S P E C I A L F E ATURE PRICING POWER YANN BLANDY, CEO OF SANTA FE RELOCATION I have seldom met company cultures that are so strong as in this industry you could wonder if merging such companies is ever going to be successful With the industry as Blandy sees it in a very weak position on pricing power, the only way to achieve better profit is for companies to make synergies on the cost side. Maybe there is something about broadening the offering; there is something about geographic scope... but I would assume that the key driver is cost synergies, he says, referring to the SIRVA BGRS deal. And (to have) the ability to invest in technology. Moving industry consultant Mark Oakeshott is an experienced industry observer with several leadership roles in moving and relocation on his CV. His career began at Pickfords and later included developing the Allied Global Network for SIRVA. He, too, doesnt see any particularly new trends, despite COVID-19. But Oakeshott expects to see more mergers and acquisitions. I dont believe COVID has impacted the trend toward consolidation. The primary change in the last two years is more focus on consolidation in the relocation management segment of the industry, he says. As margins are squeezed, I believe you will see more RMCs combining to achieve synergies. Oakeshott adds: CEOs and investors in large companies will always follow the money. It is unlikely that there will be any significant return on investment through organic growth, so consolidation delivers revenue growth and the opportunity to achieve significant cost savings. 22 FF307 September-November 22 pp20-25 Special feature_mergers and acquisitions.indd 22 BECOMING MORE AGILE This doesnt mean that the international moving market has stood completely still during the last two years. COVID, the subsequent supply chain problems, and more recently the war in Ukraine have obviously impacted the international moving market strongly. Corporate accounts have learned to be more agile and have been forced to re-think their global strategies. Consequently, some previously active geographic markets may never fully recover, says Oakeshott. Despite often being a controlling force in the industry, relocation management companies themselves have had to adapt to the times. I think most relocation management companies understand that the game is over in terms of future wide adoption of the traditional inclusive relocation package, says Oakeshott. By nature, RMCs dislike assets and some are reaching toward talent management (services) to diversify. I sense the smarter strategy may be to stay closer to their core competency in combining relocation and immigration with moving. At Santa Fe, Yann Blandy says some demand for moving has rebounded since COVID-19. Some parts of the world may be back at 2019 pre-COVID levels, with the US domestic (market) remaining very, very strong. But Asia and much of Europe has not fully recovered across all business lines. Price pressure remains very, very intense on movers in the market, but with the rise in inflation we WW W. F I D I FOC U S . OR G 06/09/2022 12:38 DBon