Moving companies hurt by housing market, fuel costs

Jun 11, 2008 (Omaha World-Herald - McClatchy-Tribune Information Services via COMTEX) -- UNVL | Quote | Chart | News | PowerRating -- Moving companies have been hit with a double whammy: the housing slowdown and high fuel costs.

"Real estate isn't selling as it should," said J.R. Smith, vice president of Benson Transfer United Van Lines in Omaha. "We just haven't hired any new people."

Normally, Benson Transfer would hire up to 25 high school and college students as temporary workers for the summer. At least the company has not been forced to lay off any of its 40 full-time employees, Smith said.

The cost of diesel fuel has cut into Benson Transfer's profits, although the company tries to recoup some of those expenses with fuel surcharges that, depending on the destination, are regulated by the State of Nebraska or the federal government, Smith said.

"Our cost per mile has increased substantially. We are trying to pass some of it on, but we can't pass all of it on," Smith said.

Brad Woodle of Jim's Moving and Delivery Co. Inc. in Papillion said business and revenues have been down about 40 percent from levels hit in 2003-2005. The pace began slowing in 2006, Woodle said, and 2007 was dismal.

"Last year was probably the slowest I've seen in 15 years," he said.

This year, business has improved but it is not what it should be, Woodle said. May through August generally are the busiest months for movers, he said.

"We'll know more by the end of summer," he said.

At the same time, rising diesel fuel prices are hurting profits and moving companies are reluctant to raise rates because they want to remain competitive in a tight market, Woodle said. His company has cut its work force from 14 or 15 people to nine or 10, Woodle said.

To keep busy, some moving companies have branched into helping people transport items to storage facilities and acting only as labor for people trying to save money by renting their own trucks.

Even with those changes, said Jeannie Murphy Matthews of Murphy Moving Inc. in Omaha, her three trucks have been unusually idle during stretches of spring days this year.

"They sit and cost me money," Matthews said. While employees are paid by the job, insurance and parking costs are constant, Matthews said.

Matthews said she even worries about people siphoning diesel fuel for their own use from her trucks' large gas tanks.

Tips have dropped dramatically, too, and some of the better workers in the moving industry have left to get office jobs that pay a more reliable 40 hours a week, Matthews said.

But Murphy Moving, founded in 1959, has weathered past slowdowns in the economy and it will weather this one, Matthews said.

One bright spot has been Murphy Moving's business called One Man and a Dolly, which allows homeowners to hire the level of labor they need and rent their own truck, Matthews said.

"A lot of people are using that," Matthews said. "People are being exceptionally tightfisted and careful with their money."

Craig Kirchmann, general manager of the Omaha franchise of Two Men and a Truck, said the moving business has been slow, but his firm has adjusted by moving furniture and other goods into storage units.

A large number of people wanting to build a new home have been saving money by waiting until they sell their old house. Meanwhile, they store many items and live temporarily in apartments or with in-laws, Kirchmann said.

"People are having to pay twice to move, but it is not close to paying a double mortgage," Kirchmann said.

In another bid to save money, people have been packing and transporting smaller items and hiring outside help only to move the largest and most valuable pieces of furniture, Kirchmann said.

In addition, customers are breaking down large items like beds and removing mirrors from desks, which makes a moving company's job faster and less expensive, Kirchmann said.

The housing market in Omaha is stronger than in some parts of the country such as California and Florida, however, and it has improved since it was hit hard last year, Kirchmann said.

The decision to move isn't ruled entirely by the strength of the housing market, he said. Job relocations and other needs often take precedence.

"It's not an economic factor, it's a situational factor," Kirchmann said.

--Contact the writer: 444-1117, joe.ruff@owh.com

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