I-TEAM UPDATE: Movers say they can’t afford to take part in new program
AUGUSTA, Ga. (WRDW/WAGT) - Your I-TEAM is uncovering more trouble with the transition of a private company taking over military moves.
HomeSafe Alliance won the contract worth around $20 billion of your taxpayer dollars, but so far, their program has been plagued with problems and delays.
Our military families are the ones ultimately paying the price, but they aren’t the only ones sounding the alarm.
It’s called the GHC, or Global Household Goods Contract, and in order for it to work, HomeSafe Alliance needs moving and storage companies to participate.
That’s because HomeSafe doesn’t actually move families. It’s a management company, but it appears they might not have enough movers to manage.
“We just can’t do it at this time. We’ve all done our due diligence,” said Inman Floyd with Ellefson Transportation Group.
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The I-TEAM sat down with Floyd at Ellefson, which is an agent for United Van Lines and Mayflower. Seated beside him is Scott Heyman with H&S Transportation, an agent for Mayflower.
“It comes down to money,” said Heyman.
They might work for different companies, but Floyd and Heyman wanted to sit down with the I-TEAM together, ing forces because they say they have the same concerns for our armed forces.
“We don’t know who’s doing the work. We know it’s not us,” said Floyd.
“If we let this go into true peak season, it’s just gonna be a catastrophic disaster,” said Heyman.
We first told you about concerns with HomeSafe Alliance’s new contract when we exposed military families across the country dealing with missed pick-ups and delayed deliveries.
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“A missed pickup, by definition, is a service failure. If we do that in the legacy program, we get suspended for a minimum of 30 days every single time,” said Floyd. “If it happens twice, it may be the death penalty.”
Since the I-Team first began reporting on the military moving under HomeSafe Alliance, the company says it’s taken action to minimize problems.
HomeSafe Alliance turned down two requests for interviews but tells the I-TEAM they are continually improving.
“HomeSafe is taking all the lessons learned and continually improving our systems and processes, including enhancing our customer care operations, updating our technology platform, reshaping our training program for service providers and hiring additional employees,” a HomeSafe spokesperson said in a statement via email. “We look forward to growing throughout this peak moving season.”
Floyd and Heyman say they still can’t make the new program work for them.
Both say it drastically cut their rates while also adding the complications of red tape and confusion over guidelines working with the federal government.
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The I-TEAM spoke with others in the moving industry across the country who also say they can’t afford to do work under this new program. “Movers in general, work on razor thin margins,” said Scott Kelly, president of Suddath’s Government Services. Suddath is a Jacksonville-based company that’s part of a lawsuit suing the Department of Defense over the new program. Suddath lost its bid to take over the program.
“I know it’s expensive to move, but it’s really expensive to be a mover,” said Kelly.
“The average mover lives on 3% to 5% profit margin. It’s very slim margins,” said Bill Lovejoy. Lovejoy owns Republic Moving and Storage in San Diego, California. He’s also the chairman of the Moving and Storage Conference in the American Truckers Association.
They ed Tim Helenthal (CEO of National Van Lines), John Callahan (CFO at Total Military Management), and Katie McMichael (Movers for America) on the same Zoom call.
“My guess is that when they originally submitted the bid and went to the bid process, their expectation was that garnering service capacity was going to be pretty easy,” said Callahan.
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“I think they came with the idea that they had a network, but they’ve lost their network,” said Helenthal.
Like Floyd and Heyman in Augusta, they’re hoping their collective voices can get the attention of top brass and D.C. lawmakers.
“In what world do you have a billion-dollar contract and nobody’s lining up to get the money? I mean, trust me, I want the money. I want to participate,” said Lovejoy. “I just can’t at this point.”
“TransCom had said, you know, ‘We want to get out of the moving business. We are not a moving company.’ So then to give the contract to a large contractor that also does not have experience just strikes me as, as odd,” said Katie McMichael.
HomeSafe Alliance didn’t exist before this contract.
It was founded in 2019 specifically for this contract.
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HomeSafe doesn’t own a single moving truck or warehouse. That’s why it relies on a network of moving companies to do the packing, loading and unloading, and driving.
The moving companies we spoke to said it’s not just rates that have been lowered.
They say other expenses have changed, too. For example, Lovejoy says the new system axed fuel surcharges for drivers that helped to offset the cost of gas.
“My average driver lost $40,000 of income when they did that,” said Lovejoy. “$40,000 a year. They don’t make enough to absorb $40,000.”
So, if those on this call can’t afford to make it work, and Inman and Scott say they can’t either, who is?
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HomeSafe Alliance points to smaller trucking companies but would not give us the name of even one of those companies.
In an email to the I-TEAM, a spokesperson responded with the following: “HomeSafe Alliance has uncovered evidence of anti-competitive activity reinforced by economic threats made against smaller trucking companies to keep them from performing HomeSafe Alliance moves. Service providers have reported they are fearful of doing business with HomeSafe Alliance because of these intimidation efforts. In light of this, some partners have directly asked HomeSafe Alliance not to publicly announce our partnerships. Because building trust with our partners is paramount, we will not publicly share the list.”
Meanwhile, when HomeSafe fails to move a family, for now, movers like Floyd and Heyman tell us they can step in under the old program.
“Happened twice yesterday,” said Floyd.
“Just here,” added Heyman.
However, they warn that they – and other movers – won’t always be there as a Plan B.
“Eventually, people will diversify. They’ll go into other lines of business,” said Floyd.
On Wednesday, we told you a U.S. Senator is now raising concerns, and the Army and Air Force are pulling back on some HomeSafe moves.
While we don’t have an exact number, HomeSafe tells us they were the ones that went to the DOD to request that 21-day lead time.
Now, any moves that need to happen sooner than that, or ones that HomeSafe hasn’t assigned movers to in 21 days, will use the old system.
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