Tuesday, September 17, 2013

Things #relo companies don't want you to know

Milton Friedman once explained to us what the four ways to spend money are. They're aptly summarized in the quadrant on the right.

When a company agrees to pay for your relocation and provide you with a capped allowance it may be argued that you fit in the category circled in red, i.e. you'll spend someone else's money on yourself. In this case, it's reasonable to assume that you'll want to get your stuff moved at a level of service that you expect, but you won't care particularly about the price as long as it doesn't exceed the allowance. Guess what, moving companies understand that very well and some of they will try to make an easy buck at your expense.

I'm relocating to Northern California from Ireland later in the year. At the end of August I had a visit from a surveyor working for local movers to estimate the volumetric weight of the goods to be moved. He was shown around the apartment, he asked a few questions, and seemed to have an encouraging attitude towards taking everything possible. For instance, he insisted that we take planters with us, despite not being able to take the plants due to strict import and quarantine regulations. He also suggested that clothes airers are very hard to come by in the United States and should definitely be taken along. WTF?! Ok, whatever, ignored that. To finish it off, he put the shipment down as air freight, which is at least 30% more expensive than sea freight, without a mention about the costs.

When the costings estimate came in I was told that my allowance allocated for the move of goods, flights and temporary accommodation was almost exceeded by the shipment alone. It seemed a little dear for a limited amount of stuff that my partner and I decided to move. At that point I did a quick Fermi estimation of the total weight of all goods and the weight from the costings estimate seemed exaggerated about 5 times. When I raised a concern with the move coordinator I received some serious pushback - the coordinating mover defended survey results using my ignorance as reason for confusion. Yet, they never requested any additional evidence. A rather underwhelming response.

I wasn't going to take that lying down.

Before I go on, let me summarize the rules of the housemove game: the surveyors use dimensional weight as a billing technique for estimating the cost. They look at how much space in cubic feet each item takes, multiply each cubic foot by 7 lbs for sea freight or 10 lbs for air freight, and present you with a volumetric weight estimate. So a load with a volume of 50cuft corresponds to 350lbs of volumetric weight. If the actual weight is greater than the volumetric weight, you're charged by actual weight. Simple as that.

Unhappy about the original estimate, I created a model cubic foot (cuft) and took digital snaps of items listed in the survey, captioning them with their corresponding volume estimate.

You never know when a set of red chopsticks and CD box may come in handy. Meet my model Cubic Foot.

The photos around this text include some of the juicier bits. I think you get the idea of the degree of error for most of the items. Do you think the games take 8 cubic feet, or more like 1? How about the backpacks. Is it ambiguous that they take less than 10cuft? They also weigh less than 70lbs, you can take my word for it.

Okay, you might now say, but what about overhead from packaging? The goods can't go in on their own. True, but it's unreasonable to assume that packaging takes 5-7 times the space of the goods ... and this particular survey only reported the net volume of goods. Crating and packaging was added extra on top, as a significant percentage (18%) of the total. A double-edged rip-off.

It should come as no surprise that an independent survey carried out by a competitor produced close to 1/2 of estimated volume. Gee, who would have guessed?

To sum up: Opportunity makes a thief. If you don't want to let this happen to you, make sure you're prepared. Here are three things you should do:
  1. Before surveyor's visit:
    1. Browse the docs on MovingScam
    2. Get wikismart on dimensional weight
  2. Upon surveyor's visit,
    1. tell them upfront, that you'll request their paperwork for inspection,
    2. be very specific as to what you take with you (they seem to hate it)
    3. for every item recorded on the list, ask how much they estimate it for.
After that, the costings estimate that they'll present you with is likely to be accurate.


Now, on the subject of costings. When a relo company gives you an estimated total cost of your move, this is what they mean.

Suppose you're relocating from Ireland to the United States, and the relo coordinator comes back with $10k for door-to-door move. The pie chart on the left breaks down where your 10 grand go.

The actual shipping is just over a quarter of the overall cost. Close to a third goes to the guys who come to pack your stuff.

Alright, that's how it works. I hope it helps!

1 comment:

  1. Don't move anything here, sell out everything and buy new stuff what you really need. Reason being: moving your used stuff here is really expensive and unless you are moving artifacts. How much is a towel? 5 USD? 10? How much is to move it here?

    For the money you can get by selling out your stuff + a little, you can buy new things here (this is a cheaper country, especially now), making sure that you get only what you really need. I was talking to several people who were moving here from Europe and it seems -anecdotal evidence- that everybody agreed that not-moving significant amount of stuff to here is the best.

    ReplyDelete