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Relocation Rip-offs

September 1, 1998
Related Topics: Relocation Services, Featured Article
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There it was, broadcast on NBC’s television newsmagazine, “Dateline,” a segment entitled “Sleepless in Seattle.” Anchorwoman Maria Shriver asked millions of viewers, “When you think about some of life’s most stressful moments, what comes to mind? Final exams? Job interviews? For most people, moving day is up near the top of the list, watching that big truck moving away with all your worldly possessions. What if something goes wrong? Where do you turn?”

Enter the reporter’s voiceover: “Last spring, Kathleen Glossa of Philadelphia and her dog, Whitby, joined the more than 42 million others who the Census Bureau says pack up their homes to move around the corner, from state to state and across the country each year.”

By now, viewers know this isn’t a twinkly vignette about a white picket fence. In a nutshell, Glossa’s household goods -- designated to arrive between June 24 and July 7 -- didn’t make it to Seattle on time. When she called her movers, Hillside, Illinois-based Bekins Van Lines Co. on July 1, she was reportedly told that her goods might arrive on July 17, 10 days after the contracted window period. Exasperated, Glossa turned to another mover to pick up her household goods that were still sitting in a warehouse in Pennsylvania awaiting transfer to a larger van.

The second mover she hired did pick up and deliver her household goods to Seattle, but not without Glossa paying an additional $500 for a second small truck to drive up her narrow street.

Unfortunately, her experience isn’t an isolated event. An article in the Los Angeles Times (June 23, 1998) shared the plight of a couple who was forced to pay $5,500 -- in cash -- before movers would unload their goods from the van. The article states: “Complaints about negligent and unscrupulous interstate moving companies are on the rise, according to industry executives and government officials.” But “Dateline” reporters say, “It’s hard to know what the numbers really are.”

Indeed, since the elimination of the Interstate Commerce Commission (ICC), the moving industry’s watchdog group, in 1995, shady companies bent on ripping people off have increased, sparking complaints. Plus, Workforce spoke with industry analysts who contend that some mishaps are bound to happen due to the size and complexity of the relocation industry, even among reputable firms. Although industry experts say that moving casualties are less likely to occur in a corporate context, HR needs to take responsibility for clarifying terms and expectations to minimize the risks.

An increasing number of customers are dissatisfied.
According to Joe Harrison, president of the American Moving and Storage Association (AMSA) based in Alexandria, Virginia, America’s moving industry is one of the most complex and diverse businesses in the country today. It consists of large corporate organizations and “mom-and-pop” operations; chief executive officers and independents working in their trucks; van lines, their agency systems and independent movers.

The movement of household goods accounts for 49 percent of the industry’s shipments. The $7 billion-a-year moving industry employs an estimated 450,000 workers. Among AMSA’s membership alone -- which is comprised of 3,500 professional moving organizations, from the largest van lines to smaller agencies and independent carriers across the country -- there are approximately 66,000 trailers, 32,000 tractors and 18,000 straight trucks.

Despite the growth of this expanding industry, President Clinton’s government downsizing shut down the 108-year-old ICC, which used to regulate movers. By shutting down the ICC, consumers were stripped of an agency that monitored and investigated complaints.

Says Bob Dalaskey, vice president of sales and marketing for the household goods division at Bekins Van Lines Co. in La Grange, Illinois: “With the Congressional elimination of the ICC, there’s been a growth in ‘outlaw’ movers who’ve been the main cause of industry customer dissatisfaction.” Many of these smaller, unlicensed independents prey on trusting or confused consumers.

And this was certainly the case of the couple who was charged $5,500 in cash. An article in the Washington Post reports that Joel and Elizabeth Spieth hired Los Angeles-based North American Moving & Storage, thinking it was North American Van Lines Inc., a major national firm headquartered in Fort Wayne, Indiana. Over the phone, the shippers had estimated their move from Columbia, Maryland to Chicago would cost $2,800. But when the movers arrived, the couple was told to pay up in cash -- or the movers wouldn’t unload the truck. According to the Washington Post, the Spieths reportedly still haven’t gotten their money back, but they have hired a lawyer.

Clearly, unexpected costs are a major trauma. Late deliveries are another. In the Bekins case profiled on “Dateline,” Dalaskey acknowledges the van lines would have been late in delivering Glossa’s household goods -- summer moves are especially difficult because of increased volume. But the company does have programs in place to minimize delays and evaluate its customer service. Dalaskey told Workforce that Bekins actually prepared a two-page response for “Dateline,” but it wasn’t used. Casualties with larger firms are more the exception than the rule, he says. In fact, Bekins claims 99 percent on-time pick up and 98 percent on-time delivery for corporate household goods shipments.

“Moving companies often are the focal point for frustration,” says Alesandra Lanto, senior consultant of New York City-based Personnel Decisions International (PDI), a consulting firm of psychologists who provide needs assessments for individuals and organizations. “They’re a tangible target. It’s safer to get mad at the movers than the people at your own company.”

Avoid disasters by clarifying terms and conditions.
Moving disasters typically cluster around three basic issues: loss or damage, late deliveries, and hidden costs or charges. Ask any relocation expert, and he or she will tell you that even with the best moving company, anything can happen between points A and B.

Suzanne DeBerry, a former relocation manager and currently a technical writer for CIS Inc. in Silver Springs, Maryland, recalls one unfortunate fiasco. One employee’s antiques were loaded on a big van along with a second party’s household goods, which is a typical practice. But the movers did not discover a combustible item that was loaded onto the truck. “It was during the summertime. It gets hot in the vans, and a fire broke out,” she says.

The first owner was able to reclaim the monetary value of his goods, but the value of his antiques is irreplaceable. “The worst time to move is during the summer. That’s when most problems occur,” DeBerry cautions.

Professional movers, according to the AMSA, pick up more than 33 percent of all household goods shipments during the summer months of June, July and August. Relocatees, especially those with families, tend to favor that time of year because it falls in between school semesters. HR managers need to explain the higher risks of summer moves, and also point out that companies are more likely to hire less-experienced temps during those seasons.

To avoid late deliveries, make certain you ask the movers to explain the basis for their projected time and distance. Also inquire about the number of times one’s goods may be loaded and unloaded before reaching the final destination. How will holidays affect scheduled deliveries? What are the contingencies for bad weather?

Don’t feel that you’re being picky for asking many questions about hidden charges. For example, what does it cost to transport your employee’s pet boa constrictor? How does the mover handle valuables and family heirlooms? If major appliances need to be disassembled and reassembled, does that cost extra? And before signing the contract, clarify words in the contract, such as “repair,” and define insurance guidelines for damage. Find out what’s not covered and read the small print.

To avoid hucksters, HR should review the basics. “A reputable company should have a license. But it doesn’t have to be a major van line. Some independent carriers serve national accounts well,” says Harrison. “Do your research. Call the local Better Business Bureau and the AMSA. We aren’t in the business of recommending, but we can give information about the mover. [HR] should network with its peers.”

Lanto also believes HR should encourage relocating employees to get additional private insurance riders. If one’s possessions are higher in value than the mover’s insurance policy coverage, individuals can negotiate to add a rider upfront. “Giving people this kind of information is peanuts. HR should be proactive to ensure the employee remains whole.”

In terms of hidden costs and charges, the best defense is a checklist detailing what’s covered and what’s not.

Ask the right questions.
When an employee is about to move, usually HR either recommends several contracted movers to do the estimate or often selects the cheapest carrier selected by the employee. In either case, the lesson is the same: Be methodical. Ask questions before having your employee sign on the dotted line.

“The biggest contributor to complaints is poor planning,” says Ellie Sullivan, vice president and managing director of consulting services at Norwell, Massachusetts-based Relocation Resources International (RRI). “A ‘be there now’ mentality puts undue pressure on an already tense situation.” If the pitch sounds too good to be true, buyers beware.

The most obvious way to research a company is to ask for references. HR can also seek information from organizations such as Lincoln, Nebraska-based Gallup Organization. For example, Chicago-based Allied Van Lines teamed up with Gallup several years ago to create a survey that would measure customer satisfaction, says Robert J. Martin, vice president of household goods, sales and contract administration. To date, Allied mainlines customer feedback into the company system within 72 hours following delivery. “What that accountability does is shape the profile [of] and for every Allied agent in the system,” he says.

Gallup’s Quality of Service Audit measures performance in relation to specific services, agent functions and how well the booking agent managed the relocation process. It also evaluates agent/system ability to provide post-relocation assistance for improving the likelihood of the customer’s using that company again.

Calibrate employees’ expectations through education.
If there are any recurring themes echoed by relocation experts, they’re about education and early preparation. Says Joan Handstad, director of employment and employee relations at Nashua, New Hampshire-based Southern New Hampshire Medical Center: “I try to really prepare people before they move.” The more they understand, the more aligned their expectations will be to the ups and downs of moving. Good movers call you back. If HR or the relocatee has a question, the service agent should be willing to walk them through the process. “[Unscrupulous movers] can’t give you answers to why they’re estimating or billing the way they are,” Handstad warns.

Relocation problems can be averted through better communication between all parties concerned. “Relationships are the foundation for any smooth working operation,” says Annie Wright, director of education and training at Lexington, Massachusetts-based Savoir Faire Inc., a full-service relocation company specializing in cultural training. Moving companies, she adds, are made up of people who will be responsible for your employees’ possessions. HR must work to maintain contact with the moving company. “Talk to the crews. Don’t rely on the salesperson alone. Develop a relationship with someone high up in the company, and occasionally, talk to the president.” By striving to develop a program that’s realistic, and agrees on conditions and performance criteria, HR can better provide the relocatee with realistic expectations.

Dalaskey says that relocation managers can also assist moving companies by being clear and concise about their current and evolving needs and requirements. At Bekins, the company recommends joint quality/account management meetings on a quarterly basis between the mover and HR manager. “Problems generally surface when communication breaks down,” he says.

In other words, keep it moving.

Workforce, September 1998, Vol. 77, No. 9, pp. 56-62.

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