Question regarding estimates

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East Coast Mover
Posts: 13
Joined: Wed Jul 27, 2005 11:00 pm
Location: Broward County, Florida

Question regarding estimates

Postby East Coast Mover » Wed Aug 03, 2005 11:16 pm

I'm looking for advice regarding two in-house estimates I received this week for my move from South Florida to Massachusetts.

* The first was a Binding estimate, 3200#s, $2,600

* The second was a Binding/Not to Exceed estimate, 4000#, $3,000.

Both estimates include FVP insurance ($500 deductible) and mattress cartons.

Now this question might sound stupid, but is a binding contract REALLY binding? I ask this because if the first moving rep. estimated 3200#s and its actually closer to the second estimate of 4000#s, are they required to adhere to the contract at 3200#s? Would (or could) the driver give me a hassle on moving day? The big difference in weights is making me a little nervous, like I'm being "low-balled" on the first estimate even though its Binding.

Let me know what you think. All responses are appreciated.

Thanks.

Mike

Diane
Posts: 15824
Joined: Tue Oct 07, 2003 12:18 am
Location: Los Angeles

Re: Question regarding estimates

Postby Diane » Thu Aug 04, 2005 6:45 pm

Hi, Mike - a lot of people ask this question and the answer is that one moverpro posting here (Michael) said that in all his years in the industry, he could count on the fingers of one hand the number of times that a driver protested the weight on moving day, and in only a couple of those cases was the driver successful. So I think you're very safe.

Your estimates are actually fairly close. If you want to feel more secure, ask the first company to give you a quote on 4000 pounds and then you'll know what the worst case would be, pricewise. In my opinion you should make your decision on the basis of how comfortable you felt with each company, overall. If either can self-haul your shipment in its own truck, that would be a big point in its favor.

East Coast Mover
Posts: 13
Joined: Wed Jul 27, 2005 11:00 pm
Location: Broward County, Florida

Re: Question regarding estimates

Postby East Coast Mover » Thu Aug 04, 2005 9:08 pm

Thanks for the tip about getting the first estimate at 4000#s...that will give me a better comparison. If it gets really close to the other estimate (which I expect it will), I'll probably end up going with the second one.

Both company reps. were very knowledgable and professional, but if all else is even (or close to even), I'd prefer to go with the Binding/Not to Exceed estimate.

I'll let you know which company I decide to go with. There doesn't seem to be many South Florida movers with positive feedback on this site, so hopefully I can add one.

Thanks again.

Mike

Michael
Posts: 3255
Joined: Tue Mar 18, 2003 7:55 pm
Location: Charlotte, NC

Re: Question regarding estimates

Postby Michael » Thu Aug 04, 2005 9:09 pm

Mike

Most drivers are looking to see if what you estimated is within 10% of what they think it is. If they think it is, then you should be ok. If they dont, then yes, most drivers will bitch, moan, complain and protest, if their company procedure dictates that they do in order to be paid.

Also, with a binding or a not to exceed, if a shuttle or storage is required at destination, and its not on the estimate as possible destination charges, you can still be charged for those services but not for 30 days after your move.

Look at your inventories. First look at the box count. Your quotes are more then 10% different in weight. In most cases when a customer packs themselves, a surveyor is very tight on his/her box count. In most cases there is a box count difference. If that is apple to apple, check their total cube and multiply that by 7. In both cases, the 3200 pound shipment should be 457.14 cube. And the 4000 pound shipment should show a cube of 571.42. You dont want to trust someone that wants to manipulate the cube factor cause in all likelyhood they will manipulate other things to make themselves look better to get your business.

Let us know,
Michael
************************************

Forget yourself for others and the others will never forget

East Coast Mover
Posts: 13
Joined: Wed Jul 27, 2005 11:00 pm
Location: Broward County, Florida

Re: Question regarding estimates

Postby East Coast Mover » Thu Aug 04, 2005 9:34 pm

Michael,

That's what made me a little nervous with the rather large difference in weight estimates. If I went with the 3200# estimate and the load is actually closer to 4000#s, couldn't that cause an issue with the driver? That's 25% more than what was estimated.

Also, in looking over the estimates, the first estimate doesn't even list the cubic feet. The second estimate does and it comes out to exactly $6.50 per cubic foot.

The more I learn, the more I'm liking the second estimate...

Thanks for the info.

Guest

Re: Question regarding estimates

Postby Guest » Sat Aug 06, 2005 12:35 am

The Household Goods Table of Measurements (cube sheet) was developed by the Department of Defense at the end of WW II as a uniform method of calculating the equipment needs and budget requirements for relocating the troops decommissioned in the U.S. or redeployed throughout Europe and Asia.

During the ‘50s, the number, size, and construction of household items remained fairly consistent. Seven pounds per cubic foot was universally adopted as the standard density factor used to negotiate linehaul transportation costs with the freight companies licensed to move household goods for each of the military services.

Over the years, the construction and durability of normal household items changed dramatically. Most items found in a home fifty years ago were built of solid wood, heavy fabric, copper, steel, reinforced aluminum, glass, stone or ceramics.

An overstuffed chair constructed on a solid mahogany frame, covered by thick cotton wadding, upholstery fabric made of natural materials and topped with a cushion stuffed with horse hair has been replaced by the modern sectional built on a pine or press wood frame, stuffed with cheap foam, thin material and secured with plastic hardware. It weighs half as much the older furniture.

As the economy expanded and family needs changed, the table was amended to include the latest gadgets, gizmos and toys purchased by American consumers. Larger families required bigger trucks, different equipment, and, eventually, higher transportation costs.

The lighter material, poorer construction and larger items, however, have forced the average household goods density factor down to about 5.5– 6.1 lbs. per cubic foot. While this is not true of all households, the majority of Americans have a lot of cheap, disposable stuff that takes up a lot more space.

The density factor, however, has never changed.

The Household Goods Transportation Act (Public Law 96-454), passed by Congress on October 15, 1980, was an attempt by the Federal government to increase competition and reduce regulation of the Household Goods Moving Industry. Within a very short period, an industry with several hundred carriers quickly grew to several thousand. Overnight, consumers considering relocation were faced with many new price and service level options offered by a multitude of unknown service providers.

Under this legislation, the uniform calculations used to determine estimated prices were relaxed or could be manipulated when determining a guaranteed (or binding) estimate price. In this extremely competitive and relatively new environment, astute movers were allowed to adjust the density factor on their Table of Measurements to take into consideration the lighter materials in a household when calculating the estimated transportation weight. Using the tariff provisions filed by most interstate household goods carriers, linehaul and some other accessorial service charges were a function of weight and distance. This change, therefore, affected the pricing usually by lowering the total transportation cost.

For example, using the old 7 lbs. per cube rule, a household with an estimated 1,450 cubic feet of articles according to the cube sheet would weight approximately 10,150 lbs. Change the density factor to 6 lbs and the same 1,450 cu.ft. yields an estimated weight of 8,700 lbs. At 5.5 lbs, the result is 7,975 lbs.

If the hypothetical tariff rate were $45.00 per hundredweight (cwt), a family moving an estimated 10,150 lbs, would have a linehaul transportation cost of $4,565.25. Using the 8,700 lb. estimate, the cost to move the same 1450 cu.ft. of estimated items would be $3,915. At a 5.5 lb. density factor, the price for 7, 975 lbs. drops to $3,588.75 – 21% lower – to move the same number of pieces as the 10,150 lb. estimate. The applicable accessorial charges would also be reduced by the same percentage.

As the use of the binding estimate flourished in the ‘80s, more and more legitimate movers began manipulating the density factor to reflect the size and construction of the items being estimated.

Unfortunately, since the market was much more competitive because of the deregulated environment, some newly licensed companies struggling for more customers used the loopholes in the new legislation to abandon the old Interstate Commerce Commission (ICC) requirement for an estimate based on a cube sheet and filed tariff rates. These unscrupulous entities began offering simple flat price binding estimates. No cube sheet. No density factor. No tariff rates or van line pricing. Just the promise to move everything – all 1,450 cubic feet (or 20 linear feet) – for $1500!

The size of households in the U.S. exploded in the '80s and '90s. Americans jumped from owning a 3 bedroom, 1 ½ bath ranch on small lot into a 4 bedroom, 2 ½ bath two-story w/basement and two car garage on a half acre. Within two years of purchasing their new home, many had rented space in a self storage facility to cope with their excess “stuff”.

The 1,450 cu.ft in the cozy little bungalow quickly turned into 2,000 cu.ft. scattered around the castle. When it came time to move, most people were shocked at the effect that rising inflation, fuel, labor and insurance costs had on their relocation expense.

Lured by the “always on, always open” convenience of a new thing called the “Web” more and more people began using the Internet during he latter part of the ‘90s to try to arrange lower cost with a relocation provider.

Although the dot.com era was short lived, it epitomized the persuasive power of the new technology to satisfy a wide range of public queries. It also piqued the interest of many legitimate and not-so-legitimate entrepreneurs including many unscrupulous and unlicensed household goods carriers, independent movers, agents, move brokers and relocation company wannabees.

With little overhead, few salaries, and minimal equipment expense, these wily entities leveraged their knowledge about the perceived authority and dynamics of the medium to increasingly prey on unsuspecting consumers. By copying the most effective designs and content information from legitimate mover websites, they were able to pay a variety of the most effective internet search engines to weasel their way to the top of a user’s returned sites. Google “moving company” and you will find an overwhelming list of 1.4 million choices online – and there aren’t even any licensed carriers on the first page.

Unfortunately, there was no enforcement effort to fix the problem.

In a March, 2001 consumer protection report entitled "Federal Actions Are Needed to Improve Oversight of the Household Goods Moving Industry", the General Accounting Office (GAO) and Department of Transportation (DOT) acknowledged to Congressional committees that “the majority of the consumer complaints (96%) concerned lost and damaged goods, untimely pickups or deliveries, inaccurate estimates and disputed rates”, and that the “most egregious complaints do not involve agents of major moving companies; most concern small companies that act as independent movers”.

The government then dumped the problem back in the public’s lap by declaring that “the primary responsibility for consumer protection lies with consumers to select a reputable household goods carrier, ensure that they understand the terms and conditions of the contract, and understand and pursue the remedies that are available to them when problems arise.”

Later that year, the American Moving and Storage Association (AMSA) presented convincing arguments to the Subcommittee on Highways and Transit of the Committee on Transportation and Infrastructure calling for increased enforcement against unscrupulous household goods carriers and internet brokers in response to the growing problem. During the testimony, the Association urged Congress to act to authorize additional funds for have the Department of Transportation fulfill its responsibility to uphold the existing law and force the closure of the legal loopholes that fostered abusive practices of internet scam companies and rogue movers.

Nearly two years later, the Federal Motor Carrier Safety Administration, operating under the DOT, acknowledged to the U.S. Senate Committee on Appropriations that they had requested additional funds in the 2004 budget to hire a “limited number of requested resources to supplement the three (emphasis added) full-time commercial investigators devoted to their Household Goods Enforcement and Compliance program”…“to inoculate the public against these predators”.

The government administered their shot to a bent over, waiting public in June, 2003. Entitled “Transportation of Household Goods; Consumer Protection Regulations”, the interim final rule requires that “interstate household goods carriers provide written estimates, have an arbitration program for individual shippers, deliver goods on agreed-upon dates, publish truthful advertisements containing their name and DOT number, and weigh shipments of customers given non-binding cost estimates.”

What the American public really got was consumer protection legislation that is more confusing than it is helpful. Although it addresses many of the industry issues raised by the AMSA, and provides shippers with a longer list of requirements they should expect from legitimate moving companies, it doesn’t offer consumers clear benchmarks or performance standards to access the quality of the thousands of service providers that fall under its scope.

To make things worse, enforcing the new, beefed-up rules is going to be even more difficult. After 9/11, the focus and responsibilities of FMCSA changed by necessity. Although they still have only three full-time headquarters employees who work exclusively on household goods issues, they’ve been forced to reallocate some resources toward improving the security of the transportation of the nation’s hazardous materials. Visitors to the section of their website entitled “What Happens When You Move?“ are politely advised that “consumer-related issues cannot be our primary focus, we are doing what is practicable given the agency's finite resources”.

So… how can consumers reduce their risk and obtain satisfaction if - and when - they decide to relinquish their budget, all of their worldly possessions, and their trust to a relocation provider?

In November, 1999, the International Organization for Standardization released their newest version of their international quality management system - ISO 9001:2000 - for use in organizations who do “design, development, installation and servicing” of their product. The focus of the new standard was to address how to meet customer needs more effectively.

This ISO version had more appeal to the moving industry than the 1994 standard because it focused on internal processes and customer satisfaction rather than technical specifications and procedures. Expectations of continuous process improvement and tracking customer satisfaction were more explicit in this revision. Because of its structure, the new standard placed greater emphasis on customer focus, quality planning, process measurement, continuous improvement cycles, quality goals and objectives, and total participation within each organization.

To be certified to the ISO 9001: 2000 standard, participating companies were required to:

1. Identify the goals they wanted to achieve
2. Identify what others expect of them
3. Obtain information about the ISO 9000 family
4. Apply the ISO 9000 family of standards in their management system.
5. Obtain guidance on specific topics within the quality management system
6. Establish their current status, determine the gaps between their quality management system and the requirements of ISO 9001:2000
7. Determine the processes that are needed to supply products or services to their customers
8. Develop a plan to close the gaps in step 6 and to develop the processes in step 7
9. Carry out their plan
10. Undergo periodic internal assessment
11. Decide if they needed to demonstrate conformance?
12. Undergo independent audit
13. Continue to improve their business

Although they are administered differently, most van lines and many large agents were certified or in the process of being registered to this new quality management system by December, 2003.

Regardless of their size and motivation, most report they were able to obtain measurable operational benefits shortly after deploying the standard. Today, those organizations that continue to rigorously follow the ISO methodology have found that the payback is strengthened through effective internal auditing and total management review of their system performance.

The metrics are different among the certified companies but generally involve a review of critical success factors like closing ratios, sales and marketing trends, packing and warehouse loss problems, service failure rates, damage or accident frequency levels and costs, estimating and invoice accuracy, length of the billing cycle, labor ratios, sales performance, effectiveness of training and safety programs, driver and equipment compliance, claim settlement times, number of shipments involving arbitration, customer service responses, etc.

In short, all of the ingredients that define the operational efficiency of each department, participating service provider, or domestic or international division are scrutinized by different levels of employees trained to be internal ISO auditors. Their job is to determine the gaps between their company’s quality management system, the internal goals of what they want to achieve and their ability to meet the needs of what their customers expect from them.

To validate their results and ensure the accuracy of their program, movers certified to the ISO 9001:2000 standard must also arrange - and pay for - an outside independent audit of their quality control processes to certify that their internal metrics and processes are good enough to ensure that the organization, its agents, van operators and affiliates all meet their customer needs more effectively.

Over time successful use of these ISO processes have helped most of these companies reduce their claims exposure, improve their service performance and operating ratios, increase their estimating accuracy, reduce the accounting and claims cycle times, bill their clients correctly and, most importantly, increase their customer satisfaction ratings. If they haven’t improved, at least they have a plan to get there.

Looking for a good mover? The best place to start is by checking each company, agent and/or van line candidate’s website or brochure to see if they’re ISO certified. Then ask about their performance results in the areas that you have the most concern.

Looking for a cheap mover? Check the Web!

Diane
Posts: 15824
Joined: Tue Oct 07, 2003 12:18 am
Location: Los Angeles

Re: Question regarding estimates

Postby Diane » Sat Aug 06, 2005 1:21 am

*Gulp* Thank you for a great history lesson and some good pointers. I confess that I know almost nothing about ISO 9001 except that Michael keeps mentioning it. I had thought that it was some mysterious credential related to international moves, primarily. Please do stick around and continue to enlighten us. I can vouch for the fact that my parents' furniture that I inherited is way sturdier than my own, although I've found that particleboard/pressboard furniture is quite heavy.

Fred0844

Re: Question regarding estimates

Postby Fred0844 » Sat Aug 06, 2005 7:30 am

Although the ISO standards force a company to analyze and document procedures to be followed during certain situations, which is valuable, I believe it removes the "human" element. What I have read, and I am definitely not as knowledgeable as the writer, re ISO I fear that it generates a computer programmed office response instead of a human approach to the situation. I have a problem when the response is basically " I am sorry but the BOOK SAYS...". Quite often in this industry
thinking "outside the box" can make for a better move and a happier customer. Books like "Raving Fans" and "Customer Mania" approach the idea from a more people/customer/employee orientated and customer focused approach. I believe that an ISO style combined with a customer service approach that is beyong "doing a good job" is what is important. The ISO registration is merely a piece of paper.

Rick
Posts: 3269
Joined: Thu Aug 04, 2005 7:59 pm

Re: Question regarding estimates

Postby Rick » Sat Aug 06, 2005 8:04 am

FIDI-FAIM (FIDI Accredited International Mover) is the quality certification process geared exclusively at the international moving industry.

Certification is available at two levels – FIDI-FAIM and FIDI-FAIM/ISO. FIDI-FAIM requires companies to achieve a minimum of 70% in 16 key areas covering finance, management and operations. FIDI-FAIM/ISO requires a higher level of qualification.

http://www.fidi.com/public/joining/services/quality.asp

Finding a FAIM mover http://www.fidi-faim.com/companyprofile/search.asp

Rick
Posts: 3269
Joined: Thu Aug 04, 2005 7:59 pm

Re: Question regarding estimates

Postby Rick » Sat Aug 06, 2005 9:16 am

Fred is correct. The certification is only a piece of paper. But “feel good” customer service can’t be validated the same way that that “performance” customer service can.

Can you imagine a diligent consumer asking Mighty Mo’s Magnificent Moving Men about their missing items experience and loss rate? How would AAA Affordable Access Internet Relocation Portal respond if you inquired what their claim cost per hundredweight results were during the first quarter? For their agent? And their drivers?


How many unscrupulous and unlicensed household goods carriers, internet move brokers or scam relocation companies would (or could) share their independent audit results showing their estimating accuracy, or the direct load and on-time delivery percentages, and average inconvenience claim expenses for shipments that moved during the month of June…during the last three years?

Participation in the ISO certification process constantly raises the bar on service performance because each office employee, packer, van operator, helper-laborer, warehouse worker, and administrator is supposed to be trained to become part of their company’s customer service solution.

Most visitors to this forum are looking for value in their relocation provider. Basically they want to find a mover they can trust for the money that they are going to have to invest. With no other uniform tool available to access the capabilities of the thousands of different service providers available to them, the piece of paper might just be a good place to start.

Diane
Posts: 15824
Joined: Tue Oct 07, 2003 12:18 am
Location: Los Angeles

Re: Question regarding estimates

Postby Diane » Sat Aug 06, 2005 9:58 am

Thank you for signing up for membership, Rick, and for your input.

I notice that in the new Highway Reauthorization Bill awaiting Bush's signature, a quarterly claims report requirement has been established. Although it will probably be at least a couple of years before reports are required to be filed, the intent of the legislation seems to be that eventually, moving companies will have to make their claims ratios public.

Rick
Posts: 3269
Joined: Thu Aug 04, 2005 7:59 pm

Re: Question regarding estimates

Postby Rick » Sat Aug 06, 2005 10:53 am

Yeah…those three guys down at FMCSA will have a whole lotta fun enforcing that one when it becomes law!

The Interstate Commerce Commission (ICC) use to require carriers to submit an Annual Performance Report to the Federal Motor Carrier Safety Administration (FMCSA), Office of Enforcement and Compliance. This instrument was originally designed to provide consumers with uniform performance information on all regulated household goods carriers.

Since most participants were privately held companies and the ICC had few informed enforcers, some carriers routinely “massaged” their results thus misrepresenting their performance not only to the government and each other, but, more importantly, to their customers. With no way to effectively police it, that compliance requirement died with the ICC Termination Act in 1995.

The ISO process requires that a company monitor itself to ensure that it is meeting the needs of all of its customers. It is a self imposed quality management system. Participants have no reason to invest the time, training and external audit fees to lie to themselves. As they improve their business performance, they not only increase their profits but improve their customer appeal.


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