Is there a problem in the relocation industry ?

As the high demand for household goods moving (HHG) increases and the supply decreases, why are we selling ourselves short. In recent articles and conversations, the HHG industry is complaining about the very long time it takes to be compensated by some relocation management companies (RMC). The benefits of working with an RMC are both the cost of acquisition (no need for a corporate sales rep.) and access to the corporate market with the potential of year-round business. (The same market we lost due to our inability to sell on a corporate level). These benefits however are eaten up quickly when dealing with 90 days plus payments. Coupled with a more subtle erosion of our foundation, that being losing our identity and our brand. Some Movers are also tied into the relationship by tens of thousands or even millions of dollars in receivables, handcuffing them to the cycle of slow payments. Something you may get used to but is still not right. ?

I am in a unique position, as I am not a mover, nor am I a relocation management company. I am an independent moving consultant, 100 percent pro mover and 100 percent sales focused. This unique position allows me to call a spade a spade. Given that luxury, in my opinion the relocation industry is ass-backwards. When do realtors get paid? When do airlines get paid? When do hotels get paid?

In a previous position we worked with a small relocation firm that would take up to six months to pay, when they themselves were paid in thirty days. With a larger global relocation firm, we had been asked to send in the “original’ paperwork three times. When we explained we had sent the original paperwork with our original invoice the confusion, AKA invoice clarification, AKA slow reimbursement continued again for months. Leading one to wonder how much of the no file fee industry is being floated on supplier owed money? ????

Is our industry ass-backwards?. Why are Moving suppliers waiting to get paid rather than paying the RMC a commission? If we take a page from the travel industry, airlines don’t invoice a travel agent, the travel agent invoices the airlines. With my small company, I put the mover directly in contact with the client and charge the mover a small fee for my up-front services. I realize that corporations must be properly invoiced, and the RMC is waiting for the corporation to pay them but there are massive expenses that are dolled out by the mover. If you are reserving a service, perhaps an up-front reservation fee is in order, passed direct to the mover from the corporation or RMC. A percentage paid up front to reserve a spot in a legitimate high demand service. ?This is not an unreasonable request.

As I see it there are two ways to approach this, one is a diplomatic approach, In that we all agree to a voluntary code of conduct, from the industry. All RMC would be subject to the same rules just like a COD model, perhaps it is 30-or 45-day payment after receiving the paperwork? ?Or another option is developing our own prompt payment law and demanding a reservation fee up front? Or the HHG industry urges corporations to instruct RMC in their RFP to pay in x number of days? ?The problem, like always, is that we are stuck in a scattered competitive industry with a lack of focus, even when we are losing our shirts, someone want to lose their shirt first.

The other approach is more drastic, but perhaps drastic times call for drastic actions. To be clear not all RMC are slow payers, and many try to pay in a reasonable time frame. The RMC is in a precarious position as well, with corporations demanding lower costs, why would they rock the boat and ask for a reservation fee or up-front money? The mover on the other hand deserves to be paid in a timely manner. If it is the corporation’s fault at least the RMC can explain the pull back by the industry.

If it is the RMC fault, then they must be called out by the industry. You do not need an intermediary to speak to corporations. RMC do not own markets. Case in point when I delt with the small RMC, I contacted the account and asked how long they took to pay the RMC. She told me 30 days and I went on to tell her that they dragged out our payment for 6 months, shortly after that RMC lost that account. We of course fired the RMC after we collected our money. In many cases good corporate citizenship includes prompt payments and corporations have no idea regarding the slow RMC payment time.

As mentioned in the other example above with the large international relocation firm that kept ducking our request for payment for close to five months, because of the original paperwork story. We told them we were going to go direct to the transferee for payment and received our money in weeks. To use a term from the relocation industry, it escalated internally very quickly. No one wants to piss off a customer but on the other hand no one wants to be treated like a mark. Always keep in mind that the contract signed (bill of lading) is with the transferee and if the industry wanted to start playing hardball, we have the option to go direct to the transferee for payment. Something that would certainly get the attention of both the corporations and the RMCs

Drastic actions are calculated risks, and many organizations are tied to a lot of money in receivables, so this is not a one size fits all solution. On the other hand, diplomatic efforts can easily be fluffed off in half hearted efforts by the RMC or corporation. The bottom line is that the mover must realize the value we bring to the process. You can not just swap out corporate movers; they are very few and far between. Our coveted crews and equipment are essential in a relocation and what we have brewing is a real issue that must be addressed.

All this is subject to an orchestrated effort from the industry as there will always be someone that will do the business. Perhaps the major associations can herd the cats or at least present an industry wide concern from all the members, in writing to the RMC and corporations?

?

?