1

AMSA and Industry Update

CPPC 2010 Spring WorkshopOakbrook, IL

April 30, 2010

Linda Bauer Darr, President & CEOAmerican Moving & Storage Association

2

AMSA And Industry Update• The Past: The “Golden” Years

• Today– The influencers: Housing and the Economy– The Market: How We are Responding as an Industry

• AMSA and the Industry: Creating our Future– Government Challenges & Response– Litigation– “ProMover-izing” our Industry Image– Stretching and Strengthening the Canvass

• Conclusion

3

The Past – “The Golden Years”

Size and Shape of the Industry

• 8,100 companies doing 16.5 billion annually at 17,000 locations (2007)

• 96% of businesses are small local businesses that earn less than $10 million annually and account for 72% of all industry jobs.

• 84% are micro-businesses – less than $1million

• In 2006 nearly 40 million people (14% of the U.S. population) moved

4

Today

• Only 11.9% of Americans moved in 2008 (versus 14% in 2006), a record low, down 3.5 million households

Times have Changed

5

• Housing, housing, housing

• Mortgage crisis

• Economic meltdown

• Stubborn unemployment

Data from Industry Trends, AMSA’s quarterly data publication

Today The Influencers: Housing and the Economy

6

Today The Influencers: Housing and the Economy

A Mixed Bag

• The housing market continues to fluctuateDifficulty in obtaining financing has

scared off some buyersLow prices, tax credits and low interest

incentives not attracting as manybuyers as predicted

• New home sales are still down, used home sales are up slightly, inventory (currently) down

7

Today The Influencers: Housing and the Economy

Mixed Economic News(as of April 8, 2010)

• The economy is growing: GDP rose 5.6% in 4th quarter (up from 2.2% in 3rd qtr)

• Fastest pace of economic growth in 6 years

• But still….overall GDP shrank 2.4% in 2009, worst drop since 1946

8

Today The Influencers: Housing and the Economy

• New focus = small business and middle class (response to anger over Wall Street bailout)

• Offer of $33 billion plan to boost small business during SOTU speech

• How it works: $5,000 tax credit for each new hire this year; capped at $500,000 per company.

The Obama Factor

9

Today The Market: How are we Responding

Traffic TypeCorporate Acct. -26.5%COD -10.7%GSA + 0.3%Military - 2.0Total -14.8%

Shipment Volume ‘09 vs.‘08

10

Today The Market: How are we Responding

Traffic Type Jan-Mar 2010 vs. Jan-Mar 2009

Corporate Account - NAC - 13.6%

Private Transferee - COD + 1.6%

GSA - 18.9%

Military + 6.9%

Total - 3.5%

Shipment Volume since 2009

11

AMSA Federal Legislative and Regulatory Update• The current Environment and Plan for Progress

– Despite health care reform win, most major legislation stymied

– Need for AMSA to pursue both legislative and regulatory victories

– Strong relationship with new FMCSA leadership

AMSA and the Industry: Creating Our Future Government Challenges and Responses

12

AMSA Federal Legislative and Regulatory Update

• Impact of Health Care Reform on Business– Employers with 50+ employees must provide minimum

coverage– Employers must cover 60% of cost of minimum coverage– State-based health care exchanges created to obtain

affordable coverage; subsidies and credits also available to small businesses

– Penalty of $2,000 per employee for non-compliance

AMSA and the Industry: Creating Our Future Government Challenges and Response

13

AMSA Federal Legislative and Regulatory Update• Surface Transportation Reauthorization

– Highway and bridge programs extended until end of 2010

– Additional revenue is needed to fund programs and support Federal Highway Trust Fund

– Increase in federal gas and diesel taxes probably required; unlikely to be supported by Obama and Congress prior to November 2010 elections

AMSA and the Industry: Creating Our Future Government Challenges and Responses

14

AMSA Federal Legislative and Regulatory Update

• AMSA Consumer Protection Proposals

– To deal with rogue mover problem, AMSA is proposing strengthening federal entry, enforcement and consumer education

– Members of House and Senate showing strong support

– Held up by delay in Surface Transportation Reauthorization

AMSA and the Industry: Creating Our Future Government Challenges an Response

15

AMSA Federal Legislative and Regulatory Update

AMSA and the Industry: Creating Our Future Government Challenges and Response

• Pursuing FMCA regulatory solutions to parts of consumers protection proposals

– Strong and cooperative relationship with FMCSA leadership

– FMCSA Moving and Storage industry briefing at AMSA

– Administrator Ferro keynote speech and meetings at AMSA Conference

16

AMSA Federal Legislative and Regulatory Update

• Hours of Service– FMCSA reviewing current hours-of-service requirements– Tightening of HOS rule likely– AMSA supports current rules

• EOBR Mandate– Electronic-on-board recorders required for carriers with pattern of hours-of-

service violations– Possible EOBR mandate may expand to include all commercial motor vehicles– AMSA considering policy position and comments to FMCSA

AMSA and the Industry: Creating Our Future Government Challenges and Response

17

AMSA Federal Legislative and Regulatory Update• Distracted Drivers

– FMCSA proposed rule would ban use of electronic texting by commercial truck and bus drivers

– AMSA developing supporting comments – Ban likely to extend to other electronic devices….cell phones, etc

• Immigration Reform Legislation– Uncertain if Congress will debate this issue in 2010…too controversial– AMSA supports H-2B VISA Reform

AMSA and the Industry: Creating Our Future Government Challenges and Response

18

AMSA Federal Legislative and Regulatory Update• Climate Change

– Controversy with greenhouse gas emissions reduction proposals

– House-passed bill - bad news for trucking …increased costs, fees and operating restrictions

– Senate considering approach that would impose new tax on fossil fuels (gasoline & diesel)

– Fossil fuel taxes make it difficult to also raise revenue to fund highways and bridges

AMSA and the Industry: Creating Our FutureGovernment Challenges and Response

19

AMSA Federal Legislative and Regulatory Update

• Card Check Legislation– Not likely to be tackled by Congress in 2010…too controversial

• Independent Contractor Classification– Legislation introduced in both Senate and House, but unlikely to

advance in 2010– IRS launched nationwide crackdown on misclassification of

independent contractors– Crackdown may show widespread abuse– May see a difficult legislative fight in 2011

AMSA and the Industry: Creating Our FutureGovernment Challenges and Response

20

MoveDef• Class Action Lawsuit Alleging Antitrust Violations

– Strong Defense needed to protect the Industry’s future– $426,780 Spent on legal expenses through February

• What is MoveDef?– Legal Defense Fund established to fight costly litigation– Under leadership of Morrie Stevens, Sr. MoveDef Chairman– Need to raise $2 million

• 110 Commitments from members and nonmembers• $229,231 Committed to date (over the next three years)• $117,622 Collected to date

Need everyone’s help to protect the industry and AMSA against currentand future litigants

AMSA and the Industry: Creating Our FutureLitigation

21

A carrier which: • Is accepted and recognized by AMSA as having quality, professional

and ethical standards

• Meets all our business standards, and has signed an agreement to uphold our Code of Ethics

• Pledges to work to improve the image of the moving industry and put an end to unethical practices

Where We Are Headed –What is a ProMover?

AMSA and the Industry: Creating our Future“ProMover-izing” our Industry Image

22

What does it take to become a ProMover?All members are screened annually against a seven-point standard:

• No applicable felony convictions by company officers

• Verification of ownership with state corporation commission

• Compliance with federal licensing and insurance regulations

• Acceptable Better Business Bureau rating

• Clearance by state moving or trucking association where available

• Web site reviewed for improper advertising or claims

• Past performance checked against AMSA and other databases

AMSA and the Industry: Creating our Future“ProMover-izing” our Industry Image

23

ProMover: AMSA’s Focus and Future

• 200 members expelled in 2008, 24 expelled in 2009, 7 to date in 2010

• Expansion to include intrastate movers under development

• Follow-on “Star Program” under development

AMSA and the Industry: Creating our Future“ProMover-izing” our Industry Image

24

Promoting ProMover AMSA has been receiving earned media coverage…

…but has been successful with paid media, as well:

May 2009 USA Today ad series

Congress Daily

AMSA and the Industry: Creating our Future“ProMover-izing” our Industry Image

25

2010 Marketing Campaign Underway• Use National Moving Month (May) to launch efforts

• Two full-page USA today ads running in May – focus on “Trusting” Your Move to a “ProMover”

• Toolkit for movers to promote ProMovers status– Ads and public service announcements– Op-eds for local placement– Flyers to distribute to prospective customers in sales packets– PowerPoint to educate consumers on how to avoid rogues– More to come over summer

AMSA and the Industry: Creating our Future“ProMover-izing” our Industry Image

26

Crisis = Change=Rejuvenation

AMSA and the Industry: Creating our FutureStretching and Strengthening our Canvass

27

• A New Strategic Direction = Strong AMSA/Strong Industry

• Strong Advocacy

• A Respected Credible Brand

• Inclusiveness to Serve an Increasingly Diverse Industry

AMSA and the Industry: Creating our FutureStretching and Strengthening our Canvass

28

Change• Van-lines investing more heavily in container business – Unigroup and PODs, Atlas and

SmartWay

• New strategies for containerization - My Move Option (ProMovers, Fedex, etc.)

• Litigation Challenge Continues

• Environmental and Labor Challenges

• Military implementation of DP3, BRAC

• COD customers looking for more and different methods of DIY

• Corporations moving to lump sum and hire local policies

AMSA and the Industry: Creating our FutureStretching and Strengthening our Canvass

29

Conclusion

ProMover is our focus and ProMover is our future

• Separate the wheat from the chaffe

• Build quality service customers expect AND pay for

• Regain lost market share to DIY resulting from rogues

• No more beatings in courts, state houses, or capitol hill because they understand we are the solution, not the problem

30

Thank you

• AMSA thanks you for the opportunity to be here with CPPC members and for all your hard work and dedication.

• Check us out at www.promover.org