Oh, the weather outside is (still) frightful…and regrettably, the HHG industry has some significant hurdles to contend with before we can suggest that conditions are melodically delightful. 2022 was a perfect storm of challenges, with widespread labor and driver shortages, soaring gas and fuel prices, and lingering pandemic restrictions causing delays.
This year, many of these challenges persist, but we have had time to generate creative, practical solutions and set clear expectations for our clients; we expect that this will ease many of the HHG aches and pains from the past few years and set us up for a strong start to 2023.
Here are some of the top household goods challenges to be aware of as we head into this year and how to limit the impact upon your mobile talent:
Real estate markets in some major urban hubs remain scorching hot, and rental and temporary housing stocks are at record lows. Ultimately, this means stuff is being stored for longer as relocating employees struggle to source homes in their destination location. Currently, 60-70% of shipments require storage versus the historical standard of 35-40%. Likewise, international shipments are now being held in storage at the origin, pending the availability of a container. This limits the availability of storage units internationally, and – Economics 101 – drives up the price of a household goods move.
Along with planning for higher storage costs, you may consider extending temporary living allowances to account for longer transit times and increased storage requirements.
We love a good surprise party. We loath a surprise port strike. And unfortunately, sporadic strikes are expected to continue in 2023, which can add considerable delays to shipments. Additionally, reduced sailings by steamship lines can bring about further delays internationally.
In the US, we are closely monitoring the recent Department of Defense household goods award and the potential impacts of California Assembly Bill 5 (AB-5), both of which may impact pricing pressures and capacity.
In tandem with these regional challenges, labor and driver shortages persist across the transportation industry. And while container shortages and port congestion are improving, they are still stretching customer transit times. We recommend mid-month moves as opposed to the first or last weeks of a particular month, which tend to be busier.
Smaller shipments present additional logistical challenges as they are combined with other loads to take full advantage of the truck or container capacity. But sourcing and combining multiple right-sized shipments can cause additional delays (like Tetris, but less fun). So, while you may think the smaller the load, the easier/sooner you’ll get it, that’s not always the case.
Early initiations get the worm (that’s the saying, right!?). Since shipments are expected to take longer, placing initiations with your RMC, and connecting the mobile employee with their assigned move coordinator as early as possible will help kickstart the process (scheduling surveys, assessing needs, scheduling dates, etc.). Ample lead time, particularly for VIP moves, will be our best tool to help work around regional hurdles and backlogs and limit the time the relocating family is waiting for their goods.
Early planning and frequent communication are also vital to managing expectations. After all, you may be moving employees willing to wait longer for their belongings to keep costs low. Offering these employees options like pre-approval for extra baggage while they wait for their shipments can go a long way toward keeping them happy and productive. It’s a small price to pay now for a better return on your investment later!
As your RMC partner, we remain committed to reviewing transit times with your mobile employees, keeping you abreast of any changes, and consistently working towards unique solutions (including enhancements to our VIP household goods solution and our small shipment solutions) to help you navigate a bumpy HHG landscape.
As always, if you have questions or concerns regarding your HHG strategy for this year, don’t hesitate to contact your Weichert account manager. And stay tuned for more insight into the latest household goods and shipping challenges.