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Is shopping for a mover in a virtual marketplace safe? - Part II
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2001 GAO Congressional Report
In Part I, we listened to the arguments presented in American Public Media’s recent Marketplace report, Online competitors move in on shippers, and asked if deregulation of the trucking industry put consumers in control - or jeopardy - when shopping for moving services online.
The household goods moving industry, which was developed around the expansion of the intercontinental railroads in the U.S. during the nineteenth century, was deregulated by Congress in 1980. Within a very short period, an industry with several hundred carriers quickly grew to over 20,000+ nationwide. Overnight, consumers considering relocation were faced with many new price and service level options offered by a multitude of unknown service providers.
The only instrument used by the Interstate Commerce Commission (ICC) to provide consumers with uniform “quality control” performance information on all regulated household goods carriers, the Annual Carrier Performance Report, disappeared when Congress approved the ICC Termination Act in 1995.
About the same time that the carrier performance report met its demise, widespread consumer acceptance of the Internet began to flourish. By July 2001, it was estimated that 165.2 million users were logging in each month. This year it is estimated that 224 million Americans (80.6%) will use the Web everyday! Two billion users will click on worldwide by 2011.
Due to the expensive and unregulated nature of this industry, the high price tags associated with “moving” and “relocation” piqued the interest of many legitimate and not-so-legitimate internet entrepreneurs including many unscrupulous and unlicensed household goods carriers, independent movers, agents, move brokers and relocation company wannabees.
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) advised Congressional committees 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.”
Although both the GAO and DOT recognized 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,” there was no enforcement effort to fix the problem. Consumers were essentially left to their own devices to 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.
Since the household goods industry has no uniform reporting requirement nor centralized resources that rate the service performance of carriers, those interested in doing their due diligence before they invest in a mover frequently visit online “informational” resources like BBB.org and Epinions.com or the more controversial Ripoffreport.com and Movingscam.com to try to perform a responsible analysis. Most are shocked at what they find. You would be too!
These sites are like online report cards filled with flunking grades. Many contain subjective descriptions about the listed companies’ service failures, poor estimating practices, ineffective communications, hostage situations and the incompetence of personnel throughout the entire moving process. Yet hidden deep within these one-sided, personal accounts are nuggets of useful information in which most respondents define their own critical success factors. If considered collectively, they show golden opportunities for process improvement to legitimate service providers in the industry.
Last year the nation’s Better Business Bureaus (BBBs) reported that moving/storage companies ranked fourth in the most frequently checked out industry with their offices. Inquiries jumped from 563,126 in 2002 to 1,149,060 in 2008 – an increase of 204%. In 2001, the BBBs results ranked the moving industry sixth with just 274,388 inquiries.
Thanks to the pervasive power of the internet there’s been a 419% increase in the number of reliability reports issued by the BBBs during just a seven year period, and, collectively, the moving industry jumped even closer to the top of the list of most suspicious companies preying on the American consumer.
In Part III we’ll look at the primary reasons those considering relocation should be wary when shopping for transportation services online.
For more info: Still at your wit’s end? Join me at RELORoundTable – a gathering place where interested visitors can participate in a mutually supportive but commercially neutral learning environment that deals with the trials and tribulations of movin’.
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