology is not the barrier…the challenge is leadership.

Why I Gave Up Being a NIMBL

What do Artificial Intelligence, chatbots and automated self-service technologies have to do with the moving business?…and what the heck is a chatbot, anyway?  All this technology stuff was not supposed to happen until sometime in the future, like 2020 or so.

Oh, wait…2020 is now.

Perhaps you have been one of the NIMBLs.  Not In My Bloody Lifetime, so-I-don’t-have- to-worry-about-it kind of people. Well, sorry…it looks like it may happen in your lifetime. In fact, don’t look now but some of it has already happened.

What is a chatbot?

Here’s a clue from a Wikipedia listing.  (and no, we’re not going to explain what Wikipedia is, Google it).

A chatbot is a computer program which conducts a conversation via auditory or textual methods. Such programs are often designed to convincingly simulate how a human would behave as a conversational partner, thereby passing the Turing test.”

Now, I remember seeing this silly little pop-up on one of those moving company websites.  As I started scrolling on the page, this message said “Hi, my name is Ethan.  Can I help you?”  I imagined my chat buddy was in Bangalore or Manila and asked whether local moving rates were regulated in Arlington.  The answer “Yes, we would be happy to quote on your local move.  Can I make a note of your name and e-mail, please?”

These Things are Hopeless….

Yes, the technology may not be quite there yet but before you dismiss it, think about this.  The pace of change and advances in technology are not linear; they are exponential.  If you think, chatbots are hopeless so I am safe being a NIMBL because they will never replace humans in customer service in my lifetime and certainly not in the moving business then consider facial recognition technology.

In the August 2007 issue of Discover Magazine, Jaren Lanier wrote “In at least one way, the smartest machines can’t match a baby.”  Jaren was writing about facial recognition technology.  Flash forward 11 years and I just paid for my groceries this morning by double-clicking my smartphone, staring into the screen and then waving my phone at the card reader.  Not only can the phone in my pocket recognize my face; I am willing to trust this technology with credit card payments. 

What is as remarkable as the technology is the pace of change and acceptance.  I now think nothing of this remarkable technology.  It has become ubiquitous and commonplace overnight.  I can’t impress anyone with my fancy phone and if it does not work properly or instantly, I will be downright indignant at Apple.

That chatbot may seem pretty hopeless right now but it is a machine running algorithms.  It can be taught or programmed and unlike people, once you teach it – it will retain that information in an exact and complete manner.  Oh, and have we considered machine learning, yet?  Where’s my Wikipedia?

Machine learning is a field of computer science that gives computers the ability to learn without being explicitly programmed.”

Uh…, what?  Yes, they will teach themselves.  And no, they do not stop to eat, sleep and other things.

So Back to the Moving Business…

Yes, so that chatbot is kind of hopeless right now but the convergence of a few factors may make the idea of putting an excellent chatbot into your customer service department a possibility soon.  I can hear you now.  NIMBL!

A nicely programmed chatbot will ask one or two questions and based on that understanding will offer up resources that may address your need.  I’ve had the opportunity to use some and they hit the mark about 50% of the time.  If 50% of your customer inquiries could be addressed by efficiently routing the person to the right online resource, is that a bad thing?

Automated Teller Machines

Sure, these new technologies don’t always work gracefully at first.  Look at the ATMs that we now take for granted.

The first ATMs appeared in 1969.  By the 1980’s, they seemed to be everywhere.  There are lots of people that still won’t go near one but most of us have accepted the efficiency of slipping in a card and getting our cash to go.  ATMs and online banking services have replaced many of the functions performed by human bank tellers in the past.

Unemployment did not skyrocket.  We did not get dehumanized because we could not gossip with our bank teller.  ATMs are not immune to fraud and theft but neither are bank tellers.

Just as some of us are starting to get used to the idea, we have news.  ATMs are going to join fax machines and 8 track tapes as endangered or extinct technologies.  I can now authenticate myself to my bank through facial recognition and use Zelle to send money almost instantly to my colleague on my mobile phone.  Why do I need cash in my pocket?

Meanwhile at the Grocery Store

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So, if you think this technology stuff is not going to catch up to the moving industry, take a look at what’s happened to grocery shopping.  I can cruise the aisles and pick out my items.  I then proceed to the self-checkout aisle where I scan my own items.  It’s a little clunky.  My lemons have a small sticker with a 4-digit code that I have to key in but it works pretty well most of the time.

Just like the ATMs, the checkout system is getting better very quickly.  I’m betting it won’t be long before the scanner will recognize the lemon.  And just like the ATM, before we get a chance to get used to it, this technology will be made redundant.

Amazon just bought Whole Foods, a US grocery store chain, and they are now offering an online service with 2-hour delivery in some markets.

And speaking of Amazon, I have been a loyal Prime member since 1997.  You want to study customer service?  These guys are rewriting the book on it.  You remember books, right? Those paper bound thingies we used to read before we got all our information on our mobile phone.

I won’t go on about Amazon other than to say that in today’s news (which I read on my phone…) reports are out that Amazon is now ready to compete with UPS and FedEx on shipping services.  Well, at least Amazon won’t be looking at moving services, right?  NIMBL?  Do a search for “Moving Services” on Amazon.

Where Is All This Headed?

As usual there are different schools of thought.

In December of 2017, Elon Musk, Tesla’s CEO, updated his prediction that the first fully autonomous driverless vehicles would be available by 2019.  He predicts that by 2020, these cars will drive better than humans.  On February 6, a company called Embark completed a US coast to coast run in a modified Peterbilt tractor trailer equipped with safety sensors and self-driving software.  How’s that NIMBL working you, now?

There are estimated to be 4 million truck drivers in the US. Throw in a few taxi and Uber drivers, maybe some bus drivers, too.  In a study issued by Goldman Sachs, there is a prediction that 300,000 truck drivers may lose their jobs per year starting in 2025.

Those aren’t the only jobs that are under threat from Artificial Intelligence.  Think about your last doctor’s visit for your annual checkup.  How much time did your doctor spend with you?  After 15 minutes, she sent you off for a battery of blood and other tests.

People are currently wearing bands around their wrist that are measuring your vital signs 24 hours a day.  Remember that urine test from the annual checkup.  Your smart toilet connected to the internet of things will soon be monitoring those vital signs on daily basis.  That information and much more will be streamed by your mobile phone to a computer that is wired to the world wide web which will measure slight variations in your vital signs and compare them against all the past diagnoses in its database as well as current reports streaming in from the world.  You won’t be visiting the doctor when your feel bad anymore. Dr. Siri will tell you that you will be feeling bad in approximately 27 hours unless you take the following steps.

What Will All These Unemployed People Do?

An author named Yuval Harari has written two books which talk about the history of homo sapiens in order to understand the possible future of humans.  He writes about the possibility of a class of Useless Humans who may literally have no useful work abilities. Others, and I’m in this group, are more positive. 

With every major evolutionary step for humankind as we went from hunter-gatherers to the cognitive revolution, the agricultural revolution and the scientific revolution; some have predicted massive human displacement and dehumanization.  At each step, mankind has been able to reinvent itself and move forward.

What you make of technology, just as what you choose to make of a longer life span is up to each of us.  For some, both represent negative possibilities.  Others will see opportunity and positive possibilities.

So, what does all this have to do with the moving business?  Our industry is subject to the same pace of change, disruption and perhaps opportunities as the rest of the word.  Those that would ignore this do it at their own peril.  What we choose to do about it is totally up to us.  Some will embrace change and even attempt to be at the leading edge of it.  Others will choose a steadier approach.  I believe there is ample room for both approaches.

There are many customers who still appreciate and want a hand-crafted personal service approach with the human touch.  Others will appreciate a more flexible, self-serve approach. The market can still accommodate both.  For those that are still feeling a bit NIMBL, I hope this article shows that change is inevitable, constant and here now; but what we choose to make of it, is up to us.

Imagine

Imagine

On April 26, 1956, less than 1 year after I was born, a converted World War II tanker named Ideal X, made its maiden voyage from Newark to Houston carrying the first 58 metal shipping containers.  By the time it docked in Houston some six days later, Malcolm McLean was already taking orders to ship goods back to Port Newark in containers.

Just 5 years later in 1961, the International Organization for Standards (ISO) set the standards for these most commonly used steamship containers, the same containers we use to this day.  There were many challenges along the way.  Imagine setting standards for chassis, container chassis locks, and gantry cranes.  Imagine overcoming the opposition raised by existing equipment owners and organized labor. Imagine facing the huge risks financing these costly containers posed.

What we know is that it took more than a great idea. It took great men, great leaders to triumph over every obstacle, every objection.  It took courage to financially back the idea and vision to work collaboratively to share the standards that would create the global system that we use today.

Imagine for a moment what the world would look like today if this standardization had not taken place.  Almost every facet of our lives and daily commerce that we take for granted would be affected.  We truly owe those visionaries and leaders a great debt of gratitude.

Containerization & The Domestic Household Goods Moving Industry

Interestingly, containerization in our domestic moving industry has been around almost as long.  Recent realities like driver shortages, environmental issues and the erosion of our market share to self storage, portable storage, Do IT Yourself and non traditional containerized transport operators are causing us to look at containerization again for domestic long distance moving solutions, hopefully with a different view this time.

Perhaps this time, we might look at it with the benefit of hindsight and consider the successful models used by steamship and rail lines.  We really don’t have to reinvent this wheel.

In fact, I suggest that we should piggyback on those successful models, which already form the backbone of our transportation infrastructure.  If we are looking for modular standards that will help us deploy existing truck, rail and ocean freight capacities in favor of our current model of a single power unit pulling a single moving trailer, then let’s start by understanding that successful models already exist.

Since we are examining existing wheels which seem to work very successfully, let us not forget that hundreds of thousands of international moves are being handled every year utilizing ISO-standard ocean and rail containers.  Transit insurance companies will tell you that the claims incidence is not any worse than domestic blanket-wrapped shipments in specially equipped air ride suspension vans with tiedowns.  In fact, they might even say that the claims experience and packing standards are better.  Yes, the skill sets in loading an international shipment are different but let us leave that subject to the side while we imagine.

Speaking of successful working models, what about the US military and US Department of State moving programs which mandate that shipments be packed in fairly standard-sized lift vans?  Again, hundreds of thousands of shipments every year are moved fairly efficiently with not much difference in claims rates.  Curiously, the standard size seems to be modular.  10 will fit quite neatly with not too much waste in a standard ISO 40 foot container.

Yes, it is true that not all household items will fit in those lift vans but the industry has adapted successfully.  Just ask the hundreds of thousands of customers that were moved in such containers last year.

Imagine

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Let us suspend disbelief for a few moments and imagine a world in which our industry leaders could take those cards pressed so closely to their chests for competitive advantage to loosen their grip in favor of collaboration and common benefit.  Perhaps with the spirit of those pioneers who paved the way for standardization in the ocean freight industry, we could sit down together and put those cards on the table.

I think we would be surprised to see how similar our cards are and hopefully we could take one step toward collaborating on a modular industry standard that would allow for the economies of scale, interchangeability and efficiency required to overcome the high asset cost, asset tracking and container repositioning issues which have caused repeated failures in the past.

Hopefully, we could hold back the emotions that seem to color the discussions about paper pad-wrapped shipments in ISO containers or lift vans transported intermodally.  The conclusions that these methods are too expensive or that the claims ratios are too high are just not supported by the hundreds of thousands of international shipments that move in exactly that way.

Conclusion

If we fail to collaborate toward global industry standards, the danger is that we will continue down the path of cannibalizing our own businesses. Efficiency gains are the only answer and we have extracted enough concessions from our Owner Operators.  They are now voting with their feet.

While it is clear that the traditional professional moving market has contracted, there is a great deal to be optimistic about.  The skills that we have as final mile operators are unique.  We know how to pack and load.  We own a great deal of infrastructure in the form of warehouses and trucks.  We have trained staff that know how to deal with the world collapsing around Mrs. Jones during one of the most stressful times in her life.

Professional movers handle less than 27% of the US moving market and we are giving up precious market share every day to new competitors.  There are new markets that are perfect for our unique skill sets but we first need to solve this critical infrastructure problem and turn this adversity into a competitive advantage for our industry.  I believe we are at an important inflection point in the history of our industry.  We can continue to stand alone and jealously guard our respective competitive advantage or we can come together as an industry to solve this critical infrastructure issue.

Gratefully, we can benefit and learn from the vision and leadership of great men like Malcolm McLean who helped to revolutionize shipping and changed life as we know it in the process.  So, take a moment.  Imagine our industry continuing down its current path and envision what our world will look like 10 years from now.

Now, think what would happen if we come together cooperatively as an industry to solve this critical issue – together.

Just imagine.

Technology – What Return on Investment?

Technology – What Return on Investment?

As an industry, we are not necessarily known for technological innovation.  While mobility services can be considered a fairly basic service industry, there is an amazing level of complexity that can surround our business.  Some of that complexity results from our own convoluted legacy processes but some of it is also related to the high-touch, one-off, very personalized nature of our business.

While consolidation in our industry continues to create businesses large enough in scale to justify proper investments in information technology, most of us are small to medium-sized enterprises that find it difficult to afford the investments that are necessary.  Gordon Moore, cofounder of Intel, observed in 1965 that the number of transistors per square inch had doubled every year since the integrated circuits that power our computers were first invented.  While the pace may have slowed recently, customer expectations based on this observation have not.  Consumers expect faster, smaller, more powerful products at ever lower prices.  That expectation is not limited to computers and smartphones.

The Role of Technology in our Business

In our hyper competitive business environment, our customers have come to the conclusion that service excellence is no longer a unique differentiator.  With the increasing availability of information systems connected through the Internet, customers view themselves as sophisticated shoppers able to quickly filter their choices down to a list of relevant suppliers.  Price has logically become an obvious, important determinant.  In order to avoid becoming commoditized, we have to understand what differentiates companies in the minds of this new class of customers that turns to Google rather than the Yellow Pages.

Increasingly becoming more and more important is both an understanding and investment in technology in creating this differentiation.  Corporate customers, for example, view service excellence as the cost for admission to contend for their RFPs.  Service delivery no longer differentiates but information about service delivery does, i.e., the application of technology to play back relevant information that is useful in gauging the value and quality of the service delivery.  Technology that enables work processes to become more transparent and efficient spells the difference.

The industry is not shy about making the promise to deliver such differentiations.  The actual results have been mixed not just because of shortcomings in our ability to adapt to new technology.  The failures are often related to inertia on the client side.  Customers “buy” the high-tech gimmicks but often fail to commit when it is time to implement and actually use the technology.

On the private customer side, things are changing as well.  A new generation of consumers that  has grown up with the World Wide Web now expect service and information, online 24 hours a day, 7 days a week.  They are more comfortable with technology capable of helping them do their own survey online.  Consumers who are used to shopping and banking on the Internet may rather compare movers online and instantly book their transaction with a credit card than entertain 3 separate Moving Consultants with appointments that require days to return with a proposal.

While the traditional business models in our industry are in no danger of disappearing immediately, anyone that does not see these trends and understand their effects on our business may be closing their eyes to opportunity.  Yes, there is opportunity and if you look around closely, you can see new online business models being established – some successfully.

Investment Required

For small to medium-sized enterprises, keeping up with the pace of technological change and related consumer demands is too big of an investment.  Off-the-shelf software solutions created for the industry have helped in reducing this investment cost but the mistake often made is that (having gotten over the tough decision to invest in a new operating software), most companies typically underinvest or fail to invest at all in a proper, disciplined implementation that includes a strong commitment to user training and support.

Consultants speak of Total Cost of Ownership as it relates to software and there is no agreement on the right ratios but by way of example, one formula shows that software cost should be some 22% of overall spend on the system.And your company has always treated me well and saved me the trouble of running all over town to get a prescription from your doctor first if you want to get over this disorder then use this very effective product called as cialis prescription sildenafil citrate pill . cialis is said to be useful in treating impotence. The real thing starts from below: Research – Acquire as much cialis viagra levitra information as possible on this topic. It is considered a disease, the third levitra prices most basic reason for death for adolescents. cute-n-tiny.com cost cialis viagra What is Erectile Dysfunction or ED? Erectile Dysfunction is common , and that everyone goes through it at certain moments of life.

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In my experience with large, medium and smaller enterprises in our industry, I have consistently noted a failure, in these companies, to recognize the importance of investments beyond the software, itself. I have often seen failed implementations resulting in tremendous disappointment, decreased productivity, business disruption and disillusionment all associated with this fundamental misunderstanding of technology investment.

Many companies in our industry are running their businesses and forcing their staff to work on crippled systems due to improper implementation.  Owners are quick to blame a faulty software but in many cases, the software may not be the issue at all.

When considering new operating system software, do a proper Total Cost of Ownership analysis.  If this is a skill set that you do not have within your company, it may be worth engaging a consultant that is experienced in this type of evaluation.  Understanding the total investment necessary in order to arrange a successful implementation and creating a plan that emphasizes the necessary user training and support can greatly improve the chances of success.

Conclusions

The good news is that our industry is starting to make some sense of the importance of wise technology investments.  Systems like RedSky which seek to serve a closed network, (UniGroup – in RedSky’s case) are making progress in connecting user companies and in using a collaborative, shared approach to IT-related investment.

Using such a collaborative approach within a closed network is a sound idea, in my opinion.  Much of the efficiency that can be gained from technology relates to the sharing of information and common resources.  Such sharing can only go so far in an open environment.  Even within closed networks, companies are reluctant to share too much information, a characteristic that points to why our industry remains too fragmented and inefficient.  While there are some great examples of organizations putting aside their own self interests for a moment in favor of the benefits of collaboration, we are sometimes too suspicious and too quick to dismiss great ideas that require cooperation.

Like it or not, technology is not a passing fad as some may have hoped.  Those who embrace it and learn how to leverage it to enhance their businesses and service offerings have a better chance of success.  Those who understand how to invest properly in technology will get better returns on their investment.

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