Spring and summertime are busy periods for moving companies. Once the school is out of session and vacation mode starts, May through August is generally prime season according to moving industry trends, accounting for up to 70% of all relocations. In addition, the coronavirus outbreak has freed many people from the need to be close to their employment. This newly gained freedom of mobility has resulted in a 20% rise in the number of Americans wanting to relocate in the last year, with a thriving property market to go along. However, there has been an increase in moving costs that have followed the general climate in the past couple of years. There are many factors that have affected this, and today, we bring you a run-down on all of it.
Gas and oil prices
Unfortunately, professional movers may potentially raise the ultimate cost of a relocation owing to force majeure — events beyond their control. When the price of fuel rises, for example. Since moving trucks require a lot of fuel to run, especially on cross-country moves, the moving company must raise their charges to adapt to the increased price of fuel.
This is the case especially now. Geopolitical pressures, inflation, and the COVID-19 epidemic have all combined to raise the average price of gasoline in the United States. For the first time since 2008, gas prices have averaged $4 per gallon, with some forecasting $4.25 by Memorial Day. However, it is already considerably higher in certain regions, like Los Angeles and San Francisco.
When fuel costs rise, a bigger portion of family budgets is likely to be spent on it, leaving less money to spend on other products and services. The same is true for companies that must move items from one location to another or that rely heavily on gasoline (such as the moving industry). Higher oil prices tend to make corporate production more expensive, just as they make it more expensive for families to undertake their routine activities.
Increases in oil prices can also hinder economic growth by influencing supply and demand for items other than oil, such are moving supplies. Increases in oil prices can reduce the supply of other products by raising the expense of production. Rising oil prices, from a financial perspective, can push up the supply curve for the commodities and services that use oil as an input.
In addition, COVID-19 prevented industries from manufacturing as much as they used to. There has been a delay in vehicles and even packaging materials due to the consequences of the pandemic. Many moving businesses with substantially bigger van lines found obtaining vehicles, equipment, and packing materials challenging.
Truck and equipment shipments were on hold. Backorders, along with fresh orders, placed manufacturers and movers in a bind. A three to four-month wait for a new vehicle has become a headache for operators and clients.
Factories raised their prices, which drives up moving expenses, as well. The cost of packing supplies has grown by around 5%, affecting the moving costs and the users. Many companies have found it challenging to complete tasks in a timely manner during the pandemic.
The real estate industry
The relocation sector is heavily reliant on the real estate market. When the market is heated, movers are in high demand. The difference between 2020 and 2021 is that the real estate market has been continually active throughout the year. The moving business has never experienced such a surge of relocations in such a brief span of time. Moving companies usually need to think about how to increase their customer base, but that has been less of a challenge now. Some movers are opting to undertake fewer moves. Rather than postponing moves, they’ve decided to take on fewer clients in order to maintain regular delivery schedules. Another reason why costs are rising and availability is reduced is because of this.
Based on a combination of demand and fuel, national moving costs increased by around 15% in 2021. It’s also been difficult to locate a new crew to assist with shifting demands, which has been a problem. But more on that in the next paragraph.
Shortage of staff
Let’s move on to the next possible reason for the increase in moving costs. The epidemic appears to have roughly quadrupled the estimated demand for relocation in the previous year. Furthermore, with such high demand, moving businesses are having a more difficult time than ever finding staff. The industry-wide scarcity of truck drivers is one of the biggest concerns confronting moving firms, with two-thirds of enterprises experiencing difficulties. Prior to COVID-19, there existed a driver shortage, which is now substantially worse.
Driving a moving truck entails a certain amount of physical exertion. However, when paired with hot temperatures and masking regulations, it is probably unsurprising that fewer individuals are keen to start working for a moving firm right now. Some firms were no longer able to keep up with their schedules, and some drivers left to find better-paying positions, resulting in the onset of the shortage of moving workers. As a consequence, driving rates increased, resulting in higher client expenses.
How to cope with the increase in moving costs?
It is extremely difficult to forecast when obstacles in the moving business will be resolved. The basic supply and demand dilemma applies here, as it did with the driver shortage and price increases. There are several global and domestic economic variables beyond the influence of moving businesses that have an effect here. We will have to wait and see how the given factors progress in the year ahead of us.
The past year and everything that rolled into 2022 has been challenging for all of us. Even if you used the online moving quote calculator and there is a sudden increase in moving costs you haven’t expected, don’t instantly think your movers are attempting to scam you. Rather, call them to find out why your moving fee is higher than expected. When dealing with a reliable moving company, you will almost certainly receive a reasonable explanation for the extra charge.