Transcript China

Trends In International Moving
Terry R. Head
President – International Association of Movers
Who / What is IAM?
 The largest international trade association & advocacy
group for household goods forwarders, movers, removal
companies, logistics & service providers
 Membership includes 2,400+ companies & individuals
in more than 170 countries and territories
 Founded in 1962 to represent the interests of military
TSPs (Transportation Service Providers); scope
broadened to include commercial business in 1970s
 Annual Meeting and EXPO is world’s biggest & best
networking opportunity for business development in
moving industry
IAM and Its Affiliates
Is FLAT the New UP?
United States - Economy
FLAT seems to be the “New Normal”
 USA Economy neither up or down –
 Since 2009 Recession - economy has struggled
to gain momentum
 Growth held back by higher Federal Taxes &
government spending cuts
 2013 - USA Economy grew at lackluster 1.9 %
versus 2.8 % in 2012
 2014 projected at 2.4% (recently revised to 3%)
USA Housing Trends ?
 Unlimited number of opinions, but common
themes; and one thing is certain:
In the USA - Housing drives Moving
 2013 – Prices increased by 10.9% - highest level
in four years (Median Price up $30,000)
 Home sales expected to remain FLAT in 2014
 Inventory UP, with less competition from
investment buyers: Is this what drove markets up?
 Record low interest rates going away &
affordability worsening
Curious Facts
About Moving in the USA
 Every year more than 45 million people relocate
in the USA – (about 17% of population)
 On average – 11 or 12 times in a lifetime
 About 6.7% move to another state
 50% move due to job change, 33% due to
retirement & the rest for other issues
 Five years after graduating, 33% of young
people no longer live in same state
Source: Moving News
Local Move
(Same City)
41 %
Long Distant
(500+ Miles)
23 %
Moving to Another 19 %
City (Less 100 miles)
Regional Move
17 %
(Different Metro Area
100-499 Miles)
GREEN = Nobody Lives Here
USA Census 2010 – Dark Green Represents
Zero Population Blocks
Nobody Lives Here
USA Census 2010 – Dark Green Represents
Zero Population Blocks
10 Least Affordable
Housing Markets
1.
2.
3.
4.
5.
Hong Kong
Vancouver
San Francisco*
Sydney
San Jose*
6. Melbourne
7. Auckland
8. San Diego*
9. Los Angeles*
10. London
Four USA cities – all in California
Source: 2014 Housing Affordability Survey
UK Housing Trends
 UK Housing costs set to rise by up to 8%
in 2014, with gains in all its countries
 Average House price 247,000 Pounds Sterling
 A growing imbalance between supply and
demand
 Estimated UK needs 100,000 new homes
a year to keep up with demand
UK Economic & Trade Outlook
 Bank of England forecasts UK Economy will
grow 3.4% in 2014 (was 2.8% Nov. 2013)
 On course to overtake Germany as Europe’s
biggest economy within next two decades
 Second most successful Western economy
after USA; will slip down global rankings (6th)
due to Emerging Markets – India, Brazil, Russia
 Exports hit record levels – but so have Imports
(UK can’t escape its trade deficit)
Source: Centre for Economic and Business Research (CEBR)
Trends in UK Talent Management
 London is Top “HQ” Pick for world’s biggest
companies
 Two out of Five largest companies in the world
with a Headquarters in Europe have it in
London (60% of European Companies)
 Nearly half of all highly-skilled workers in the
top five European business cities are in London
Paris 19% - Berlin 13.7% - Milan 11% - Frankfurt 9.8%
What is an Expat?
 Expat: an expatriate person
transitive verb
 1. to withdraw (oneself) from residence in or
allegiance to one's native country
intransitive verb
• 2. to leave one's native country to live
elsewhere; also to renounce allegiance to
one's native country
Expats in the World:
The Numbers
• There were 73 million expats worldwide in
the year 1960; that figure now stands at a
staggering 230 million
• Expats make up 3.1% of global population
• Women make up 49% of expat population
• There are 6.32 million American expats and
4.7 million British expats living abroad
Source: EasyExpat.com
Top Five Destinations for UK Expats
UK now Europe’s Biggest Exporter of People
Only China and India have more citizens based abroad
UK Expats and numbers of British state pensions in brackets:
1.
Australia 1,062,000 (251,000)
2.
3.
4.
5.
Held top spot for past two decades
Stricter Visa restrictions impacting that number
USA 829,000 (140,000)
Spain 808,000 (104,000)
Canada 608,000 (157,000)
Ireland 289,000 (126,000)
Source: inShare Expat Data Tracking
Global Economies
Up, Down & All Around
BRIC Countries - Brazil, Russia, India & China
 Brazil – 4th year of disappointing growth
Big fall back to earth after last decade as one of the
leading Emerging Markets
 Russia –Weaker domestic demand and delayed investment
threatening growth
Annexation of Crimean peninsula –what’s next?
 India – Asia’s third-largest, weighed down by high inflation,
weak currency and drop in foreign investment
 China - World’s second-largest economy, projected to grow at
7.5% in 2014 versus 7.7% in 2013
MINTS
Next Economic Giants?
 Mexico – Rapidly developing infrastructure (near-shoring of
manufacturing), rising Middle Class, declining poverty rates
 Indonesia – 4th most populous after China, India & USA
Mixed economy – Private and Public play role
Only G20 member to lower debt-to-GDP ratio
 Nigeria – GDP 3rd largest in Africa, behind South Africa and
Egypt (30th in the world; was 52nd in 2000)
 Turkey – 3rd largest growing economy in the world:
Construction related industries = 30% of economy
Very large consumption base and 3 Auto Manufacturing
companies
Why Focus on Trade and
Global Economies?
Trade is to International moving
as
Home sales are to Domestic moving
Why Companies Move People
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Growth of Company
Reorganization / Restructuring
Promotions / Resignations
Knowledge / Skills Transfer
Expansion into New Territories
Budget Constraints
Tax Advantages or Disadvantages
Acquisitions / Mergers
Source: Atlas Van Lines – 2013 Corporate Relocation Survey
M & A Generates Moves
 Merger & Acquisition activity becoming major reason
why companies relocate staff
 63% of USA companies will initiate at least one
acquisition or merger in 2014 – 36% as Divestiture
 Industries expecting highest number of M&A activity:
Technology, Media, Telecommunications, Health Care, Life Sciences,
Pharmaceuticals, Financial Services and Energy
 Regions where M&A activity is likely:
USA 56%, Western Europe 29%, China 29%, N. America 27%
and Asia (excluding China) 15%
Source: KPMG 2014 M&A Outlook Survey
WHERE will People be Moving
to and from?
TOP TEN relocation destinations:
1.United States
2.United Kingdom
3.Singapore
4.China
5.Switzerland
6. India
7. Germany
8. Hong Kong
9. Japan
10. Canada
Source: UniGroup Worldwide UTS Migration Study
Changing Customer Demographics
 Younger employees willing to take on overseas postings, particularly
in emerging markets
 More ‘split-family’ assignments
 Many companies combining overseas jobs with charitable projects

IBM – 1,200 employees – 100 projects – 23 countries

FedEx – Global Leadership Corp. works with Peace Corps
 Relocation trends showing shorter time periods for international
assignments and short-term projects
 Probably smaller shipments – Average shipment size dropped
from 7,500 lbs to 5,550 lbs.
 Dawn of the “NANO-Shipper” (Customer) – Everything they own is
smaller / digitized – they just don’t have as much stuff!
Length of International Assignments
 12 Months or less
13%
 More than 12 months,
less than 3 years
54%
 3 Years or More
33%
Source: Atlas Van Lines -2013 Corporate Relocation Survey
In What will People Be Living?
With trends for postings to be shorter and for
more assignments to emerging markets, what will
we see?
 Long Term or extended stay hotels/temporary
housing
 Serviced (semi or fully) furnished apartments
 Rotation in and out of corporate housing
 Pre-Packaged Home Furnishings
WHERE are People Moving …or not?
 Five-Year Trend (Inter-Country Moves):
 USA and UK continue to hold onto first and
second place
 China is third, followed by Germany
 Both countries showing a slowing or flat trend in
relocations from USA
 Switzerland and Singapore – remain strong due
to financial firms rotating staff
 India, France and Hong Kong – Gone flat and
barely holding onto their previous slots
Source: CARTUS, Global Relocation Destination List
What Percent of USA Employees
Relocate to Each Country?
Singapore
4%
Malaysia
3%
Brazil
3%
Belgium Italy
2%
3%
Israel
2%
U.K
24%
U.K
Germany
India
4%
China
Australia
Japan
5%
France
Switzerland
Netherlands
Japan
Netherlands
5%
India
Singapore
Malaysia
Switzerland
5%
Germany
16%
Brazil
Belgium
Italy
France
6%
Israel
Australia
6%
China
12%
The JOBS are Moving!
 Re-Shoring & Near Shoring
 Reversing 20-year trend of “Off-Shoring” Jobs
3 million Manufacturing Jobs will return to North
America over the next 5 years
- Wages in China grow 15-20% a year, factor in lead times, shipping &
inventory costs, currency fluctuations, etc.
- Cost differences will be only 10-15%
- Abundance of USA Fuel sources (Natural Gas) for factories
- Stable business environments - protect the Brand’s reputation
and less civil strife
WHERE is Corporate America
Moving IN From?
TOP TEN Origin Countries – Inbound USA:
1. Germany
2. United Kingdom
3. Switzerland
4. France
5. China
6. Australia
7. The Netherlands
8. Japan
9. Belgium
10. Singapore
Source: UniGroup Worldwide UTS Migration Study
Trends in Airfreight
 Technology shipments account for 50% of Airfreight
Revenue in last 20 years
 Volume of (high-tech) cargo down due to reduced size of
product and products with more functions in single
device creating less freight to ship
 Airfreight Market will see slow, sporadic growth over next
several years due to “modal shift”
 Smaller HHG shipments may increase use of Airfreight
or Unaccompanied Baggage
Trends in Ocean Shipping
Since 2011 ocean rates have seen unprecedented gyrations
and remain under pressure
 Supply/Demand Ratios should/will favor shippers
 Challenge = maintain rate levels and market share
 Carriers may try to manage capacity
• Skipping Sailings
• Anchoring Vessels (Mothballing as in 2010)
• Returning ‘Chartered’ Vessels
 Consolidations, Mergers and Vessel-Sharing
 Increased Risk of Financial Distress (Bankruptcy)
Future Impacts on Ocean Shipping
 Panama Canal Expansion in 2015
 Larger TEU Vessels begin transiting Canal
 USA West Coast Ports will lose volume to Gulf
and East Coast Ports
 Bigger Ships = Bigger Mishaps/Cargo Loses =
Bigger Insurance Premiums
More Mis-declared Container weights
Impact on “General Average” ?
 Increase in “Round-the-World” sailings
Moving Over the North Pole
North Sea Route
a.k.a “Northeast Passage”
 New Shipping Lane from Europe to Asia
 North of Russia – Cuts off thousands of miles
and avoids transiting Suez Canal
 In 2010 just four (4) ships made the trip
 Since April 2014, 266 voyages have received
permission from Russia’s North Sea Route
Administration
 Similar increased shipping activity in the
Canadian Northwest Passage
What is UP in Moving
 Government Regulations
Ports and Border Security
Focusing on Personally Identifiable Information (PII)
CARB - California Air Resource Board
Tighter vehicle emissions restrictions
USDOT/ FMCSA - Increased Bonding Limits, Hours of
Service(HOS), CSA, Medical Registrations, EOBR
Federal Maritime Commission (FMC)
Increasing Bonds, OTI Vetting & Licensing Enforcement –
particularly with “Middlemen” and Overseas NVOs
FMC/FMCSA – Cooperative Focus on Rogues
Combating Rogues
 Use to be only a local or domestic issue – now
impacting International Moving
 The Internet is their hook to draw in uneducated
consumers of moving services
 Public – Private Cooperation is Key
FMCSA / FMC and a variety of industry entities
working hand-in-hand
Starting to turn the tide in North America
USA Government – Rogues
 Federal Motor Carrier Safety Administration – Protect Your Move
 Federal Maritime Commission - I-27 investigation – “Barrel Trade”
– MOU – FMCSA and Federal Maritime Commission
– Enhanced – licensing process and bonding
– MAP-21 Highway Bill – increased bonding for forwarders and
brokers – raised from $10,000 to $75,000
– Increased focus on international rogue movers
 Coordinated effort – Consumer Protections and Education
– Trade associations, Federal, State and local (regulatory) agencies
conducting “sting” operations to nab the scam operators – we
refuse to call them rogue movers.
Industry Action - Rogues
 American Moving & Storage Association
AMSA administers professional certifications for specialists:
Certified Moving Consultant (CMC) & Certified Packer/Loader
(CPL); and Registered International Mover (RIM)
 PRO-Mover Program – Enhanced vetting of Members
Industry Action - Rogues
 Canadian Association of Movers (CAM) –
“Year of the Reputable Mover”
 Working through Provincial Ministries of
Transport – Federal Ministry of Justice and in
cooperation with Canada’s Office of Consumer
Affairs and the Canadian Competition Bureau
www.mover.net/trust
Is Space the Next Market?
• Russia to begin Moon Colonization in 2030
• Which mover will handle first shipment of HHG?
• Who will be first mover to have branch on the
moon? Will they be a member of BAR / IAM?
Will Rogues still be a problem?
THANK YOU!
www.IAMovers.org
@IAMOVERS
SOCIALCAFE.IAMOVERS.ORG/home
www.facebook.com/iamovers
WHERE People Will Be Moving –
North America Outbound
Fifth straight year United Kingdom was the Number 1
Destination
 UK relocation traffic up 7.8%
 The Netherlands moved no. 10 to no. 7
 Switzerland from number no.14 to no. 6
 Germany down 14.6% in shipment numbers
 France down 21.7%
Source: UniGroup Worldwide UTS Migration Study
What is Down / Flat in Moving
• Drivers – Retention and Recruitment
• Hauling Capacity – remains tight, get tighter
• Pricing – Unhealthy emphasis on dollars and
cents...at the cost of Service
• Profit Margins – Revenue Distribution
• Agent Confidence – Forced to work with
‘Unknown’ bookers, haulers and TSPs
• Ability to Forecast and Invest –