Expensive and Delayed Shipments
The landscape for shipping was already bad when the Ever Given got stuck in the Suez Canal. The pandemic had already caused a shipping container shortage, driving up the cost of shipments worldwide. The recent Suez Canal blockage will presumably only add to the misery of expensive and delayed shipments. The timing for the mobility industry could not be worse.
We are hopefully soon to open the floodgates on a large backlog of assignments and transfers. Many companies report they have a queue of employees ready to be deployed as soon as immigration and other restrictions are lifted. As some key talent-sending and -receiving locations – such as the U.S. and U.K. – are coming closer to inoculating larger portions of the populations, that possibility is looming closer. With talent to be deployed, household goods shipments will increase as we relocate the employee and their families, only adding to the shipping delays and higher costs we are experiencing.
Flexibility with Global Mobility
But does it have to be that way? This is when mobility can flex some of the creativity it leveraged during the original crisis the pandemic caused. Shipping household goods is not the only option we have. Here are some examples of where we can be nimble to help get around this hopefully temporary shipping issue.
Provide a Furniture Allowance – Even before the pandemic, it had become increasingly common to offer the employee a choice of a household goods shipment or a cash allowance to rent or to buy furniture. This option has been well received by employees who welcome the choice, especially if they retain their home country property and need the furniture to stay at home. During this shipping crisis, an employee may prefer not to have to endure delays of their shipment which could prevent them from taking up residence in the destination location.
Using the U.K. and Singapore as an example, the AIRINC furniture allowances for a family size of 3 are USD 10,741 and USD 13,915 respectively. Given this option would only need to be paid once at the start of the assignment, this option could be cost effective vs. a shipment which is given at the front and back end of the assignment.
Provide a Furnished Housing Budget – Help the employee secure a furnished rental. Instead of providing a housing budget that is for an unfurnished unit, provide a furnished housing budget.
In some markets there is little difference. For example, in the U.K., 1-2 bedroom apartments are commonly available furnished for the same cost as a furnished unit. Larger units are possible furnished for only about 5-10% more than their unfurnished counterparts.
In other markets, there might be a bit larger difference. For example, in Singapore a fully furnished unit typically runs 10-20% higher than an unfurnished unit.
Not all markets have fully furnished offerings, but where it is possible it is worth considering as an alternative.
Extend Your Temporary Living Days – If shipping is the only or preferred option, be sure to set realistic expectations with the employee. Due to delays in shipping, the employee may need to stay in temporary accommodation for longer than the typical 30 days. Work with your temporary living provider to find the employee and their family a unit that may offer comfort and be available for a longer than normal stay. During this shipping crisis, don’t consider a stay beyond 30 days an exception. Plan for these possibilities and make it easier to authorize a longer stay.
As we begin to emerge from the pandemic, there will be bumps along the way. The shipping situation is just one example of some of the new challenges we may face. Creativity, flexibility, and patience will be needed!
Contact us to learn more about shipping and furniture allowances.
