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How To Evaluate a Moving Quote

How To Evaluate a Moving Quote

A quote is a document that sets forth terms and pricing of delivering a service or product. It is an estimate of how much a customer can expect to pay and the assumptions made in that calculation.

A quote includes a set of terms and conditions that state the duties and responsibilities of each party. They define the legal relationship between the moving company and customer and exist to ensure the move goes smoothly.

The problem is the content of a moving quote can vary widely from one company to the other. There isn’t a standard way of presenting pricing and terms. This makes it difficult for customers to do an apples-to-apples comparison.

In this article, you will learn how to evaluate a moving quote effectively. You will learn the definitions of important terms and the different pricing models used by moving companies. You will learn about fees and surcharges and why they shouldn’t be viewed negatively.

We explain why low hourly rates should be viewed with concern and how to vet a moving company that offers them. We also disclose the fees you will find in a PacWest quote and how we think about price transparency.

Hourly Rate

Hourly rate is the amount of money the customer pays for every hour worked. Hourly rate is usually expressed as $130/hr for two movers or $210/hr for three movers. The hourly rate will increase as the number of movers grows.

Moving furniture like sofas, large cabinets, and dining tables require a minimum of two movers. As such, moving companies have what is referred to as base rate. The base rate is the hourly rate for two movers and is usually the starting point for pricing discussions.

Hourly rates can vary greatly between moving companies. There is no shortage of cut-rate moving companies that will tempt you with low hourly rates.

Be careful doing business with these companies because they tend to operate illegally at some level. Do your due diligence first and ask to see their Certificate of Insurance and what tariff they belong to. If they’re unable to produce this information right away, take your business elsewhere.

Cut-rate moving companies offering low hourly rates find other ways to charge customers that may not always be clear. Low hourly rates can be enticing on the surface, but they are usually a red-flag and an indicator of hidden or obfuscated costs.

Movers packing and moving boxes during moving day.
The base rate is the hourly rate for two movers and is usually the starting point for pricing discussions.

Pricing model

The pricing model is the method of how the final price is determined. While there are many types of pricing models across industries, household goods moving companies use two of them – time and materials and fixed price.

Time and materials

With time and materials pricing, the customer pays for the actual amount of time needed to deliver the service at the hourly rate plus the price of any materials used. Materials are products such as moving boxes, tape, and shrink wrap.

Time and materials pricing is the most-commonly used method for local moving. The advantage of time and materials pricing for the customer is it gives them control over the amount charged.

Since the cost of move is based on time, the more items the customer can move themselves the less work the moving company must do. Customers can save significant money by moving smaller items like houseplants, light boxes, and small furniture on their own.

Fixed price

A fixed-price quote, also known as fixed-fee or set-price, has a predetermined cost of service. It includes a set of assumptions that, if adhered to, the customer only pays the set price.

The advantage of a fixed-price quote for the customer is certainty. The customer knows what they will pay before the service is delivered assuming they adhere to the agreement terms.

With fixed-price contracts, the moving company assumes the risk. This increase in risk is typically offset by overestimating time and materials and adding contingency fees. Sometimes these additional fees are conspicuous in the quote where the customer can see them. Sometimes they are hidden from the customer.

Fixed price quotes are uncommon for local moves. They are seen more often in negotiations for long-distance moves where customers have less of an appetite for time-based pricing. 

The advantage of a fixed-price quote for the customer is certainty. The customer knows what they will pay before the service is delivered assuming they adhere to the agreement terms.

Time Estimate

The time estimate is the assessment of how long it will take to complete a move. Mature moving companies create time estimates with software and spreadsheets. Less-mature moving companies create time estimates using “back of napkin” calculations based on the personal experiences of their estimators.

There are two main components to the time estimate – labor time and driving time.

Estimating the labor time takes into account factors such as square footage, stairs and elevators, and walking distance from property to loading zone. Other factors include the number of heavy items, disassembly and reassembly, and how long the customer has lived in the property.

The longer someone has lived in a property the more “stuff” they’ve likely accumulated. More items require more time and effort to move.

Estimating the drive time is done using Google Maps or a similar tool. Modern mapping software makes it easy to look up the driving time between two or more locations. 

Driving time explained

Knowing how the driving time is factored into the cost of move is critical to understanding a local moving quote. Let’s start by breaking down the round-trip drive into segments.

A local move has three driving segments – outbound, origin-to-destination, and return.

The outbound drive is from the moving company’s yard, also known as the terminal, to the point of origin. The point of origin is the customer’s move-out property.

Origin-to-destination refers to the driving that happens from the point of origin to the destination or move-in property. This segment also includes any “stops” between the origin and destination.

The return drive is from the destination or move-in property back to the moving company’s terminal.

A moving truck transport cargo on the road.
PacWest uses origin-to-destination pricing for local moves, and they do not charge for the outbound and return drive time.

Some moving companies charge for the outbound and return drive time. This is called terminal-to-terminal pricing.

With terminal-to-terminal pricing, the customer carries the risk of paying for excessive drive times caused by traffic, weather, and other common types of delays. 

Other moving companies don’t charge for outbound and return drive time. This pricing approach is called origin-to-destination. The customer pays only for the drive time from their move-out property to the move-in property and any stops in between.

Lower hourly rates are usually associated with terminal-to-terminal pricing. These companies can afford to offer lower rates because they are also getting paid for the drive time to and from the customer’s starting and ending locations.

If you are considering working with a service provider that charges for outbound and return drive time, ask them if they “cap” or set a maximum drive time. This is an effective way to avoid runaway costs from excessive driving times.

At PacWest, we use origin-to-destination pricing for local moves. We believe it’s in the customer’s best interest to not charge for the outbound and return drive time. 

While this means our hourly rates are higher than many of our competitors, we accept this because we know it is a better deal for our customers and that is what is most important to us.

Hourly Minimum 

An hourly minimum is the minimum time a customer will pay for. Hourly minimums only apply to time and materials pricing since the cost of service is based on time. They do not apply fixed-price agreements.

Most household goods moving companies have a two- or three-hour minimum. Some companies have a five-hour minimum on the weekends since this is when demand is the highest. 

At PacWest, we have a three-hour minimum Monday through Thursday and a five-hour minimum Friday through Sunday. We do this to optimize our schedules for our customers and employees. It’s one way we attempt to attract customers that truly need professional-grade moving help.

Most household goods moving companies have a two- or three-hour minimum. Some companies have a five-hour minimum on the weekends since this is when demand is the highest.

Deposit

A deposit is a down payment on services to be rendered at some time in the future. A deposit will either be due when the appointment is made or a short time thereafter.

The amount of the deposit will vary from company to company. Some charge a percentage of the estimated cost of services such as 10 percent. Other companies may charge a “booking fee” or “reservation fee” which is essentially a deposit with a different name. 

The purpose of a deposit is to get the customer to commit to the transaction. When a customer books an appointment, the moving company is agreeing to provide resources to fulfill the appointment. They are unable to offer those resources to a different customer.

The deposit requires the customer to put some “skin in the game” and assume financial loss if they cancel the appointment. Before making a deposit, you want to be sure about the decision of which moving company you will hire.

Fees and surcharges

Fees and surcharges are additional charges the customer pays for the service. They come in many different shapes and sizes and usually for good reasons.

Moving companies incur many expenses to deliver their services. In accounting, these are called Cost of Services, Cost of Goods, or COGS.

Cost of Services are the expenses a company incurs to be able to deliver a service or create a product. For moving businesses these include fuel, insurance (auto, cargo, and workers comp), auto lease payments, cost of labor, and payment processing fees to name a few.

Fees and surcharges are a reasonable method for companies to offset some of these expenses and deliver a better customer experience. They provide sources of revenue, albeit small, that help pay for things such as weekend customer support, cargo insurance, and better moving equipment.

Fees and surcharges should always be transparent and explicit in a moving quote. Undisclosed fees the customer is not made aware of before the transaction are called “hidden” or “gotcha” fees. Hidden and gotcha fees are unethical and sometimes illegal.

A picture of fees inside the laptop.
Fees and surcharges should always be transparent and explicit in a moving quote.

Below is a list of common types of fees and surcharges moving companies include in their agreements.

Booking fee

A booking fee is a small amount paid when a reservation is made or “booked”. Similar to a deposit, it is usually non-refundable and meant to deflect unserious customers who are prone to canceling.

Travel fee

A travel fee is compensation paid to the moving crew to cover out-of-pocket travel-related expenses. They are common for local labor-only services where movers use their personal vehicles to get to and from the job site. A travel fee is a way of compensating the movers for their time, wear and tear on their car, and fuel.

Mileage fee

A large percentage of moving companies lease their trucks from companies like Penske and Ryder. Terms of the lease agreement include fees for every mile driven usually ranging from five to fifteen cents per mile.

Some moving companies use mileage fees to pay for this expense. In cases like these, the mileage fee should be the same (or close to) the amount the moving company is charged.

Other moving companies use mileage fees not only to cover the fees they pay for each mile driven, but also in lieu of charging an hourly rate for drive time. Using mileage fees in this way is in the customer’s best interest. Rather than pay for drive time which can fluctuate, they pay for distance traveled which is finite.

Fuel surcharge

From August 2020 to August 2022, the average cost of gas in the United States rose from $2.25 to $4.21. Increases in the cost of gas hit moving companies hard since they are an unavoidable COGS expense. A fuel surcharge helps offset this expense.

Payment processing fee

Credit and debit cards are a convenient way to pay for goods and services. However, there is a cost for this convenience called a payment processing fee.

A payment processing fee usually ranges from 3.0% - 3.5% of the purchase price. If your moving quote includes this type of fee, the moving company is asking the customer to pay for this fee. 

PacWest Disclosures

PacWest Moving believes pricing transparency is the best way to do business with our customers. We pledge to never charge hidden fees and surprise customers when it comes to the amounts we charge. In alignment with this commitment, below is a list of the fees and surcharges you will see in our moving quotes.

  1. PacWest Moving charges a non-refundable $30 booking fee for local moves.

  2. PacWest Moving requires a non-refundable 10% deposit for long-distance moves. There is no booking fee for long-distance moves.

  3. PacWest Moving charges a no-markup travel fee for moves with a driving radius greater than 25 miles. The travel fee helps us pay for the costs of fuel and vehicle lease mileage fees.