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Bad weather is here and will likely continue for several more months. There are lots of weather risks for moving & storage companies, but this article will only deal with water and flood damage.

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Happy New Year! Hard to believe 2019 is here already.

January is a good time to review your storage receivables and see how many of your customers are past due in their payments – you probably have more than one or two. What can you do?

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Now that the busy season is winding down, it’s time to look at some important paperwork issues that may have fallen to the bottom-of-the-pile while you were focused on handling your customer’s needs.

The SIT conversion process is important because if you don’t have the correct paperwork on file, your insurance may not provide coverage in case of a loss.

Besides insurance, there are a few other reasons that a Bill of Lading stapled to inventory sheets (instead of a real Warehouse Receipt) might get you into trouble:

  • Without the proper Warehouse Receipt, you are legally unable to foreclose on unpaid storage lots and auction them to cover your unpaid charges;
  • You might not be able legally collect storage fees once the SIT period has expired unless you have a Warehouse Receipt and/or Storage Contract.
  • If the shipment came into your warehouse under a van line Bill of Lading, how do you advise the customer of the change? What is the van line’s continuing responsibility?

What should you do?

  • You should have a standard letter (or email) and procedure in place advising the customer of the change, confirming the same valuation option, presenting the new Warehouse Receipt/Storage Contract, and billing for the new monthly storage charge.
  • If there was no set delivery-out date when the shipment came into your warehouse, convert to permanent storage as soon as possible.
  • When there is a designated delivery-out date, confirm with customer at least 30 days prior.

See some sample forms at at the bottom of the educational material section. Contact me with any questions.

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A new California law goes into effect in January 2019 that makes the company hiring an independent contractor liable for labor law violations. (Senate Bill 1402)

This law specifically applies to those truckers hauling containers out of California ports. This law is aimed at making retail companies (Target, Home Depot, Amazon, etc.) along with trucking companies liable for unpaid wages and other expenses not reimbursed to the contract trucker. (Expenses such as medical costs resulting from on the job injuries.)

If you don’t haul freight out of California’s ports, how could this affect movers? Well, consider the following –
Several years ago, California made homeowners liable for workers compensation benefits if their residential workers were injured, but not otherwise covered by workmen’s compensation. This was intended to cover housekeepers, gardeners, baby sitters and other occasional household “help”. Now every California homeowner’s policy contains a coverage called “California Workers Compensation-Residence Employees”, and all policies include a charge for this extension even if homeowners have no household “help”.

If a moving company dispatched contractors for a move and one of these people were injured at the residence, would the homeowner be liable for workers comp benefits for that injury? Considering California’s efforts to eliminate independent contractors in the transportation industry, this does not seem impossible. Remember that California now has a ban on plastic straws and a ban on sugary drinks in kid’s meals.

California shippers might now need to ask questions on the employment status of the individuals conducting their move.

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Now that the busy moving season is starting to wind down, hopefully it has been a profitable season for your moving & storage business. As the end of the year approaches, planning for the future is on everyone’s agenda. Protecting your company using standardized procedures and explanatory documents are important items to be consider in your future planning. Some of this new content might help!

Although most of the questions I receive are about valuation or claims, I also get questions from moving companies on how to find information, what forms to use in unregulated states or for unregulated operations, how to handle storage and SIT conversions, what warehouse insurance amount is best, and other topics. I have worked with individual companies to develop forms and procedures, but it has been pointed out that some of these may have broader applications.

At the bottom of the Educational Materials page on my website there is a new “Move-Pak Information Resources” section with articles, charts and forms that are free to download. Some of these may be useful for your business and might be incorporated into your current procedures.

In conjunction with a moving-specialty broker, I recently recorded some training-issue videos. I hope to have these on the website later this month.

Let me know if these items are helpful and what other topics might be included.

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Many local, regional and interstate moving companies use contract drivers. This business model has resulted in lower operating costs for movers and the flexibility to deal with seasonality of the moving business. In recent years, however, use of contractors has been under increasing scrutiny from state and federal authorities.

It has been alleged that contractors have been “mis-classified” and should be treated as employees. In most jurisdictions contractors must meet certain criteria (or tests) to be treated as independent businesses and not as employees.

A recent California Supreme Court decision (Dynamex Operations West, Inc. v. Superior Court)* has further limited the contractor-employee definition. The decision essentially places the burden on the hiring entity to establish that the worker is an independent contractor and meets the factors in the new “ABC” test.

A: An independent contractor must be free from control and direction of the hiring entity.
B: An independent contractor must perform work that is not provided by the company’s employees.
C: An independent contractor must be an established business (not just established at the request of the hiring entity).

What does this mean? For California companies, compliance with California Wage Orders could be difficult if contractors allege they are being “mis-classified”. Because California standards often make their way into the rules and regulations of other states, future compliance in all states could be an issue.

What are the unknown future financial risks? Your workers compensation insurance company could re-audit past policy years changing contractors to employees ($$). State or federal regulators could demand payment of payroll taxes for mis-classified employees ($$$$).

Any moving company using independent contractors should review their individual risks and rewards of the contractors-employee issue.

*The complete Fisher Phillips Legal Alert can be seen on my website at the bottom or the Education Materials Section

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If you haven’t already seen an increase in your commercial auto liability and physical damage premiums, you should see some increase in the near future. There are a number of factors behind this change:

  • The number of auto fatalities went from a low of 32,479 in 2011 to 37,461 in 2016.
  • Juries are holding commercial drivers to a higher duty of care when deciding awards in litigated auto claims; the overall trucking industry has recently seen jury awards as high as $20 to $40 million. Average settlements for bodily injury and property damage losses have increased by over 50%.
  • As a group, insurance companies providing coverage for the commercial trucking industry had an underwriting loss of $9.7 billion from 2012 to 2016.

All of these factors result in higher premiums. What can you do? More safety training? More stringent driver hiring guidelines? Both of these are difficult when work is increasing, and qualified driver availability is decreasing.

The collision avoidance technology now available in most new cars must come to the trucking industry – automatic braking, blind spot monitoring, lane warnings, etc. Also helpful are the driver behavior monitoring features that can be found bundled with many ELD systems – such as speed monitoring, GPS, hard turns or braking, etc.

360 degree recording cameras can not only help drivers maneuver in tight streets and driveways but can also record what your driver actually did when an accident occurs. In court, a picture really is worth a thousand words!

Budget for premium increases, but also budget for the technology improvements that are your best defense for future cost containment.

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Lately many of us have been bombarded with political advertising of one sort or another. These political advertising and public relations people tell us that negative ads are not as successful as positive ads. The negative ones just make more people angry than the number of people persuaded by these kinds of ads.

And yet most of the local or national public relations campaigns for the moving industry are negative! Mostly they are about the awful nasty evil “bandit” movers and how consumers should be warned to stay away.
Unfortunately, with the short attention span of most people looking at advertising these days, they may just come away with the “awful nasty evil movers” message.

Let’s face it, there are bad actors in all sorts of services to homeowners – plumbers, contractors, roofers, landscapers, etc. Do the ads for those industries talk about the bad guys? (Well, maybe there are some complaints about plumbers exposing too much of their backsides.)

Why not publicize the best parts of our industry? Like those convoys of moving trucks taking supplies to residents in disaster areas…Like the movers who help residents get their valuable possessions out of the way of fires or floods…Like “Move for Hunger” … Like storing and delivering millions of Girl Scout Cookies every year…Like the industry commitment to Special Olympics and other charities.

There really are lots of wonderful examples highlighting the moving Good Guys and Gals; so let’s brag about these and let the bandit or pirate movers get their own publicity – hopefully on wanted posters.

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In the past few weeks I have received questions about regulatory filings and what types of companies need to apply for and receive state and federal authorities or numbers.

  • Do intra-state only moving companies need to have a federal DOT number?
    • There are now 36 states that require intra-state carriers to have DOT numbers.
  • Which states require household goods carriers to secure a state permit or authority?
    • As far as I have been able to determine, there are 38 states regulating household goods movers.
  • Are there states with zones or areas exempt from household goods regulations? What exactly are “exempt” zones?
    • I found ten states with some type of exempt zones.
  • Are there states that require movers to verify coverage for Workers Compensation or General Liability insurance?
    • Yes
  • Do any states require cargo insurance limits higher than the Federal $10,000 limit for household goods carriers?
    • Yes, seven states

Lots of important questions, but how do you find the answers? Well, hours on the internet; and after that verifying that the information found on one site is accurate. Also, of course, the rules change as states formulate new regulations.

Within the next month there will be a new section on my website containing summary charts of answers to these questions. I will not guarantee 100% accuracy, but the charts represent my best effort to find the correct information. If you download these charts when they are available and find errors, please notify me as soon as possible so that the charts can be updated with the proper information.