Why FIDI companies must diversify… or die

As headlines go, ‘Diversify or die’ may be overly dramatic, but the reality is that staying still in a fast-changing industry such as moving is incredibly risky. While I can almost hear you saying ‘but, Rob, our company offers household goods and personal effects moving’ (much like someone proudly claiming to enjoy country and western), it’s time to think even broader.

The household goods (HHG) moving industry is undergoing significant changes, driven by shifting customer preferences, economic pressures and sustainability concerns. For FIDI-affiliated international moving companies, these changes present challenges and opportunities.

The traditional model of focusing solely on HHG moving is no longer sufficient for sustainable growth. To remain competitive and thrive, moving companies must diversify their offerings – and into destination services (DSP) in particular.

The fall in HHG shipments
Several factors have contributed to a steady decrease in HHG shipment volumes:

1. Changing corporate policies: many corporations now provide lump-sum relocation packages, leaving employees to manage their own moves – and often opting for smaller shipments.
2. Generational shifts: younger transferees tend to move fewer items, preferring to transport personal effects and purchase furniture locally at their destination.
3. Budget constraints: corporate accounts face tighter budgets, reducing allowances for comprehensive moving services.
4. Sustainability: growing concern about the carbon footprint associated with shipping has led to reduced reliance on large-scale HHG moves.
5. Economic uncertainty: global economic challenges have pressured companies to cut costs, which has impacted on relocation budgets.

Given these trends, it’s imperative that FIDI companies explore diversification so they can remain relevant and competitive.

Why diversification is key
For moving companies, diversification isn’t just a survival tactic, it’s an opportunity to grow and expand their scope of services. Offering DSP, which includes relocation support at both origin and destination, can complement HHG moving and provide additional revenue streams. Further potential areas for diversification include: visa and immigration; pet transport; fine art logistics; and long-term and flexible storage solutions.

By diversifying, companies can:

1. Attract new clients: broader service offerings appeal to a wider range of customers.
2. Enhance their value proposition: integrated services provide a seamless relocation experience, differentiating companies from competitors.
3. Mitigate risks: reducing dependency on HHG shipments helps buffer against market fluctuations.

Our structured approach to DSP expansion
Paramount Transportation Systems (PTS) recognised the need for diversification early and began offering DSP services four years ago. This decision was implemented with a structured and deliberate strategy, as follows:

1. A customer-centric focus: We ensured our existing clients, including relocation management companies (RMCs), were fully informed about our expanded capabilities. Crucially, we reassured our RMC clients that PTS would not encroach on their core services, such as home purchase/sale and expense management.
2. Controlled growth: By scaling DSP services incrementally, we maintained quality and built a reputation for excellence.
3. Investment in technology and training: We leveraged advanced technology to streamline our service delivery and invested heavily in training staff to ensure they had the skills to meet clients’ expectations. The approach strengthened our relationships with existing clients, but also opened doors to new opportunities, helping us to achieve sustainable growth.

The approach strengthened our relationships with existing clients, but also opened doors to new opportunities, helping us to achieve sustainable growth.

The importance of technology and training
Successful diversification into DSP requires a commitment to excellence. Two critical areas for investment are technology and training:

• Technology: robust digital platforms are essential for managing complex relocation processes and delivering real-time updates to clients. Technology differentiates companies in a competitive market by improving efficiency and enhancing the customer experience.
• Training: skilled and customer-focused employees are the backbone of any successful DSP operation. Training programmes, such as the new FIDI DSP seminar, equip employees with the knowledge and skills to deliver high-quality services. Participation in these programmes also helps companies build lasting connections within the global relocation industry.

I vividly remember attending FIDI’s Advanced Management training course in Amsterdam in 1999, while I was working in Hong Kong. My company’s decision to invest in me by sending me to this four-day course was life-changing.

Why DSP training is a must
For those considering diversification into DSP, sending representatives to FIDI’s DSP training is a game-changer. Yes, it is rigorous, but it’s also a lot of fun – and I’m not just saying this because I’m the lead trainer.

Participants work hard, elevate their understanding of the DSP industry, and forge lifelong friendships with peers from around the globe. These bonds and shared experiences are what make our industry so unique and rewarding.

Speaking of fun, let me share a story from our inaugural DSP training in Milan. After a full day of sessions and a late dinner, we decided to take a night-time stroll – even though it was absolutely freezing. Despite the chill, these moments of shared laughter and camaraderie are what make the training experience unforgettable.

Employers who invest in this training send a powerful message to their employees: ‘We value you and your potential.’ It’s no secret that people stay with companies where they feel appreciated and heard. By enrolling high-potential leaders in DSP training, companies can cultivate loyalty, develop future management, and ensure their teams are equipped to deliver exceptional service.

How to embrace the change
The question for FIDI moving companies isn’t whether to diversify, but how to do so effectively. Here are some key tips:

• Assess market opportunities: identify complementary services that align with your company’s strengths and market demands.
• Develop a strategic plan: approach diversification systematically, ensuring you have the resources and expertise needed to succeed.
• Invest in people: enrol high-potential employees in programmes such as FIDI’s DSP training, to enhance their skills and prepare them for leadership roles.
• Leverage partnerships: collaborate with RMCs and other stakeholders to integrate services and create a seamless client experience.

As the industry evolves, diversification will be essential for growth and longevity. By expanding into DSP and investing in technology and training, FIDI companies can secure their place as leaders in the global relocation market. The time to act is now.