Moving Industry Prepares to Meet Challenges of Driver Shortage, Military Outsourcing

This story appears in the March 19 print edition of Transport Topics. Click here to subscribe today.

The moving industry faces a critical shortage of drivers, and officials at the American Moving & Storage Association said they are preparing a program to do something about it.

A spokesman for the trade association said the group is working to develop a recruiting and training program with trailer manufacturer Kentucky Trailer in Louisville, Ky., and local workforce development agencies.

John Bisney, director of public affairs for AMSA, Alexandria, Va., said the association also will offer a series of seminars and tools to help member firms address the driver shortage.

Household goods carriers handle about 800,000 moves annually for individuals, corporations and the military. The industry is made up of 8,100 companies, half of which employ fewer than five people.

Bisney said industry officials are concerned about the loss of capacity from companies that went out of business or downsized during the recession. A shortage of drivers could make it difficult for movers to meet peak shipping demands during the summer months.

Van lines also find themselves increasingly competing with truckload and other freight carriers for what is seen as a shrinking pool of qualified truck drivers, Bisney said.

The driver recruiting and training initiatives were announced at AMSA’s 2012 Education Conference and Expo in Las Vegas in mid-February.

Also at the meeting, AMSA’s government affairs committee agreed to consider taking a policy position on using shipping containers to transport household goods. At issue is whether such operations should be subject to the same federal regulations that apply to household goods movers, Bisney said.

Another topic of concern for AMSA is a Department of Defense proposal to outsource management of household goods transportation.

Scott Michael, vice president of military affairs for AMSA, said a study commissioned by DOD is currently looking at three alternatives: keeping the status quo, contracting out management and full outsourcing of household goods transportation services for military personnel.

The study is being conducted by LMI Government Consulting, McLean, Va., and is expected to be completed by the end of March, Michael said.

The military accounts for nearly one of four moves each year in the United States.

Michael said the current Defense Personal Property Program has been in place for just a year and is the culmination of years of discussions between DOD and movers about how to handle household goods shipments for members of the armed services.

“We’re looking for stability,” Michael said. “A lot of movers are not going to make an investment in capacity not knowing where the program is going.”

A similar program to outsource transportation of freight — the Defense Transportation Coordination Initiative — has been in place since 2007 and is generally considered a success in terms of saving money on transportation costs.

An analysis by DOD of freight shipped from March 2008 to November 2010 found a savings of $182.5 million, or 30.1% compared with a baseline cost for freight shipments during 2006 and 2007 (2-21-11, p. 1).

Lisa Roberts, deputy assistant secretary of defense for transportation policy, has said in the past that DOD would consider expanding DTCI to include other types of freight and possibly other federal agencies after the current DTCI contract expires in 2014.

“The DOD is not looking to expand Defense Transportation Coordination Initiative to include household goods movements,” said Defense Department spokeswoman Lt. Col. Melinda Morgan, when asked to comment on the study.

“We are completing a household goods business case analysis to determine whether the department can achieve value from contracting with a third-party logistics provider to manage all or part of the department’s household goods program,” Morgan said.

DOD spends $2.2 billion annually for about 600,000 inbound and outbound personal property moves, she said.

“It is important for the department, as good stewards of taxpayer dollars, to ensure best value and to continually look for improvements,” Morgan said.

Some improvements implemented in recent years include a new personal property information technology system, use of customer satisfaction surveys to determine business awards and consolidation of shipping offices.

“The changes have resulted in savings and/or better customer service for the department,” Morgan said in an e-mail to Transport Topics. “We anticipate additional savings as we continue to implement further improvements to the program.”

Michael said a DTCI-like program for household goods is unlikely to produce significant additional savings in transportation costs because the current personal property program has already “driven down” revenue for carriers that participate in the program.

“If DOD shifts manpower to contractors there could be savings if they find people to work for less,” Michael said. “They are less likely to get more savings from transportation.”

Michael said he believes that most of the savings from the DTCI program are from “cost avoidance” rather than actual reductions in freight rates.