State of the Moving Industry

Last year marked my 23rd year in moving industry, and it was the worst year I have ever seen. Industry casualties litter the landscape of 2016. I could write pages and pages of detailed reasons why the moving industry suffered so horribly over the last few years. Poor federal policies halted economic growth, combined with skyrocketing expenses for small businesses, increased regulations and taxes and insurance expenses have combined to hurt businesses in every sector. Despite all of this economic decline, wages counterintuitively kept increasing also created by government regulations and policies.

The 80/20 rule is very applicable to each business type in 2016 where 80% suffered while 20% were profitable. Often times the success and growth of the 20% will help stabilize the other 80%. However, that 20% was justifiably very reluctant to make large investments during an election year causing cash accounts to grow until it was clear which administration would be in office and what laws would be implemented and overturned. Businesses around the country stopped hiring, increased layoffs, stopped expanding to new markets, outsourced to different countries, and ultimately stopped paying to move many of their employees.

Movers who have historically hung their hats on national account business have been decimated since 2008 as the business has shrunk every year, and finally dramatized by a 15% drop last year compared to an already dismal 2015. Relocation companies jumped in to the moving industry so national accounts felt as if the one-stop-shop “solution” would ultimately save them money. On one hand, this service has influenced companies to continue moving their employees. However, the cost ultimately passes on to the mover and typically lowers the revenue to the truck. Some movers have worked with a few relocation companies to help keep the van operators profitable throughout all of this turmoil. However, there are plenty examples of relocation companies, van lines and movers who were desperate enough to stay profitable while truck revenue ended up being sacrificed and van operators around the country suffered.

A-1 Freeman leaders worked diligently and conservatively year after year for over 40 years to position us to be part of the 20% during an economic downturn. Our long-tenured and top quality team members trust each other well enough to be flexible and work together as changes were made in order to help us weather the economy. Because of our commitment to our customers, we were able to obtain the moves we wanted. And the moves we wanted were the more profitable ones so our van operators continued to be successful. Our top quality allowed for access to profitable military business while we added national accounts. As a result, A-1 Freeman has more national accounts currently than at any time in our history, including several GSA accounts. As military and GSA rates increased, we mirrored our national account rates in order to maintain profitability. Although our overall national account business was down last year, it has come roaring back since the conclusion of the election and is already on pace to set a company record.

Expansion into new markets and acquisition of long-time movers has opened up more opportunities for A-1 Freeman to appropriately service our customers. The recent warehouse openings in Colorado Springs, Little Rock and Wichita Falls has increased our inbound and outbound traffic tremendously and we are already building market share in each region. The acquisition of Andrews Van Lines and Albert Moving has brought onboard a great group of impressive employees and van operators. At a time where relocation demand is set to significantly grow, we are uniquely positioned to offer a high quality service amongst an industry that has lost tremendous capacity.

Let’s make 2017 a great year for us all! - Jerad Lovett, EVP of Operations for A-1 Freeman Moving Group