2021 was a volatile year for the moving industry. The impacts of the COVID-19 pandemic continued to be felt, as movers had to contend with the pandemic’s many ripple effects throughout the year. Plus, thanks to pent up demand from 2020, as well as migration trends, the demand for moving was enormous, and seemed to continue well past the traditional end of peak season. In the meantime, labor shortages limited TSPs’ capacity and a global supply chain crisis caused delays, clogged ports, and drove price increases.
All these challenges are evident in a review of Daycos 2021 DOD HHG billing data. Here were the most dramatic differences we encountered in billing during 2021:
Average Linehaul Increased Across the Board
Compared to 2020, Daycos average linehaul billings increased 8% overall. Domestic invoices saw a 5% increase, driven by a more than 2% decrease in average 400NG linehaul discounts. International linehaul rates were up just under 8%. And the biggest increase was in average unaccompanied baggage linehaul, which increased 33% compared to 2020. Likely there were a number of reasons driving the linehaul increase, including the overall lack of capacity that allowed TSPs to prioritize shipments with favorable revenue potential.
Fuel Surcharges Skyrocketed
America saw a big price hike at the pump in 2021 as prices were up as much as 64% year over year in November 2021. More expensive fuel is directly reflected in TSP’s fuel surcharges versus last year. The number of invoices containing fuel surcharges for linehaul and delivery from SIT more than doubled in 2021 compared to 2020. Fuel is expected to remain at these elevated levels in 2022, so we expect to see continued billing of these surcharges.
Lumber Surcharges Were a New Trend
The price of lumber was a roller coaster in 2021. Prices peaked in May, dipped in the late summer, then rebounded again at the end of the year. The high lumber costs led to USTC authorizing a new billing item mid-cycle, lumber surcharges, as well as increasing crating rates.
Daycos billed over $15 million in lumber surcharges during 2021, as well as approximately $3 million more in crating charges compared to 2020. We will continue to bill the lumber surcharges until at least the end of March 2022, when the current USTC authorization expires. As of now, there is no lumber surcharge in the next rate cycle, and the increase in crating rates was removed, so TSPs may be forced to deal with the volatile price of lumber without the surcharge during the 2022 peak season.
The Uncertain Future of the Port/Terminal Security Handling Surcharge (COF)
Daycos saw more instances of COF surcharges, a charge for security of cargo at the port, during the past year. Daycos saw a 25% increase in number of COF billings compared to the previous year, for a total of over $300K.
This increase is more significant since COF charges are being eliminated in 400NG and IT in the 2022 tariffs, which state that the “Port/Terminal Security Handling Surcharge (COF) and War Risk Surcharge (WAR) must be included in the TSP discounts.” So, this is one DOD billing trend that won’t continue into the new rate cycle.
Increased Costs in 2021
Overall, global pandemic, logistics, and economic factors increased costs across the board for movers last year. There is no doubt that these costs will continue into 2022, but if we’ve learned anything from the last few years, there’s no way to truly predict what the market and moving challenges will be.
As costs for movers increase, collecting every cent becomes more important than ever. Daycos clients rely on revenue solutions to streamline and maximize their invoicing. If you want to cut accounting costs while expediting collections, contact Daycos.