Shipping companies take advantage of slump

When Tom Fiepke, a partner in the audit group of U.S. accounting firm Ernst & Young, accepted a post in Warsaw last year, the move from Columbus, Ohio with his wife and four children filled him with uncertainty about life in Poland and whether the family would be able to adapt.

To help the Fiepke family settle in, Ernst & Young hired Polish moving firm Universal Express, which organized a week-long trip to Warsaw in October 2000 that allowed the couple to get a first impression of the city. Universal Express also arranged for the Fiepkes to see their children's school, showed them a number of houses for rent and gave them advice on the best choice of car for Poland. "We were very concerned how all this would roll out," Tom Fiepke said. "We looked at about eight houses, which was plenty to help us decide that everything was fine on that point."

Eight months later when the Fiepkes decided to make the move, Universal Express arranged for another visit, during which the couple bought cars and rented a house and the family moved to Warsaw in August this year. "Everything went fine," Fiepke said. "The toughest part was living out of a suitcase for eight weeks after putting our stuff on the boat to Poland, apart from that it's been a very enjoyable experience."

Forwarding companies are moving beyond their traditional business of door-to-door shipping of household effects to value-added services such as preview trips, visa and immigration arrangements, home and school finding services, hiring household staff and providing training for survival in a new destination.

Wojciech Zachorski, corporate services manager at U.S. firm Crown Relocations in Poland, said globalization means that multinational corporate clients are increasingly looking to relocation companies with local knowledge to provide a one-stop shop that can make all necessary arrangements to transfer their top executives between countries. "The idea is to deliver a focused, productive employee by helping the transferee and their family to settle into their new home," Zachorski said. Crown Relocations has seen steady growth in its business, from 205 moves in 1998 to 430 in 2000, and Zachorski predicts more this year. "There are more expatriate employees leaving and coming to Poland, but there are also more Poles leaving the country on foreign contracts with international firms," he said.

According to Stefan Hildt, managing director of Universal Express, the relocation industry is mainly benefiting from the decline of global markets, which is making companies cut back on their expatriate staff to reduce costs. Although the company's total number of moves fell slightly from 2,481 in 1991 to 2,252 in 2000, Hildt expects an improvement in this year's results. "If there's a recession, movers will benefit in the short run because companies begin to pull out," Hildt said.

Moving firms are concerned that the attacks on New York's World Trade Center in September and the war in Afghanistan, which have resulted in growing unease about air travel among the business community, will lead to a fall in the number of relocations to Poland. "U.S. citizens do not want to fly," said Marek Cibor, managing director of Anglo-American moving firm Allied Pickfords, whose main markets include the U.S., Canada, U.K., Western Europe and the Far East.

"The business people who do relocate prefer to do so without their families," he said. With business people traveling alone, the demand for relocation services aimed at families, such as school searches, is set to decline. Cibor said that the fall in demand for relocation services could further increase price competition between moving companies, which he said resulted in a 20% fall in prices during the past two years. This eats into the profits of smaller companies, for which international moves are becoming increasingly important. Dutch moving firm Corstjens, on the Polish market since 1999, has also had its number of international moves grow by about 10% in 2000 compared to 2001, said Piotr Dmowski, the company's general manager. "Our total number of moves was less this year," Dmowski said. "But international moves have become a bigger part of our business."

But according to Hildt, whose company deals mainly with U.S. clients, the events of Sept. 11 will not significantly influence the results of moving companies for 2001 as the majority of moving contracts take place in the summer, to prevent them interrupting the school year. "The September attacks came too late to affect the moving business this year," Hildt said. "It is too early to tell what their outcome will be - people may be more willing to accept foreign assignments because they will feel safer outside the U.S."

Greg Goodale