Industry Trends - Military Fluctuations

Transcription

1 trends industry ISSUE 1, 2011 A QUARTERLY DATA PUBLICATION OF THE AMERICAN MOVING & STORAGE ASSOCIATION

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3 industry year three trends 2011 Volume 3 Number 1 While this issue starts the third year of Industry Trends, many of you are reading this publication for the first time. In 2012, most categories of members will receive this publication as part of membership and we wanted to give you a sneak peek at one of the ways that AMSA is enhancing your membership value was a good year for the moving and storage industry, as we finally reversed a long trend of declining shipment numbers. Overall, shipments were up 5% from 2009, although we are still a long way from shipment levels of several years ago. COD shipments account for the largest percentage, at 39%, with corporate moves at 35%, and military shipments now accounting for a record 24% of interstate moves. With home sales continuing to be slow, we do not expect to see rapid growth for our industry. The summer of 2011 is however expected to be a very busy one, especially in the military sector, as they wrap up the latest round of base closures with a surge of moves this summer. With industry capacity down, there could be significant problems this summer. Much of the data included in this issue is from our year-end 2010 data study, so we are reporting numbers from the entire year. Other issues have partial year-to-date information or other types of data. This time, we set aside our standard practice of examining a particular region of the country to instead concentrate on a specific sector of the industry. Starting on page 10, we look at military moves, an industry segment that figures to feature prominently this summer, due to a large number of BRAC (Base Realignment and Closure) moves. We will return to the regional reports for the next issue. This edition also contains inbound/outbound reports, looking at areas of the country with many moves in or out. Some regions are starting their recovery from the latest recession faster than others and we see individuals moving to a different part of the country in an effort to improve their economic circumstances. This mobility helps make America great and movers are a key element of it. Since home sales are so closely tied to the outlook for movers business, we will continue to report on the latest numbers in this area in each issue. It looks like the light at the end of the tunnel is finally starting to come into closer focus, and we will start to see an increase in business soon. 2 shipment volume 3 detailed shipment summary 4 regional shipment information 5 timing of moves 6 inbound/outbound information 8 existing home sales 9 new home sales 10 spotlight on military Published quarterly, Industry Trends provides an overview of current trends and business activity within the sector, and offers data on shipment volume, both aggregate and regional; demand factors; timing; inbound/ outbound data; and market-specific trends and outlooks. Most data is based on information submitted confidentially to AMSA by its members. Industry Trends provides subscribers with the most comprehensive look at this $16.5 billion industry available each quarter. Industry Trends is published quarterly by the American Moving & Storage Association. The publication is available on a subscription basis for $275 for members and $550 for nonmembers. Information provided in this publication cannot be reproduced without the express permission of AMSA. For more information, contact Scott Michael, Vice President of Military and Government Relations and Advisor to the President, at smichael@moving.org. AMSA, 2011 Scott Michael Vice President of Military and Government Relations and Advisor to the President Issue 1/ 2011 INDUSTRY TRENDS 1

4 REPORT 1 shipment volume 2010 up over past years Acomparison of household goods shipment volume for the past three years, based on AMSA data studies, shows that for 2010, total household goods (first proviso) traffic was reported 5.1 percent higher than This reversed a long trend of double-digit decreases in shipment volume. Corporate shipments led the way, up 10 percent over 2009, although that was a particularly bad year in the corporate sector, down over 26 percent from Government shipments, including military, were down in 2010 over These sectors had held fairly steady over the past few years as the private sector moves plummeted, so a small drop this year was not too surprising was also a good year for individual or COD shippers, as that sector was up more than 5 percent. These numbers are based on the pickup date reports submitted to AMSA by nine participating carriers, so they will vary slightly from other numbers we report based on shipments that were billed in a given year, due to the lag between when a shipment is picked up and when it delivered and the paperwork is pulled together to process the revenue from the shipment. Pickup date reports such as this one are more accurate for measuring when moves take place, while billed shipment reports will have more accurate information about shipment weight and distance and other factors relating to the specific characteristics of the shipments. That data must be accurately entered in order to be billed, but an estimated weight would probably be used for reporting the shipment at the time it is picked up. worst year in comparison average year in comparison best year in comparison Comparison of Shipment Volume Year to Year Based on Pickup Date Traffic Type Full Year 2010 Compared to Full Year 2009 Full Year 2009 Compared to Full Year 2008 Full Year 2008 Compared to- Full Year 2007 Corporate Account-NAC 10.2% -26.7% -8.7% Private Transferee-COD 5.6% -11.1% -17.7% General Services Admin-GSA -4.6% -0.5% -7.0% Military -1.6% -1.9% 5.7% Total 1st Proviso Traffic 5.1% -14.7% -10.0% 2 INDUSTRY TRENDS Issue 1/ 2011

5 detailed shipment summary Total shipments down 30% in decade REPORT 2 The 2010 shipment summary shows a significant decrease in both corporate (NAC) and individual (COD) shipments over the past five years. From 2001 to 2005, there was essentially no change in the total number of COD shipments, at just over 300,000. In those years, the big story was the drop in corporate account shipments, from nearly 300,000 to about 250,000. In fact, back in 2001, account shipments made up 42 percent of the total, almost as high as COD customers. COD shipments dropped from 46 percent of the total in 2005 to only 39 percent of total household goods shipments, while NAC shipments continue to account for about one-third of all moves. Military shipments held steady at about 110,000 shipments reported by the carriers in this study, but the decline in other traffic types brought the percentage of military shipments from 16 to 24 percent. After increasing from 2001 to 2005, average weight fell in 2010 for all traffic types except GSA. In many categories, the decline in weight fell even below 2001 levels. Overall, average weight is down 8 percent from 2005 and 6 percent below 2001 levels. By contrast, average distance appears to be increasing, although a closer look at the numbers indicates that military shipments are the only ones with larger average miles. Each of the other segments is generally trending downward in distance. Since the distance between cities is not changing, the magnitude of the change is very small, and reflects changes in traffic patterns. The bottom line for total number of shipments is down almost 30 percent over the past decade, with 27 percent of that drop occurring in the past five years. Shipment Summary Number of shipments Shipments % of total Avgerage billed weight Avgerage billed miles Number of shipments Shipments % of total Avgerage billed weight Avgerage billed miles Number of shipments Shipments % of total Avgerage billed weight Avgerage billed miles Corporate Account-NAC Private Transferee-COD 173, % 8,688 1, , % 9,586 1, , % 9,432 1, , % 6,703 1, , % 7,298 1, , % 6,722 1,250 Military 118, % 6,397 1, , % 6,444 1,298 94, % 6,361 1,225 General Services Admin-GSA Total 1st Proviso Traffic 10, % 7,592 1,033 10, % 6,593 1,085 9, % 8,017 1, , % 7,344 1, , % 7,983 1, , % 7,840 1,178 Issue 1/ 2011 INDUSTRY TRENDS 3

6 REPORT 3 regional shipment information Heaviest shipments in Southwest region The 2010 report of shipment weights by region shows that the Mid-Atlantic region has passed New England for the lightest shipments on average, with the Southwest continuing to have the largest shipment average weights. The Southwest average is boosted by COD shipments, where it is the only region over 7,000 pounds. The Great Lakes still has the largest average weights for corporate shipments, while the Central region now has the largest GSA shipments. The Mid- Atlantic region boasts significantly heavier military shipments than other regions, presumably due to a concentration of high-ranking officers in the Washington, D.C. metropolitan area. Officers have larger shipping allowances. Regional shipment information Average shipment weights (in pounds) by region comparing year 2010 to year New England Mid- Atlantic Great Lakes Central Southeast Southwest West Average Corporate accounts (NAC) 7,967 8,431 9,479 7,937 8,916 9,283 7,616 7,228 Individuals (COD) 6,029 6,878 6,663 6,909 6,799 7,086 6,846 6,583 Military 6,253 7,004 6,134 6,766 6,513 6,174 6,106 6,421 GSA (General Services Administration) 8,880 6,114 7,174 9,479 8,658 8,799 8,595 8,243 Average 7,282 7,107 7,363 7,773 7,722 7,836 7,291 7, New England Mid-Atlantic Great Lakes Central Southeast Southwest West Average Corporate accounts (NAC) 8,393 9,724 11,215 10,381 10,224 10,342 8,629 9,844 Individuals (COD) 6,505 7,242 6,985 7,214 7,261 7,717 7,326 7,179 Military 6,979 7,225 7,247 6,949 6,592 6,404 6,317 6,816 GSA (General Services Administration) 9,027 7,746 8,867 9,540 9,738 11,280 8,655 9,265 Average 7,726 7,984 8,579 8,521 8,454 8,936 7,732 8,276 4 INDUSTRY TRENDS Issue 1/ 2011

7 timing of moves June still most popular moving month REPORT 4 In 2010, June continued to be the most popular month to move, with 12.7 percent of moves picked up that month, the second highest percentage in a decade. July and August remained strong just behind June at 11.9 and 11.1 percent. February continued to be the slowest month, down to only 5.2 percent of the moves in the year. Not only are there are fewer possible dates in that month, but weather is likely to be an obstacle in many locations. The flattening of the volume in the peak months may have been a result of the capacity limits hit last summer. This also caused the percentages of moves in September to increase from 8 to 9 percent of the year s shipments, as the busy season lasted into the early fall, and September passed May in volume. Shipments Picked Up by Month Comparison of Years Percent of Moves Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. FALL 2010 INDUSTRY TRENDS 5

8 REPORT 5 inbound/outbound information Laredo, Texas and Flint, Mich. top surveys Laredo, Texas and Flint, Mich. are the most unbalanced markets in AMSA s data studies for 2010, with 70 percent of Laredo s shipments inbound and 71.5 percent of Flint s going outbound. Chattanooga, Tenn. had the heaviest inbound shipments on average(9,714 lbs.), with Kokomo, Ind. having the heaviest outbound shipments (9,724 lbs.). Mansfield, Ohio, also had fairly heavy average outbound shipment weights. Several rural locations made the list of top inbound areas. The region called Rural Kentucky, for example, includes all of the different parts of the state that are not associated with one of the major cities: Lexington, Louisville, or Owensboro. Suburbs of other major cities on the border of Kentucky, such as Cincinnati, would also not be included in Rural Kentucky. Most of the top inbound areas also see heavier weight shipments coming in to the region than the average of outbound shipments from that area. Many of these areas have small numbers of shipments, which makes it more likely to see large swings in shipment characteristics. The top outbound areas, by contrast are split on which type of shipments are heavier on average Inbound and Outbound Markets for Select Areas Average weight inbound Average weight oubound Total Shipments % inbound Laredo TX 5,090 8, % Myrtle Beach SC 7,610 7, % Chattanooga TN 9,714 8,744 1, % Rural Delaware 8,401 7, % Fort Myers FL 6,221 6,180 2, % Wilmington NC 8,436 7,533 1, % Williamsport PA 8,924 7, % Rural Alaska 6,824 7, % Punta Gorda FL 6,427 5, % Asheville NC 8,490 7, % Richland WA 7,407 7,320 1, % Hagerstown MD 5,187 4,739 1, % Flagstaff AZ 7,347 8, % Rural Kentucky KY 8,335 8,111 4, % Gadsden AL 9,349 7, % Average weight inbound Average weight outbound Total Shipments % outbound Flint MI 7,500 7, % Lima OH 8,042 8, % Racine WI 7,331 7, % Topeka KS 7,612 6, % Monmouth NJ 6,819 7,772 2, % Utica NY 7,793 5, % Mansfield OH 7,775 9, % Anniston AL 8,296 7, % Nassau NY 5,657 6,616 4, % Lafayette IN 7,990 6, % Lansing MI 6,969 6,383 1, % Binghamton NY 7,184 7, % Kokomo IN 7,183 9, % Bangor ME 7,185 5, % Grand Forks ND 6,837 6, % 6 INDUSTRY TRENDS Issue 1/ 2011

9 inbound/outbound information Metro area rankings hold steady REPORT 5 When only the 25 highest volume metropolitan areas are analyzed, Baltimore has more shipments inbound now, as compared to an outbound flow five years ago. All of the other cities are still either inbound or outbound, with limited changes. Detroit passed the 2005 leader, Anaheim, as the most heavily outbound metropolitan area, with 64 percent of the shipments in Detroit headed outbound in Charlotte and Dallas are the most heavily inbound locations on the list for 2010, at just under 60 percent. Charlotte also headed the 2005 list. In terms of number of shipments, Phoenix fell from second to fourth, switching places with Chicago. Inbound and Outbound Shipments in Top Metro Areas highest volume areas 10 Total Shipments 10 Shipment % inbound 10 Shipment % outbound Total 05 Shipments 05 Shipment % inbound 05 Shipment % outbound Washington DC 33, % 45.5% 41, % 49.6% Chicago IL 18, % 59.7% 26, % 55.6% Atlanta GA 17, % 46.7% 27, % 41.9% Phoenix AZ 17, % 47.6% 31, % 40.2% San Diego CA 16, % 51.4% 21, % 59.9% Los Angeles CA 14, % 52.1% 24, % 58.9% Seattle WA 14, % 48.1% 21, % 40.4% Houston TX 13, % 42.4% 17, % 42.3% Dallas TX 13, % 41.6% 20, % 42.9% Boston MA 13, % 51.7% 18, % 56.9% New York NY 12, % 54.0% 18, % 58.1% Philadelphia PA 12, % 56.5% 17, % 55.9% Denver CO 12, % 46.1% 16, % 46.8% Norfolk VA 11, % 48.8% 14, % 46.6% Minneapolis MN 10, % 52.6% 14, % 51.9% Baltimore MD 10, % 48.7% 13, % 54.4% Tampa FL 9, % 47.9% 16, % 45.3% Detroit MI 9, % 64.2% 14, % 61.0% San Antonio TX 9, % 42.3% 10, % 41.6% St Louis MO 8, % 56.9% 11, % 51.4% Las Vegas NV 8, % 48.3% 15, % 45.1% Colorado Springs CO 7, % 46.7% 8, % 45.7% Anaheim CA 7, % 53.7% 12, % 62.7% Raleigh NC 7, % 44.3% 11, % 41.1% Charlotte NC 7, % 41.0% 11, % 32.9% Issue 1/ 2011 INDUSTRY TRENDS 7

10 REPORT 6 existing home sales Slow growth stalling out The National Association of REALTORS reports sales of existing homes dropped in 2010, after increasing steadily through February was down slightly from last year, at almost 3 percent. The trends in sales price have less correlation to moves, but falling prices and lower interest rates may indicate that homes are becoming more affordable to new buyers. Last year, it appeared that the Northeast and Midwest were driving this recovery, with sales in the West continuing to lag behind. Compared to February of 2010, the West is now ahead of that pace, with the Northeast and Midwest unable to maintain last year s pace. These numbers are for all home sales, to include condo and co-op sales in addition to the traditional single-family sales. AMSA s data studies show that shipments picked up in February were up almost 10 percent from the same month in 2010, with corporate and military shipments up the most for the month. GSA shipments are down significantly. Segment Snapshot Feb. '11 vs Feb. '10 Corporate accounts (NAC) 17.0% Individuals (COD) 3.2% Military 9.5% GSA (General Services Administration) -6.3% Total 9.4% Snapshot of Existing Home Sales ( Feb. 2011) Number of Existing Sales U.S. Northeast Midwest South West ,913, ,000 1,129,000 1,865,000 1,070, ,156, ,000 1,163,000 1,914,000 1,211, ,907, ,000 1,076,000 1,860,000 1,154, Preliminary Feb. 4,880, ,000 1,010,000 1,840,000 1,260,000 Feb vs. Feb % -8.3% -9.0% 0.0% 2.4% Feb vs. Jan % -7.2% -12.2% -10.2% -8.0% Feb Raw Numbers 293,000 48,000 61, ,000 71,000 Feb vs. Jan % 17.1% 8.9% 2.7% -9.0% Median Sales Price (dollars) U.S. Northeast Midwest South West 2011 Preliminary Feb. 156, , , , ,000 Feb vs. Feb % -9.5% -5.4% -3.9% -5.2% Source: National Association of REALTORS 8 INDUSTRY TRENDS Issue 1/ 2011

11 new home sales Sales continue to struggle Number of new houses sold (Quarterly, ) REPORT 7 The U.S. Census Bureau reported sales of new homes in the fourth quarter of 2010 dropped to the lowest level in years. The cost of the home also factors into the purchaser s decision to hire a professional mover, with higher-cost homes being more likely to see a moving van parked in front. New home sales in the over $750,000 category were the one bright spot in the fourth quarter, up 14.5 percent from the previous quarter. Homes of that size are also more likely to have lots of furniture, thus increasing the weight of the move. The only category to see an increase from the same quarter of the previous year were homes between $400,000 and $500,000. The table below shows housing sales for new and existing single-family homes, along with housing starts for future new homes. Home sales have a strong correlation with moves, and the National Association of Home Builders (NAHB) reports decreases in sales and housing starts over the past five years. These mirror the downward trend in household goods shipment volume. NAHB also projects future sales for 2011 and 2012, so we can see their expected path to recovery. NAHB predicts sales increases in 2011 with greater improvement in NAHB projects that sales of new and existing homes sales will increase by 6-8 percent this year, and also expects starts of newly built homes to increase 15 percent this year and another 47 percent next year. They foresee sales of the new homes they are building to surge 49 percent in 2012, with existing sales up 16 percent. While these numbers seem like large percentage increases, they would still leave the sales numbers well below the sales rates for st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Source: US Census New Houses Sold By Price Range (2010) Period $125,000 to $149,999 $150,000 to $199,999 $200,000 to $249,999 $250,000 to $299,999 $300,000 to $399,999 $400,000 to $499,999 $500,000 to $749,999 $750,000 and over 1st quarter 10,885 19,575 13,728 13,031 10,929 5,391 4,792 2,367 2nd quarter 10,537 24,397 16,439 11,569 13,491 5,865 4,939 2,286 3rd quarter 7,254 19,353 13,496 11,435 9,332 4,318 3,769 1,619 4th quarter 8,148 16,604 9,739 8,017 8,944 4,552 3,647 1,854 Source: US Census Housing sales comparisons & projections by year (in millions) House Starts New Single Family Sales Existing Single-Family Home Sales Source: National Association of Home Builders Issue 1/ 2011 INDUSTRY TRENDS 9

12 REPORT 8 spotlight on military Busy summer expected In the Winter 2010 issue, we changed from the normal practice of highlighting a region of the country to focus on a particular segment of the moving and storage industry special commodity shipments. In this issue, we turn to military shipments, which are expected to loom large this summer peak season due to an expected surge in moves with the current Base Realignment and Closure (BRAC) cycle. The military has worked hard to identify exactly how many shipments it expects to see in addition to its normal workload of moves. These charts indicate on a monthly basis the number of baseline moves in a normal year and the forecast for additional BRAC moves. In total, up to 16,000 additional moves are anticipated, although some of those have already occurred early in this fiscal year, and others may not materialize if the employee ultimately decides not to relocate. The government uses a fiscal year starting October 1, so its first quarter runs through the end of the calendar year, and the summer months are split between the third and fourth quarters. Forecasted Additional outbound shipments due to BRAC 9,000 8,000 7,000 6,000 Forecasted BRAC FY 10 Forecasted increase in shipments due to BRAC 60% 50% 40% Outbound Inbound Total 5,000 4,000 30% 3,000 2,000 1,000 20% 10% 0 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Year 2011 Sept. 0 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Year 2011 Source: SDDC Source: SDDC 10 INDUSTRY TRENDS Issue 1/ 2011

13 REPORT 8...continued Under the congressional law that authorized the military to close and reorganize unwanted facilities, the changes identified must be completed by Sept. 15, 2011, with employees and service members at work at their new duty station by that date. Many of the BRAC moves are local, such as thousands of moves from rented space in the Washington, D.C. area to Fort Belvoir, Va. Those employees are not going to be authorized to move their residence at government expense, although some may choose to relocate closer to their new office. Other BRAC moves will have an impact on household goods movers this summer, with the largest impact being felt at Fort Bragg, N.C., which is receiving a large inbound move from the Atlanta area, while simultaneously shipping a Special Forces unit to Eglin AFB in Florida. The inbound shipments were expected to start arriving in March, when things are normally slower, but the main outbound traffic was projected for the summer peak months. In the chart below that includes both inbound and outbound moves at Fort Bragg, the total volume starting in March was expected to exceed to highest volume month last summer, with nearly an additional 1,000 moves expected to be added for June. Projected BRAC shipments 3,000 2,500 Inbound Outbound Projected shipments at Fort Bragg, inbound and outbound 3,000 2,500 Fort Bragg Forecasted BRAC FY 11 2,000 2,000 1,500 1,500 1,000 1, Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Quarter 2 Quarter 3 Quarter 4 Fiscal Year Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Year 2011 Source: SDDC Source: SDDC Issue 1/ 2011 INDUSTRY TRENDS 11

14 REPORT 8...continued The chart below compares military shipments to corporate and individual shipments by month. June is the busiest month for all three segments, with 12 percent or more of the shipments being picked up that month. The military starts to see a significant increase in May, and then falls off more rapidly in August and September. The other market segments continue the June volume fairly steadily through July and August. The weight of military shipments in general is smaller than commercial shipments, as the military pays to relocate service members of all ranks, and the military has weight limits for how much it will ship by rank. By percentage, there are actually more 2,000 to 4,000 pound shipments on the commercial side, although this is also the most common weight bracket on military moves. The military has far more small moves under 2,000 pounds, as most of those size moves in the commercial sector are not performed by professional movers. The military caps shipment weight at 18,000 pounds, so the number of military moves above that (where some of the cost is borne by the shipper) is less than on the commercial side, where high-level executives may have huge shipments. Timing of military moves, compared to commercial shipments Weight of military shipments, compared to commercial shipments NAC COD ML/ NAC+COD ML/ Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec INDUSTRY TRENDS Issue 1/ 2011

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