There have been profound changes occurring in the moving industry over the past decade, driven by economic shifts, rising urban housing costs, and the impact of global events like the pandemic. In a candid interview, Lior Rachmany, the CEO of Dumbo Moving, reflects on how the industry has transformed, the challenges faced by businesses, and the role technology will play in shaping the future. From rising operational costs to the push for eco-friendly solutions and competition from growing rivals, the moving sector is at a pivotal moment, grappling with change while looking toward innovative solutions.
As a veteran in the moving service world, what has changed in the last decade in terms of moving?
Over the last ten years, particularly since the onset of COVID-19, there have been substantial shifts in the moving industry. One of the most notable changes has been the sharp increase in rental costs in major cities, which has significantly impacted the volume of relocations. Fewer people are moving due to these rising housing costs, making it more difficult for individuals and families to afford to relocate.
Additionally, in cities like New York, developers are facing more stringent regulations and increased demands for resources, which has reduced their incentive to build new high-rise developments. This shift, coupled with the reduction or elimination of certain tax benefits, has slowed new construction projects, leading to fewer housing transactions overall. As a result, the moving industry has seen a noticeable decrease in activity in these high-density urban areas.
What are the biggest challenges that (you, as a CEO) are facing in this shifting economy?
One of the primary challenges is navigating the delicate balance between rising operational costs, driven by inflation, and the ongoing demand from customers for lower prices. As inflation pushes expenses higher, including labor, materials, and logistics, it becomes increasingly difficult to maintain profitability while still meeting customers’ expectations for affordability. Striking this balance is critical but remains one of the most pressing obstacles in today’s economic landscape.
What is a trend that you are surprised by in terms of moving?
I’m particularly “surprised” by the growth of some of my competitors. Despite the overall decline in household moves across the industry, these companies are investing significant resources to expand. It’s puzzling, given that many moving companies, including my own, are seeing reduced demand. From what I’ve observed, this concern is shared by the majority of businesses in the sector.
Do you think the moving company is on the cusp of a significant transformation driven by technology?
I believe the industry is at a crucial juncture where it must undergo substantial corrections. Currently, predatory pricing practices are prevalent among some competitors, which not only undermines fair competition but also contributes to unsafe conditions, such as increased auto and worker accidents. Additionally, these practices can lead to discrepancies in customer service and foster dishonest, anti-trust behaviors across the sector.
However, technology has the potential to drive significant positive change in the moving industry. Innovations such as real-time tracking systems, automated inventory management, and enhanced customer relationship management tools can improve operational efficiency and transparency. Implementing these technologies could help standardize pricing, reduce the likelihood of accidents, and enhance overall customer experience. By embracing technological advancements, the industry can promote ethical practices, ensure safety, and ultimately provide better customer service while fostering a more competitive marketplace.
Is eco-friendly moving sustainable, or is it more of a publicity stunt that some companies pretend they are doing?
While there are certainly some elements of eco-friendly moving that can be considered sustainable, the overall effectiveness of these initiatives is debatable. For instance, rising prices for parts and fuel for traditional trucks present significant challenges. Electric trucks, often touted as a sustainable alternative, currently face limitations that hinder their viability as a comprehensive solution. For example, the infrastructure for charging, battery range, and initial costs can be substantial barriers.
Therefore, while companies may promote eco-friendly practices as part of their branding, it is crucial to evaluate the practicality and impact of these initiatives. A more genuine commitment to sustainability would involve addressing the broader systemic issues within the industry rather than relying solely on marketing strategies that may not deliver substantial environmental benefits.
How is Dumbo Moving preparing for the future as the industry continues to evolve?
Dumbo Moving is proactively preparing for the future by developing innovative features within its Customer Relationship Management (CRM) system. These enhancements not only improve our operational efficiency but also help us stay competitive in a rapidly evolving market. Recently, we have faced challenges from competitors who attempted to replicate elements of our proprietary technology. However, we have successfully secured court approval for copyright infringement, officially recognizing Dumbo as the rightful owner of these unique features.
This legal victory strengthens our position in the industry and reaffirms our commitment to innovation. As we continue to enhance our CRM, we aim to provide superior service and streamline processes, ultimately ensuring that we remain at the forefront of the moving industry as it adapts to new challenges and opportunities.
What is one mistake that you wish you didn’t do as the CEO of Dumbo Moving?
One of my significant regrets as CEO is not protecting the secrecy of our cutting-edge technology that we have at Dumbo Moving. Despite signing NDAs, a few employees attempted to replicate our innovations and create their own brands.
Although I have always prided myself on being generous and supportive, this experience has come at a considerable cost. To all innovative CEOs out there: being at the forefront of your industry can be a lonely place. Many will covet what you have, so it’s crucial to maintain vigilance and protect your intellectual property. Balancing generosity with caution is essential to safeguarding your achievements and ensuring continued success.
Is it true that small and niche movers have more flexibility to provide more personalized customer service than bigger moving companies like Dumbo Moving?
To some extent, this is true. Smaller and niche movers often have the agility to offer more personalized customer service, tailoring their services to meet specific client needs. However, it’s important to recognize that the moving and real estate industries are currently experiencing a recession, resulting in decreased demand across the board.
Furthermore, niche markets such as art and piano moving are increasingly being absorbed by larger companies. These bigger firms possess the resources and experience necessary to effectively serve these specialized markets, enabling them to provide similar levels of personalized service while benefiting from economies of scale. As a result, while small movers may still have certain advantages, the competitive landscape is evolving, making it challenging for them to maintain their unique position.
Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.
