Global Mobility: Weight versus fair pricing in shipping of household goods
Weight is the determining factor in pricing the transportation of goods. Unfortunately, it is rarely accurate and often results in unfair pricing. Could a more precise and transparent method to be used?
My father recently died at the age of 91, having had a rich life. He was with the Canadian army overseas after WWII and worked with GE Canada for 41 years. We had a wonderful relationship, and during my teens, we often talked about his work as a Purchasing Manager. It never occurred to me that, years later, one of his anecdotes would impact how I saw the business of moving household goods.
When my father was tasked with arranging the shipment of very large aluminum bus ducts produced at the GE plant to the James Bay Hydro project, he was dismayed to learn that the transport company used weight as the basis for pricing. To my father, the weight was irrelevant. The bus ducts were not very heavy in comparison to their huge size. Getting something of that size to its destination without incident and at a fair price was what he was looking for. Where did the weight fit in?
Years later (1997), at the request of the Auditor General of Canada, I gave a presentation to representatives of the moving industry on the need to update the basis on which the cost of moving household goods is calculated. Weight, a seemingly accurate form of measurement, can easily vary depending on how, where and when the weighing occurs. So why do we continue to use this arcane pricing method for packing, unpacking, transportation, and RVP of goods?
In that same presentation, I suggested finding creative ways to establish price, including using other factors such as the number of rooms or number of windows. The pricing would obviously involve averaging but at least it would be explainable and verifiable. I could feel the participating members of the industry throwing imaginary tomatoes my way; I had likely hit a nerve.
If the moving industry insists on keeping weight as the basis for calculating price, then controls must be put in place to ensure reasonableness and improve accuracy. Some examples:
– Light and heavy weights must be assessed at origin, on the day of loading, using the same certified scale that prints confirmation tickets.
– Weigh scale tickets must accompany the invoice as justification for the cost.
– Periodically, constructed weights based on the inventory lists should be compared to actual scaled weights.
If the industry does not feel the need to tighten the weighing procedures, then weight should be removed as the determining factor. A more transparent and accurate formula should be adopted.
For instance, price could be based on the square footage of livable space in the home, including basement and storage. Granted, some people are minimalists and others have accumulated lots of stuff, but on average, square footage could work. Don’t like averages? One could use volume instead of weight, while ensuring that movers do not use shipment inflating tactics such as “padding” the box.
So, what is holding the industry back? Is weight-based pricing just too convenient? Is it “it’s always been this way” thinking? What will it take to change?
Decades ago, my father thought weight was the wrong way to go. He was right and that’s just one of his many pearls of wisdom…