The "Race to the Bottom" of Price Competition for Moving Companies in Japan

Almost as soon as I asked for quotes, my phone was buzzing with inquiries from half a dozen moving companies, big and small, national and local. Many immediately wanted to visit my apartment to see how much stuff needs to be moved to the new apartment, and to give a quote in person. The fastest visit happened within 30 minutes of my initial inquiries for a quote. The salesmen (and yes, they were all men) proved to be relentless even in the days after, sending follow-up emails and newsletters, just in case they did not manage to leave a good impression on the initial phone call.

The context is that I am planning to move again within the city of Chiba, having moved to a small studio apartment slightly more than half a year ago. While this is not my first time moving within Japan, it is my first time hiring a moving company as my previous moves always entailed going between furnished apartments or student dormitories. Given that I only had enough physical things that can be carried in a suitcase, I simply had no need to hire a moving company. My lack of understanding of the industry meant I casually made an online inquiry that connected me to dozens of rivals.

That was the first and gravest mistake of the moving experience. Not understanding just how seriously competitive that the industry is, I had no idea so many firms would pounce on a small project taking a few pieces of furniture from one apartment to another within the city of Chiba, located merely an eight-minute drive from one another. What waited for me during the multiple correspondences with different moving companies was a sheer willingness to decrease the price as much as possible just so they can get the business at the expense of their competitors. 

None of the salesmen were equivocal when it came to talking about their business strategy. The first salesman to show up at my apartment was unhappy that he was the first because he knew the next one to show up will beat him at price no matter how low his quote is. The second one to show up joked that the last guy was probably unhappy that he showed up because his firm is not only cheaper but better. The ones who called to give a quote grew cold and responsive as soon as they heard that those who visited physically gave lower prices. 

Indeed, no matter how much each salesman talks about the speed, quality, and a long history of excellence of service that they claim to be unique to the company he works for, all the salesmen eventually all come back to the singularly important issue of price. Ultimately, I had to relent when one of the salesmen simply refused to leave my apartment without getting my verbal approval to proceed with the move, after slashing the price by nearly half to ease my hesitancy. For anyone going through the process for the first time, s/he would be flabbergasted by the drastic measures they would go through to get the business.

And the prices can be shockingly low as well. At JPY 18,000 for two movers, a small truck, and 2-3 hours of their time, the margin for the company is not particularly great. Considering that trucks and gas money cannot be drastically reduced, not to mention the transit time and the time needed to carry all the bulky items into and out of the apartments, the only place that can be adjusted dramatically is the company's margins and salaries for the movers. When the salesman gets a cut of the sales and the company takes another cut, there really is not much left for the movers' take-home pay.

That is the sad reality of a low-skill, high-volume, low-barrier-of-entry industry like movers. Surely, many of the people working at young, less educated, and possibly foreign. And as much as each moving company claims to only use full-time employees (as opposed to contractors, part-time workers, and freelancers), the fact that the 4-6 man-hours cost only JPY 18,000 means that each mover is bringing in as low as JPY 3,000 per hour even before all the costs are accounted for. Even with such a simple back-of-the-envelope calculation, it is hard to imagine each mover being paid much more than the minimum wage.

All the folks moving houses and negotiating the prices down for the moving company, myself included, should feel at least a bit guilty about how cheap they are getting the services in such an expensive country to live in. The workers doing the heavy lifting, quite literally, are, to be completely blunt, being exploited for their willingness to work cheap, fast, hard, and for long hours. For many, there may be little choice but to do the menial labor, for lack of skills, professional qualification, or most grimly, legal residential statuses. It is food for thought as salesmen talk up how great their moving companies are.