S P E C I A L F E ATURE INDUSTRY CONSULTANT MARK OAKESHOTT are actually starting to see movers acting a bit more sensibly by increasing their prices quite significantly to be able to pass on the extra cost, says Blandy. I do see prices going up. But the question is how much those prices are going up just passing on additional cost versus actually trying to get additional margins. Prices have obviously been going up because of the freight crisis that has happened but also now because of everything else. This includes growing energy bills, and more expensive packing materials and labour costs, adding more pressures in 2022. Other trends the Santa Fe CEO sees is digitisation, and some of the moving workforce especially in North America and Europe leaving the industry for better paying jobs in other professions. At Santa Fe, digitisation remains a key driver of change. The business is investing more and more in technology, on the one hand, to have a better customer experience, but on the other, also to have more efficient processes at the back end. That also remains something that were very focused on. THIN MARGINS EQUALS TROUBLE Like other experienced industry observers, FIDI Secretary General Jesse van Sas believes there will be more merger and acquisition activity driven by an economic downturn. I assume our industry will follow the same pattern as the global economy, in which a recession and I think everyone agrees we are moving towards a recession now will lead to people wanting to sell out. Credit will be tighter, leading to higher costs and anyone with thin margins will get into trouble, he says. This is where merger and acquisition (M&A) becomes attractive, to combine revenues and market share and reduce overhead spending. A recession will be a catalyst for M&As. He adds: The same would count for the relocation industry, and in particular the moving industry, where the last tranche of the Boomer generation begins to exit the workforce. Companies will want to leverage volume for lower costs, especially at times like these with heavy inflation and rising resource costs. For the RMC portion, the merger of SIRVA and BGRS will lead to more of those M&As, particularly for the smaller boutique companies. ADAPT QUICKLY TO SURVIVE The smarter strategy may be to stay closer to their core competency in combining relocation and immigration with moving Steve Jordan, editor of The Mover magazine, sees more disruption ahead for the moving industry. Although movers have proved resilient for many decades, he believes they need to adapt their businesses faster to follow technology trends. One particular additional challenge for movers is in planning succession for their companies, with many company founders and senior executives of family firms now at a mature age. The direction of travel is that the world is a smaller place, says Jordan. People have greater opportunities... and more distractions than before. One hundred years ago, if your father ran a moving company, you would most likely join it too. Now, the 24 FF307 September-November 22 pp20-25 Special feature_mergers and acquisitions.indd 24 passing down through the generations is diminishing... there may be little choice but to sell (the business) on to a big company. If family moving companies can continue as a family business and are happy operating it, then those companies will continue to survive. The great need for compliance and the introduction of digital inventories for consignments will drive further change in the industry. And Jordan believes smaller players may need to partner with bigger operators to succeed or even to survive. The industry does adapt and will have to adapt again... (but) they will have to do it quicker. Jordan believes movers may underestimate the impact that a tide of new technology will have on their businesses and may look too short term. People are increasingly doing most things that need to be done through an app. I have asked the question at industry conferences for years and always get the same answer people will always need their hands holding and moving is a people business. (The moving companies believe) the relocation function will always be required. Nowadays, most young people do most things on a mobile phone using 2020 technology and 2020 mindsets. In another two generations, computer technology will be 1,000 times more powerful and WW W. F I D I FOC U S . OR G 06/09/2022 12:38