One Opinion on Some Moving Industry Trends
As this decade ends and we usher in a new year and a new decade, it may be worth reviewing some history and perhaps conjecturing on what we might expect in this new decade. Sources for consolidated data on the global moving, relocation and mobility services industry are hard to come by so we will have to refer to some incomplete but available data. One source is the information compiled by the US Census Bureau. While there are many caveats about how this data may be interpreted, the numbers may point to some trends.
Without factoring for the economy, real estate sales and changes in lifestyle, the trend line seems to be apparent. The percentage of the US population that changes addresses each year is on a steady decline.
Reasons for Moving
Family related reasons for moving like changes in marital status or establishing new households seem to be on a declining trend line while job related reasons like a transfer for a new job, better commute, retirement are trending up.
Surveys conducted by the Worldwide Employee Relocation Council and major relocation firms confirm that millennials, who now make up the largest generation in the work force, are quite willing to relocate for job related reasons. The low unemployment rate in the US coupled with changes in immigration policies may suggest that a war for talent may encourage corporations to loosen the budgetary belt tightening that affected relocation benefit packages in the last decade. However, the relocation landscape has continued to make fundamental shifts.
Telework
Since 2005, regular work at home employees (non-self-employed) grew by over 173%. 50% of the US population now work at jobs that are at least partially compatible with telework options. As this trend inevitably continues to accelerate, one of the prime triggers for moving may become irrelevant. People may choose where they want to live not where they must work.
Flexible Relocation Policies
More corporations are offering flexible relocation policies which include lump sum allowances and core-flex options which allow the transferee more latitude in selecting relevant relocation benefits. While lifestyle preferences which guide furniture and fixture investments may mature, most millennials may view personal possessions as more disposable in nature. These trends may continue to evolve but the noticeable trend of lower household goods shipment counts and lower overall shipment sizes may not reverse soon.
A related trend is that once a transferee has elected a lump sum package, they now act as a private moving consumer. Such change offers opportunity to moving and relocation companies that are reinventing their services to appeal to the needs and requirements of a more technically adept millennial whose buying motivations are quite different from the corporate transferees of the past.
Industry Aggregation
Mirroring the business environment in general, the moving, relocation and mobility services industry continues to undergo consolidation as it matures. In the US, it is estimated that there are over 7000 companies providing moving related services. That number would more than double if we included mobility and transition related services. The industry is made up primarily of small entrepreneurial businesses. Most employ less than 5 people and only about 8.5% of moving companies employ more than 100 people.
As second and third generation family companies struggle with succession planning, many are facing the decision of either making major investments to scale to the next level or putting their businesses up for sale. Both scenarios are playing out, but this is an industry with a very low barrier to entry. The industry continues to provide opportunities for new entrepreneurs that are successfully exploiting market niches or leveraging technology to disrupt the market altogether.
Relocation service companies are facing their own challenges. Several high-profile mergers and acquisitions have taken place especially related to moving services companies that have tried to make the leap to become global mobility services providers with varying degrees of success. Certainly, this segment of the industry may be subject to further consolidation activity in the new decade.
A few high-profile developments may justify attention. One is the potential acquisition of Cartus by Sirva which has been announced by not consummated. The aggregation of such volume within one organization may serve to create opportunity or force the rest of the industry to respond in order to compete.
The US Department of Defense is marching purposefully forward with its plan to award a single source contract to one company to manage its global moving services. With an estimated 400,000 moves, the US DoD is the single largest shipper of household goods in the world. Imagine the consequences if Sirva, which is one of the potential bidders, receives this award.
Just Some of the Trends
Providing a more detailed opinion on the many trends affecting our industry and business in general would make this a book rather than a post. Perhaps, we can explore some of the other interesting trends in future posts. I’m sure that you have an opinion and I invite you to join the discussion.
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