The COVID-19 outbreak will present the moving industry with momentous challenges that must be faced by traditional movers and large RMCs alike. Jesse van Sas, Secretary General of FIDI, outlines why the industry – and FIDI itself – is about to change for good
I certainly do not claim to have any wisdom on what will happen in our business, or any business, in the near and distant future, with COVID-19 redefining our lives completely. I don’t think anybody can correctly assess the extent of change as of yet.
People – and FIDI Affiliates are no different – are genuinely concerned, and perhaps even terrified of the consequences. Whatever we thought in December was going to happen in 2020 is no longer going to happen. COVID-19 has not only reshuffled the cards, it has actually thrown the whole deck up in the air. All our earlier expectations and securities for 2020 have been shaken to the core. A terrifying prospect indeed.
But it dawned on me that, at the same time, all the insecurities and concerns we had at the end of last year have probably paled as well. The concern that many movers had over their competitors being ahead of them in business, having the newest equipment or even technology, well, those concerns still exist, but might no longer be as prominent. Every business has to deal with this new global concern now. And every business owner is scratching his or her head about how to handle such a pandemic.
Let’s be fair, our business sector was not in the best of shape to start with. Undercapitalised, thinning margins, long payment terms, squeezed between RMCs and corporate customers as a mere supply chain, or even worse as ‘downliners’. On top of that, add a COVID-19 pandemic, and you know there will be victims, because this business is short of cash. It is the result of years of hunting for revenue, with little to no attention to the bottom line. I hope that this crisis will inspire move entrepreneurs to take a different view, to promote a real change in their business model, to refocus on profit combined with real quality. In a recent LinkedIn post, I read that even venture capitalist start-up companies should stop spending ridiculous amounts of cash, and focus on being lean, profitable and sustainable. If that is true for a start-up, then it seems obvious that this should be even more applicable to established operational moving and relocation companies. In other words (and I know it sounds like a cliché), assuming your business survives this crisis in the next few months, this is the opportunity to make changes and ensure your business survives in the long run.
I hate to use the well-worn word ‘unprecedented’, but it is true that we have never seen this sort of crisis before. We are all learning as we deal with the situation, but one thing we all know very well: when we resume business, it will not be like before. Our industry will change – in fact, it is changing already. Not only because of the pandemic, but also because of the Global Household Goods Contract for US military now going to one sole supplier (a consortium). It will shake up the US movers, but the effect will be felt worldwide.
Our customer base will change. The trend to move to shorter assignments may be challenged by the immigration legislation now that the lawmakers have seen the effects of unlimited business travel during a pandemic. The long-term effects of COVID-19 may result in large corporate customers or RMCs moving towards a broader and local supply chain, to mitigate the risks of working with a limited pool of providers in such crisis times. How about the expats themselves? When will they be ready to hop on a plane again, along with family and heirlooms, to take up a next assignment abroad?
There are many challenges ahead of us, but we can do this. We can make the change. It will require us to be optimistic and to rewrite our destiny.
FIDI will do so, as well. The earlier signs to rethink our membership structure, to include different business models in our membership, to open up the federation towards a leading global association in moving and relocation, all of that will now be accelerated. We owe it to our 70-year-old organisation, to our founding fathers, to our core members, and to the industry.