Moving coming up? US shift may cut cost
"We make moving enjoyable," boasts one van line on the side of its trucks. That's a line many would find hard to swallow. The actual process of boxing, crating, and shipping is one most people find onerous and worrisome, even when the destination is desirable.
But a number of the competitors in the moving industry are promising that in the near future they will be working harder to make that optimistic slogan ring true.
The reason? In October of 1980, former President Carter signed a bill deregulating the moving industry. Known as the Household Goods Transportation Act of 1980, this bill loosens the regulatory hold the Interstate Commerce Commission has had on the industry's activity.
Although the ICC has yet to work out all the ramifications of the new act, a few things seem clear.
One is that prices will become more competitive, although not necessarily lower. Previously all moving costs were determined according to a formula established by the commission. Now, the new bill permits the moving lines to raise or lower their rates by as much as 10 percent without its approval. With approval, the rates can flex as much as 15 percent.
A number of lines jumped almost immediately into the innovative pricing game. American Red Ball Transit Company is promising a 5 percent reduction in moving costs to all customers over 60. North american Van Lines is touting a sweepstakes -- "the first ever conducted in the moving industry," it brags.
Apart from senior citizens, sweepstakes winners, and others who clean up on similar gimmicky offerings, however, it is not certain what the cost benefit to the average consumer will be.
"We see deregulation as an opportunity to elevate the level of competition and to offer the customer better service," says Jack Harms, vice-president of marketing for the Bekins Company. "But the realities are going to be improved service rather than lower prices."
In line with this statement, Bekins is offering (pending ICC approval) some new service guarantees. These include a promise to reimburse the customer $100 a day for every day Bekins is late with a delivery, a guarantee that all items will be insured at replacement cost rather than depreciated value, and a system that will give the customer a firm price before the move, rather than just an estimate.
"If we had tried to do any of these things before," Mr. Harms comments, "it would have been a big bureaucratic process.The ICC would have had to examine all the minutiae."
Yet, some in the moving industry are less enthusiastic. Robert McHassie, senior executive vice-president of Mayflower, predicts that it may bring lower prices, but he also foresees a decline in service, and possible damage to the industry itself.
"I'm not sure it will be for the good of the industry," he comments, "I would rather have seen 'reregulation' instead of deregulation. I would have liked to have seen [the regulations] made more sensible, with an eye toward reducing paper work." Proponents of deregulation have argued that deregulation will do just that, but Mr. McHassie predicts that "it will probably mean an additional amount of paper work. They haven't cut anything out."
He is also concerned that deregulation will force companies to quote rates lower than they can actually afford, and consequently many companies, especially the smaller ones, "will fall by the wayside."
Some involved in the moving industry are taking a "wait and see" attitude toward deregulation, pointing out that most of the new procedures won't be fully worked out for six more months.
As for the decrease in paper work, one Indiana-based agent for Allied Van Lines says wryly, "I assume from what they say on paper that [deregulation] will cut down on paper work. But it hasn't yet."
