In what is typically the busiest time of the year for movers, many Connecticut moving companies are struggling to stay in the black. The slow housing market continues to hurt movers who rely heavily on residential moves, forcing some out of business and others to look for ways to diversify to remain afloat.
“When I started here years ago, all we did was household and business relocation,” said Mark Gagnon, president of Capitol Moving and Storage of Hartford. “We’ve diversified since then, fortunately, and that’s one of the reasons we’re still standing.”
These days, Capitol Moving and Storage’s business is about two-thirds household goods and one-third office moving, trade shows, electronics and international business.
Mike Riley, president of the Motor Transport Association of Connecticut, said it’s risky to rely on the unsteady real estate market, which saw a 49 percent slide in sales in Greater Hartford in July.
“When people don’t move, movers don’t move,” Riley said. “The movers that are hanging in there are providing storage, or diversified into local distribution or some other businesses.”
According to The Warren Group, which tracks real estate data, home sales increased more than 16 percent in Hartford County in June, thanks in part to the federal home buyer tax credit.
“We felt it — we responded to that real quick,” said Norman Bolduc, owner of Kay’s Trucking of East Hartford and South Windsor and president of the Connecticut Movers and Warehouseman’s Association. “We thought (because of June) maybe this year will be something of a better year, but right after the fourth of July, it softened.”
The American Moving and Storage Association, which keeps statistics on the moving industry, reports that moves are on the increase so far in 2010. From January to June, there were 2,222 inbound moves in Connecticut, and 3,889 outbound moves from Connecticut. That compares to just 1,866 inbound and 3,374 outbound for the same period last year, a huge drop from the 2,469 inbound moves and 4,126 outbound moves in the first half of 2008.
While spurts and slowdowns in the moving business are typical, summer is usually the busiest time of the year, and many companies have come to expect that.
“The winter is a very difficult time for movers,” Bolduc said. “It’s a time when movers try to survive until the following summer, where they hope to build up a little bit of reserve for the next winter. When will the housing market revive? We don’t know — everyone’s crystal ball is clouded. We no longer can say at the end of June or the end of August that we’ll be refusing work.”
The economic downturn has put several local moving companies out of business in the past few years. Longtime businesses such as Amodio Moving and Storage in New Britain and Barrio Moving and Storage of Hartford, have folded.
While fewer people are moving, there are other factors involved in the crunch being put on moving businesses. There is an increase in people willing to rent their own trucks to reduce their moving costs, as well as an uptick in the use of moveable storage units, such as PODS.
“With people stretching their dollar, people are finding they haven’t got the money to stretch into hiring a professional mover,” said Bolduc.
Large corporations are also reducing employee allowances for moves. Whereas the bigger companies once arranged for generous cross-country moves of executives and managers, some companies are handling it a different way.
“A lot of companies are now offering lump sums: ‘Mr. Employee, here’s $5,000. See you in San Diego next week,’ ” Gagnon said. “With unemployment hovering around 10 percent, it allows some companies to be stingy about the relocation allowance.”
Commercial moves are also way down, as large corporations have chosen not to take on the expense of moving entire operations within their companies. In the past, moving companies thrived on the installation of new CEOs at large corporations, which typically resulted in many, large-scale moves as new staff moved in.
In addition, so-called rogue movers are threatening the legitimate moving companies’ bottom line. Offering ridiculously low prices — sometimes half the cost of what the mainstream companies are quoting — the companies are luring in those customers who will do anything in this economy to save a few dollars. Riley said the rogue companies often hold the goods ransom, claiming the customer had more goods than they expected, and the price balloons.
“It costs money to move,” Riley said. “People think that the bids from reputable movers are way high compared to some of these other guys, and in the end, they really end up getting screwed.”
At Capitol Moving and Storage, Gagnon said they’re going to continue to do what they can to weather the slowdown and meet customers’ needs.
“We do the job right the first time,” he said. “We present ourselves as professionals and we follow through so our clients know that they can give us these moves on a moment’s notice and we can respond.”
While it’s anyone’s guess what will happen with the moving industry in this unstable economy, Gagnon said he expects there to be a continued shakeout.
“I think what will happen is there will be some further contraction,” he said. “Those left standing will handle it and then grow when the economy bounces back.”
