Exploring New Winter Revenues: Offering Origin and Destination Agent Services in International Moves
By Jeff Nadeau
If you're seeking diversification and a new source of revenue, delving into the world of origin agent (o/a) and destination agent (d/a) services for international moves might be the way forward. To assist you in creating a pricing structure within your company that appeals to potential clients, we have compiled a few straightforward examples.
Traditionally, international moving experts charge for services based on the hundredweight (ncwt). Calculating these rates has often appeared as a daunting task for many movers. However, fear not, as we present some valuable tips to simplify the process. It is important to note that any mention of rates or pricing within this article serves as illustrative calculations and should not be construed as suggested rates for bidding on work.
Establishing a pricing schedule requires a comprehensive understanding of your crew's performance. How long does it typically take your crew to pack, wrap, and load a shipment into a lift van?
For instance, let's consider a 3000-pound pack and load scenario. Most professionals agree that a two-person team could handle the packing and loading a 3000 lb. shipment in approximately 5-7 hours. Let's be conservative and use 7 hours as the basis for our calculation. Assuming a local hourly rate for two men and a truck is $120, we can multiply the hours (7) by the rate ($120) to obtain a figure of $840. This amount covers your street labor.
Additionally, there are other costs to consider. For a 3000 lb. shipment, you would likely require around 30 cartons, paper, and tape, amounting to an average sale of $10 per box (adding $300 for materials). Furthermore, you would need three used lift vans (valued at $100 each), resulting in an additional $300. The process of banding, marking, and forking the lift vans would cost approximately $200. Combining all these expenses, your total service cost would be $1640. To determine the price per hundredweight (ncwt), divide this total service cost by the weight of 3000 pounds.
Considering the need for flexibility, adding another $5 ncwt as a buffer is advisable. This rate accounts for factors such as flights or long carries, which can impact the total time spent on the job. Therefore, using the example, the rate for origin services would be $60 ncwt for international carriers on a shipment of 3000 lbs.
Now, let's explore the same approach in reverse for d/a work. Suppose we have a 3000-pound shipment spread across three lift vans that need to be delivered to a residence. In this case, most professionals agree that a two-person team could deliver, unwrap, and unpack the 3000 lbs. in approximately 4-5 hours. Calculating this at a rate of $120 per hour, we arrive at a figure of $600.
Additional costs to consider include lift van handling (receiving and loading onto a truck) amounting to $200, and debris removal costs of $50. Summing up these expenses, the total service cost would amount to $850. To establish a hundredweight rate, divide this total cost by the hundredweight (850/30), resulting in a per ncwt cost of $29.
To develop your own lift van service tariff, repeat both the o/a and d/a calculations for each weight bracket. Many professionals choose to use 2000 weight breaks. It is essential to always use the lower weight when calculating costs for both origin and destination services. Furthermore, do not overlook the inclusion of additional charges per ncwt for flights, elevators, long carries, shuttles, short-term storage, or any other unusual circumstances.
Lastly, make sure to conduct thorough market research to understand your competition. Striking the right balance in pricing is crucial. Overcharging may render you non-competitive while undercharging unnecessarily leaves money on the table. Adopting a well-informed approach allows you to position yourself advantageously and seize new business opportunities when potential clients inquire about your hundredweight rate.
By incorporating these strategies and considering each client's unique requirements, you can establish a solid foundation for your company's expansion into the realm of origin and destination agent services for international moves.