MOVING VANS HAUL LOADS OF TROUBLES JOBS DOWN, BUT COSTS, ILLEGAL RIVALS UP.

Byline: Ryan Furlong 

Staff Writer

During an average month, My American Movers Inc. books about 140 moving jobs.

Now, the Van Nuys-based moving and storage company can barely muster 75, its owner has stopped taking a salary, and the moving and office staffs have been slashed in half.

Along with many other moving and storage companies, My American Movers is discovering that this is no average moving season.

Throughout Southern California, the industry has been hit by the perfect storm: The housing market is down, diesel fuel prices are soaring, and several hundred companies are operating without licensing from the California Public Utilities Commission.

"There are a lot of people having big challenges," said Steve Weitekamp, president of the California Moving and Storage Association. "It's an extremely challenging market."

Weitekamp estimated business in the moving and storage industry is down 30 percent from a year ago, one effect of the mortgage meltdown that hammered the real-estate market.

Home sales in Southern California are at the lowest levels in more than two decades. More than 17,700 homes were sold in May, the most since August 2007, but down by about 36 percent from 26,637 a year earlier.

And with real estate not moving, people aren't moving either.

Ameera Cohanim, a corporate officer in My American Movers, said the lack of work has caused concern among many of her employees.

"Because there is not enough work, there is not enough hours, and they are unable to support their own households," she said. "The movers are worried about supporting their families."

The slow business, she said, has forced some movers to look elsewhere for work.

"When we are slow, they are going to other moving companies for work. But then when I'm busy, I don't have anyone because I'm out of employees."

The soaring price of diesel fuel for moving vans shares blame with the depressed housing market for industry woes. The state average for a gallon of diesel is $5.091, up from $3.181 a year earlier, the Auto Club of Southern California reports.

"With diesel rates, sometimes I'd rather let my trucks sit than go out," said Cohanim, the wife of company owner Danny Cohanim.

She said diesel is costing My American Movers at least $5,000 a month, up $1,500 from a year ago -- a trend that may force it to sell one of its three trucks by year's end.

"We put all the diesel on credit cards. We can't even keep up maintaining the credit card payments," she said. "With the slowdown in moves and the increase in diesel, I don't know if I'm going to be able to stay open till the end of the year."

Weitekamp noted that some companies have diversified into other markets, taking on industrial, commercial, government and military jobs.

Heritage 21st Century Movers, a Torrance-based agent for Mayflower Transit LLC, saw revenue drop 28 percent for the first quarter and 19 percent for the second quarter, compared with a year earlier.

General manager Dave Kearney projects that Heritage, which averages 110 to 150 moves per month, will see a 22 percent drop in year-over- year jobs for the May-August period.

Kearney said Heritage has been able to stay afloat because of its association with giant Mayflower Transit and the nationwide firm's ability to help with out-of-state moves.

"I have the Mayflower side and then the local side," Kearney said. "People moving out of state kept us alive. Movers not associated with a major van line are taking a major hit because they don't have another segment to work."

Heritage took "the biggest hit" in its local market, Kearney said, noting that the number of people moving locally has "really dwindled down to nothing."

Because of soaring fuel prices, he said, Heritage had to double its customer fuel charge from 5percent to 10 percent of the base moving price.

On top of troubles with the housing market and fuel prices, licensed movers also may be undercut by several hundred moving companies operating in the state without proper licensing from the California Public Utilities Commission, Weitekamp said.

"The Internet has allowed the industry to be attacked by scam operators, illegal operators who portray themselves as movers," Weitekamp said. "It's rampant on sites like Craigslist."

Illegal operators sometimes use multiple names, making it difficult to track how many there are throughout the state, Weitekamp said.

Companies operating without a license take away a substantial amount of business from licensed movers because they undercut, sometimes by half, the legal rates charged by licensed carriers, which is determined by the CPUC, Weitekamp said. As a result, consumers are led to believe that a quote for, say, $2,200, from a legitimate carrier is overpriced because illegal operators may have given quotes as low as $1,500.

Weitekamp said illegal operators often have no intention of standing behind their original quote after they have secured a job. He said he can "almost promise" that a consumer will end up paying more to an illegal operator than a licensed carrier.

Consumers will talk to four or five companies under the assumption that each is a unique and individual business, he said.

"Therefore, based on that information, they feel they know what is fair in the marketplace," Weitekamp said. "But they could all potentially be coming from the same illegal operator, running the same four to five illegal companies."

"This is all kind of interconnected," Weitekamp said. "The rampant number of illegal operators in the state, the fuel crisis, the housing crisis: You take one of those out, and legitimate guys can survive."

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CAPTION(S):

2 photos

Photo:

(1) Mynor Garcia works for My American Movers Inc., which has seen moving jobs fall by about half recently.

Andy Holzman/Staff Photographer

(2) no caption (moving van)

John McCoy/Staff Photographer