Much has changed in the moving and shipping industry in the last two years. Moving plans may have been put on hold, ecommerce boomed, and more people were shipping items to loved ones across the country instead of visiting.
As pandemic restrictions lift around the world and people resume their pre-pandemic normal behaviors, the effects of these changes will be felt in many industries, including the moving and shipping industry.
Below we share TSI CEO Chris Smith’s expert insights into what changes to expect in the moving and shipping industry in 2022 and beyond. Keep reading for his thoughts on what to expect for consolidated freight and commercial shipping, as well as moving services.
Consolidated Freight and Commercial Shipping
“TSI has no plans to raise their prices but will need to be reactive to the overall market.”
Though TSI has no immediate plans to increase moving and shipping prices, two things will majorly impact prices in 2022:
- Gas and Oil Prices: US gas prices were already elevated, mainly because consumption has dramatically increased due to the ending of COVID restrictions and people going back to work and back to travel. To make matters worse, many US oil producers stayed on the sidelines or were very slow to bring production back after the collapse of oil prices at the beginning of COVID. Finally, there is the ongoing Russian/Ukrainian war. Russia owns approximately 10% of the world’s oil supply and the US has stopped all imports of Russian oil. These three factors point to significant increases in gas prices, and since gas prices are a large component of shipping costs, this will certainly be a factor throughout 2022.
- Supply Chain Issues: While most of the news has been focused on the Port of Los Angeles and the ships waiting to be offloaded, the bigger impact to the shipping/freight industry is all the trucks that are tied up in trying to move the cargo once it has been offloaded. With reduced driver availability (the result of a national shortage) and large amounts of demand for movement of goods out of the ports, capacity for the general movement of goods is constrained. This will naturally impact prices.
Moving capacity for household goods was greatly constrained in 2021 and is likely to see similar constraints in 2022.
The nature of the moving industry is that full time employees and truck assets are typically fixed during the winter months. Moving season starts in May and runs through September, so during a typical year, moving companies (most tend to be local companies or franchises) will rent trucks and hire seasonal workers (think teachers or college students) to complement their full time/ year-round employees.
In 2021, there were very few truck rentals available because of supply chain issues, so most companies did not add more than a truck or two when they might have normally added 5-7. Additionally, staffing was a huge challenge as you had staff out sick with COVID and staff that didn’t want to return because of fear of getting COVID.
On top of these challenges, the Great Resignation and remote work phenomenon caused very new and different people migrations. In 2021, Americans living on the West Coast migrated East in great numbers—so much so that in the months of July and August of 2021, there was actually no way to move out of California—all movers were booked up, all Penske and U-Haul trucks were sold out, and all PODS and PACK RAT container services were sold out. These migration changes not only had an impact on capacity and the ability to move, but they also played heavily into the pricing of moving services.
In 2022, we are seeing some aspects come back to normal and some stay the same, with some companies reporting a 7-to-1 ratio of people moving away from the West Coast to people moving to the West Coast over the last 6 months. That has major price implications. We are seeing pricing from the West Coast on a number of different services be 50% more expensive than moving to the West Coast.
Supply chains are coming back to normal somewhat and that should help with the mover truck rental market this summer, and staffing seems to be improving as well. So while the people migrations and increased gas prices might still keep some costs elevated, truck rental and staffing should favor some stabilization of prices.
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