Household Goods: the Good, the Bad and the International

imagesFor employees moving as part of a relocation package, one of the main costs and areas for concern is the shipment of their household goods. Employees want their goods moved timely and with the utmost of care.

Employers also want a timely move and to, more importantly, keep costs down. Statistics show that 69% of those moving as part of a relocation are current company employees. Subsequently, current domestic, home-owning employees allot for the highest relocation costs incurred by employers at $91,528.

According to the latest US Transfer Volume and Cost Survey, a majority of relocating employees are offered the benefit of shipping their goods to their new location by their employer and 94% of these employees are also allowed a storage period of which their employer will cover. Since this is a service provided to many relocating employees, the challenges associated with coordinating and performing the household goods benefit as well as the growing cost to provide this service, are being felt by employers and relocation companies alike.

Employee Category Average Cost
Current employee homeowner $91,528
New hire homeowner $71,786
Current employee renter $24,714
New hire renter $22,493
Average household goods shipping cost $12,459

One of the main challenges to the household goods shipping industry noted by the Bureau of Labor Statistics include a driver shortage, due to the aging of the industry’s manpower and lack of shipping capacity. Additional barriers to providing quality service and de-escalating costs include increased regulations (such as emissions testing and more stringent daily driving limitations) and industry expenses (container costs and interstate charges).

International Perspective

Aside from costs, another trend where the household goods industry is changing revolves around the varying landscape of international moves in the last 20 years. Here’s a look at the then and the now:

Then

Candidates moved to further career options
Upper management and family scenarios
Very few limits on household goods shipments
Most moves went from the U.S. to Europe
Assignment duration: 2-5 years
Minimal inspection of household goods containers
Social security number – identification of choice
Male-dominated relocations

Now

Candidates selected to complete a specific task
Millennials – in the relocation mindset
Limits on container size and quantity
38% of moves don’t include the U.S.
More variety: short-term, business travel, etc.
All containers X-rayed/60% inspected
Employer ID Number (EIN) assigned to all moves
Many more women taking relocations

Employees, especially younger, single ones, are embracing the international relocation mind-set. The top five cities that young expats favor include:

Amsterdam  Desired for its livability, affordability, and high salaries

Singapore  A truly international city known for its easy commuting and high quality childcare

Munich  Alps beauty with a small-town feel, great public transport

New York  Easy assimilation and best life experience

London  Multicultural city, easy commuting, free museums

Cities that pose challenges, not only for the employee, but, employers as well include:

China  Changes to customs process without notice

India  Climate changes/port challenges

Brazil  Laborious customs process

Argentina  Difficulty in getting funds into and out of the country

Russia  Imposed duty and tax fees which are the responsibility of the employee to pay

Additionally, many emerging countries are difficult from a relocation standpoint due to a lack of infrastructure, making the process an untraveled territory.

 

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