Will Joyce, founder and owner of both Joyce Van Lines Inc., a 48-state independent carrier, and Callahan Brothers Inc., a full-service moving and storage company in Cos Cob, started his business on Canal Street in Stamford.
Now, with home sales ”“ key to the moving industry ”“ tanking, company relocations stalled and unemployment numbers still spiking, moving companies across the region have seen better days.
“In the state of Connecticut, a number of the larger companies have merged or gone out of business within the last three years,” Joyce said.
Starting three years ago, Joyce did an economic compression of his companies and reduced their debt. As he is “one of the few independents left” in the area, Joyce said he is weathering the storm, but it”™s not easy.
“The corporate relocation business nationally is down between 30 and 40 percent,” Joyce said. “The moves have gotten much smaller and the companies are not moving their employees. Corporations are still laying people off, so until all the trends change like growing unemployment and downsizing, we don”™t expect to see a lot of new hires. We believe it will take five years for things to get back to normal.”
The storage business, a combination of corporate and commercial storage and self-storage, has also taken a hit.
“There”™s a reverse flow in the storage business,” Joyce said. “We just had a huge auction for the first time in 25 years.”
Ron Zahn, CFO of Boston-based Gentle Giant Moving Company, said the recent opening of a branch in Tarrytown, N.Y., was a good decision despite troubles the industry has faced in the past year.
Zahn cited several changes since he began his career in transportation 20 years ago, including the amount of competition, deregulation and “social and economic pressures to be more environmentally sound.”
Zahn said, “Twenty years ago, there were a lot more transportation providers. It was a broad industry. As costs of fuel and compliance increased, those numbers started to dwindle, but the local moving business didn”™t seem to have the same impact; there still are a lot of very good quality local moving companies.”
Zahn said the moving industry experienced much more intervention by the federal government until the 1980s, when more local state regulations ruled the roost, however, “here”™s still an awful lot of regulations in terms of safety compliance.”
A crackdown on pollution caused by diesel emissions required companies to have more environmentally friendly engines, “and that continues on,” Zahn said.
“The motor vehicles are more expensive every year,” Zahn said. “They have to meet higher standards. From a societal standpoint it”™s a good thing, but from a business standpoint, it raises our costs.” Fuel costs have also been a major concern.
“We had cheap fuel for many years,” Zahn said. “As foreign oil became more expensive, most states are reasonable in their allowance of a fuel surcharge, but there are still a few that mandate what you can and can”™t charge. It became so dramatic over the past few years state regulators started looking at it more reasonably.”
Gentle Giant”™s heaviest presence is in New England, although the company has operations all over the country.
“We”™ve felt the pinch materially,” Zahn said. “In the past two years revenues have been off between 15 (percent) to 20 percent. The number of transactions has dropped off dramatically to the tune of 15 to 18 percent, which has a dramatic impact on the bottom line.”
Zahn said the economic horizon appears to be brighter, but it will be a few years before the industry bounces back.
“We”™re poised to continue to grow,” Zahn said. “For the Fairfield and Westchester area, we”™ve solidified our position physically into a nice place in Tarrytown.”
