The Current Situation
In April 2020, the Department of Defense (DoD) plans to announce major changes to its transportation program for military families by awarding a single supplier the entire household goods move business. The outcome of this decision will have a major impact on the household goods moving industry, including corporate relocations. Currently, it is estimated that over 20% of all United States domestic moves are military personnel, equating to approximately 400,000 to 500,000 moves per year. The massive volume of this running through one single entity is not customary in the moving industry and has the potential to affect corporate household goods movers’ capacity, availability, and service. At WHR Group (WHR), we are following the outcome of this decision closely and have taken proactive steps to ensure the following for our clients:
- WHR has partnered with a broad network of independent household goods movers and agents so that the capacity of our household goods move offerings will not be limited. In other words, we are less dependent on major van lines.
- WHR has thoroughly vetted the service quality of its preferred household goods partners so that our white-glove level of service will continue without interruption.
- Ongoing discussions with alternative carriers have been initiated and we are fully vetting backup suppliers if needed.
The pending DoD decision to award the contract to a sole source certainly translates into a reallocation of move volume for the entire industry, but WHR remains committed to working through this reallocation as necessary. We will continue to partner with moving companies that offer a great move experience to all our clients.
The Why
For a very long time, many constituents associated with the military have lobbied for a change to how military moves are managed. Concerns over lost items, theft, poor customer service, inadequate damage claim initiation procedures, lengthy transit times and moving delays have become commonplace problems. With a heavy percentage of moves occurring during the moving industry’s peak season summer months, concerns have only increased.
This all crystalized in the summer of 2018, with what many characterized as one of the worst moving seasons ever. A military spouse started a petition on change.org calling for an overhaul to the household good move process. According to U.S. Transportation Command (TRANSCOM) figures, over 105,000 military family members signed this petition calling for improvements to the current DoD transportation system. With a petition garnering that much attention, officials took notice.
Present Day
Currently, TRANSCOM uses the Defense Personal Property Program (DP3) to manage the movement of household goods for military families. The DP3 program works by having the military office book moves directly with transportation service provers (TSPs). This could be any number of military offices awarding moves to hundreds of moving companies. The specific numbers of entities involved in this program is unknown; however, according to an article posted on the Lexington Institute’s website, “DoD relies on 42 separate regional offices which, in turn, rely on approximately 900 TSPs.” Lexington Institute article author, Daniel Gouré, Ph.D., wrote, “Military families have to endure a change of stations every few years. A significant number experience problems including ill-trained and prepared packers and shippers, damage to their possessions, and delays in receiving compensation for their property losses. Poor treatment during repeated moves can impact the willingness of military personnel and their families to remain in the military.”
Despite stale technology and overall industry practices that have not changed much in the past 20-30 years, there have been several major changes to the cost of moves. The Tax Cuts and Job Act passed into law at the end of 2017 and a pricing reset of the moving industry imposed by two of the largest van lines in 2018 accounted for large-scale pricing changes. Unfortunately, these changes have only affected the cost of moves but not resulted in a better overall move experience. The pending spring 2020 TRANSCOM decision for a single entity has the makings of a year ripe with change unlike anything ever seen before in the industry.
Possible Award Options
In April of 2019, TRANSCOM initiated a proposal to change their program from a collection of regional offices and individual moving companies to one single source company. The hope is that this new program will provide positive change for military families by consolidating the logistics of permanent change of station transfers under one sole provider. TRANSCOM has requested final bids from prospective entities, and it is widely believed that the field has been narrowed down to four finalists, with a go-live date of January 1, 2021.
The award could go directly to a single van line entity or a consortium of van lines, such as North
Acronyms to Remember
DoD = Department of Defense
TRANSCOM = U.S. Transportation Command
DP3 = Defense Personal Property Program
TSPs = Transportation Service Providers