Energy and fuel price hikes, the Great Resignation, poor service from ocean freight carriers and a war in Europe – take your pick. The international moving industry is weathering a continuous series of crises caused by global economic upheaval. Andrew Bennett looks at how FIDI movers operating across two different continents are coping with the ongoing disruption during this unpredictable time
Very few people – especially those running a business – would pick 2022 as a year to remember fondly. There have been times of disruption in the past, including the
1970s oil crisis and the 2008-09 financial crash, but seldom have there been so many serious crises to cope with simultaneously.
Particular market challenges
At FIDI Affiliate Transpack Packing & Freight Forwarding in Pakistan, staff are dealing with the same severe problems as experienced by other Affiliates around the globe. These have included delays in shipping, increased sea freight transit times because of shortages and higher demand and backlogs at seaports.
Air freight has also increased in price because of increased fuel surcharges, while operations and sales have declined as a result of COVID-19 lockdowns around the world – even though Pakistani markets remained partially operational.
But on top of these challenges, Pakistan has had its own unique issues, as Tabinda Naseer Usman, Director of Operations, explains: ‘Pakistan, like any other country, was not well prepared to face these crises back to back. We have also had to deal with the natural calamity of floods this year and some parts of the country regrettably did not follow proper protocols during COVID-19,’ she said.
‘The crisis may have slowed down, but full recovery will take its time.’
Along with movers in other markets, Transpack has found adapting to higher costs and overheads to be a ‘major issue,’ while ‘the weakening of the Pakistan rupee (PKR) against the US dollar makes doing business more challenging’.
Germany, Europe’s largest economy, is one of the countries to have been hit by an energy crisis.
The government has introduced several measures to save energy including stating that offices may only be heated to 19ºC and outdoor lighting in shops and companies must be switched off in the evenings and at night. Meanwhile, German householders are only allowed to shower in warm – rather than hot – water at night.
Meanwhile, international moving companies are facing high energy bills to heat their business premises and the greater cost of fuelling their trucks.
Turning off the taps
At Andreas Christ international movers in Wiesbaden, Sales Manager and Deputy Branch Manager Rolf Schäfer says: ‘The fact that Russia turned off the gas tap came as a surprise to everyone, and the government, the industry and the population must get used to this situation.
‘Everybody is working intensively on solutions, For instance, three nuclear power plants in Germany will remain in operation for half a year longer than planned and alternative possibilities to have liquid gas delivered are being looked into, and so on. Maybe not in the next six months, but in the next 12 months, I think everything will return to normal.’
He added: ‘I also think that the situation does already – and continues to – force us to always consider sustainability and think “green”; it hopefully will be by default that we think about saving energy.’
Facing even more extreme conditions are movers in Ukraine. Some have managed to resume operations despite the humanitarian and other impacts of the conflict and the drop off in international shipments. Most expats left the country before or quickly after the outbreak of the war on 24 February.
In addition to the human impact caused by the conflict with Russia, occupying forces have been destroying electric power stations in Ukraine, which has heightened the crisis.
Marina Chornokozha, General Manager at Interdean International Relocation Ukraine, says: ‘In the 10 days from 10 October, 30 per cent of Ukrainian electric power stations were bombed and partially destroyed. It meant electricity in all Ukrainian regions had to be turned off for some parts of the day.
‘Our government has introduced an energy-saving scheme for Kyiv as well as for other Ukrainian regions; there will be no electricity in different districts in Kyiv in turn, according to the schedule, for four hours every day. It will affect when we can be in the office, and we will have to plan carerully work that requires the use of electric appliances.’
Exodus of expats
Moving company employees – and other Ukrainians – faced the ‘very high’ risk of capture by Russian troops when they were near Kyiv at the start of the conflict and Interdean closed its office until 1 May.
‘When we resumed our operations, we started to perform moves almost normally – with the exception that neither air nor sea transportations were possible from Ukraine,’ says Chornokozha.
‘Now, we have found possibilities to send our sea shipments through Constanta in Romania and our air shipments through Warsaw airport in Poland.’
Since the invasion, Interdean in Ukraine has only had one import shipment, with no requests for others since.
‘We were extremely busy during summer, along with all moving companies who continued working in Ukraine. Most foreigners had left Ukraine before or quickly after 24 February and wanted to export their personal effects from Ukraine once it became possible. Current prospects are extremely unclear. Most likely, there will be fewer exports and almost no import shipments until the war is over, and no-one can tell when that will happen.’
Interdean has been forced to re-orientate its business for the near future mainly around serving the local market with local and office moves. It also offers storage and handles shipments other than those of personal effects.
At Fermont International Movers in Frankfurt, CEO Susie Freifrau von Verschuer, is another moving company executive battling to recruit enough staff, while working hard to retain existing loyal employees.
‘Trying to get people on board to do the job is really difficult, she says. ‘(Finding) staff in general, for the office and in the moving crews is hard, because a lot of school kids think they need to go to university after school to make a higher salary. Of course, it’s not the best paid job (in moving), but it’s a good job and a secure one.’
According to Von Verschuer, employees can struggle to pay their domestic energy bills as these have increased so much. A cost-of-living crisis, where people’s bills exceed their income, has also meant regular grocery shopping trips can be double the price of those just a few months ago – and Germany is far from the only country affected.
Fermont goes to lengths to help its staff by offering training and looking after their wellbeing. One example is by funding most of the travel pass cost for employees who live in the greater Frankfurt area. This means they only have to pay €20 per month to use trams and buses to travel to work in a ‘green’ way.
Recruiting truck drivers is particularly difficult, despite a bespoke apprenticeship programme with a training programme that takes three years. If Fermont takes on a driver and decides to sponsor their full training, it costs around €20,000 to get a full licence.
‘And then it takes about seven months until the driver is finished, fully registered and good to go,’ says Von Verschuer.
In common with other movers, she also detects a decline in the general ‘work ethic’ in the overall German workforce, including recruits who might wish to join moving companies. Although there are still loyal employees, there is a big emphasis is on achieving a ‘work/life balance’ especially among younger generations.
Putting life ahead of work
At Grospiron International, which has its headquarters in Paris, President Jean-Luc Haddad observes the same trend.
As well as dealing with pressures, including the increase in ocean freight prices and shortage of shipping containers, Haddad mentions finding suitable labour as among the top five challenges facing his international operation.
In the overall labour market, ‘employees now would prefer to put their life ahead (of a career), as work is no longer the top priority’.
He says one solution could be: ‘Promote drivers’ jobs among unemployed people or to attract people from abroad, including people from eastern Europe… another is to raise the salary. But if you raise a salary, you have to raise the price (to clients).’
Over at John Mason International, based in Liverpool in the UK, the challenges are just as severe, if not more so.
Director Simon Hood says: ‘Those working in the industry have been under pressure for the past two years dealing with the significant problems caused by shipping issues and our crews have not had a winter downtime for almost three years.
‘They are now going to be under pressure financially, so to keep good staff, businesses need to support them as best they can. We review salaries annually and have just given a cost-of-living payment to try to help. This year, we have also introduced a profit share scheme.’
For businesses in the UK, the crash of the pound (GBP) in the autumn has had a significant impact.
‘Freight rates are predominantly charged in US dollars,’ said Hood. ‘At this time, sterling is extremely weak against the US dollar, therefore, this has had an adverse effect on our freight rates. We have tried to manage it as much as we can to ensure stability in the freight rates, but the recent collapse saw them increase.’
The Amazon effect
Hood urges other movers to be clear with their customers about the impact that delays at ports and other factors will have on their transit times to ‘reduce complaints further down the line’.
‘As we all know, the cost of shipping has soared and we are starting to see a significant impact on the volumes that consumers are moving.
Customers are trying to save as much money as possible, but the only issue is that service expectations remain high. I refer to it as the “Amazon effect”.
‘Consumers are now used to ordering something online and it arrive later in the day or the next day. This has built a very high expectation level for those sending items.’
A new world is coming
If there ever was a ‘golden age of moving’ when things were less pressured, at least one moving company CEO believes that time has long gone.
Jean-Luc Haddad – whose company has operations in the Middle East, Asia and across France – has remodelled part of Grospiron’s business around advisory services.
‘The number of moves is decreasing,’ said Haddad. ‘That’s why we have developed as a service company, with our relocation company, and now we provide DSP along with immigration, compensation and benefit, and many other services.’
What about the future for international movers? Haddad sees the industry as going through a significant transition.
‘The old world will never come back. There is a new world coming and we know it will be more digital; it will be more about sustainability, there will be more diversity… many things are changing,’ he says.
More consolidation in the industry will mean fewer movers in future, and with demands – including being more sustainable – ‘access to this industry (for new players) will become more and more difficult.’