In Business Relocation, Household goods’ moves come in all shapes and sizes, but the average size of shipments is on the decline. This is largely being driven by the fact that Millennials and Gen-Zers are making up a larger and larger portion of total relocations, and these demographics simply don’t have as much stuff as their historical counterparts.
For many Millennials, while they are older than Gen-Zers, they grew up gathering fewer belongings as a cohort than GenX and boomers. They are often satisfied living in smaller houses than their older counterparts. In the case of Gen-Zers, they have not accumulated too many belongings yet in their lives and are also choosing to spend their money on experiences over collecting too many things. These two generations with less belongings are coupled with a number of older transferees reducing their total belongings – call it going more minimalist and leaving some furniture to the kids.
But the Moving Industry wasn’t built for a 5,000 lb move
According to one mover interviewed for this article, the business is solidly built on moves that are 8,000 lbs. But some of these smaller moves can get as low as 1,000 lbs.
So, what’s so hard about a small move?
Small moves are a big logistical problem. First, you often have to go into the downtown core of a city, and you are amortizing that effort over only a few hours of work, rather than two days of work to pack up the belongings, carry out the furniture and load it onto a truck. So, it does partially come down to an issue of labour.
Then, you have the van size. If you are going from Toronto to Vancouver, then you have a real problem, because you can’t possibly only fill a truck 1/8 full and still make money on that trip. You have to wait until other goods (someone with larger quantities of stuff) are going in the same direction, and then you can piggyback. This creates frustration in the transferee because a small move would seem easy and efficient and when they see that it may take 3 weeks (+/-) for them to get their goods because the truck remains mostly empty, they are naturally disappointed. And even the pick-up can be affected. Quite often, movers picking up small moves will give a 5-day spread as to when they can come in to pack and load the goods, making the move even less convenient for the transferee. Often, movers may also need to charge a minimum weight (2000lbs+) for a trip to be profitable.
And don’t even ask about the summer. All Points has written about summer being the heavy moving season in the past, but in the summer small shipments continually fall behind larger shipments.
Furniture allowance for Employee Relocation?
All Points has spoken before about giving Furniture Allowances in lieu of supporting someones’ movement of household goods. This is even more important when it comes to small shipments moving overseas (Global Relocation) and with Gen-Zers or others with furniture that is less valuable (or may not even survive the move if it is Ikea that has been moved a couple of times before). But it can also come in handy with intra-North American moves as well, because of the challenges and costs described above. Let the employee take excess baggage or courier smaller items, and those objects of sentimental value, and give them an allowance to purchase furniture. The allowance amount depends on company budget and the level of employee but should be in more policies.
We are also seeing that there is often an incentive of a pre-calculated amount in lieu of moving household goods entirely, without specification that it be spent on furniture. Of course, this would be taxable and sent through payroll, or better yet through your RMC. Employees opt for this frequently, but it can also cause a problem if they wish to pocket the money and rent furnished housing in a destination city that whose market does not have many furnished rentals, such as many Canadian cities. It is almost always cheaper to buy new or used furniture compared with paying a premium for furnished accommodation over unfurnished accommodation.
Small shipments remain a challenge for the industry, but a number of players have risen to the occasion and today’s solutions are a vast improvement over waiting for the right household goods moving truck to be full and going in the same direction.
If you find yourself relocating employees with small shipments, talk to your RMC about solutions that are right for you.