I confess that I am not excited about Mobile Self Storage. The idea of taking possession of someone's belongings is the big rub for me. The beauty of Portable Storage is that I have no connection to what is inside my box that is on rent, it is delivered empty and comes back to me empty.
Writing these articles provides a healthy way to examine my thinking, maybe I am wrong in resisting the opportunities that exist in this area. So my goal in this column is to write with the intention of settling the jump in or stay out question and as I write I don't know where this will end!
In my mind there are 3 areas to consider, the physical, financial and customer.Let's deal with each those in that order:
Trucks: My trucks are all designed to move empty boxes and are all tilt bed. My 20ft trucks have beds that are 6” short of carrying a 20ft box with all four corners on the bed (a requirement for carrying a loaded container). So if we limit this business to 10 & 15 ft containers I can do this. This assumes the customer is willing to live with their contents tilting slightly on the pickup and delivery.
Dispatch/Trucking: We are at an operational level that allows our trucks to do more and more “offhire to onhire” type moves. This is where one customer's rental offhire goes directly to another customer's onhire. With MSS, we'll reduce those opportunities and get less work done per truck because more of the truck moves will require a yard stop to complete than with simple portable storage.
Lifts: I have an 10 ton lift and a sidepick. So we should be OK here, unless we are storing someone's law library.
Service Area: We serve a market that is 200 miles from one end to the other and we have two satellite yards where equipment is stored. We would only be able to use our main yard for loaded storage (assuming we change our use permit) since the other yards do not have onsite personnel. Additionally the cost to move boxes from our furthest rental areas back to our main yard would be time consuming. It would be best to limit our service area for MSS.
Storage Yard: Our yard has a use permit that allows for storing only empty containers. To change that may take years and thousands in fees. Additionally I am not sure what the fire department will require. I'll have to investigate what the extra cost would be.
Rates: Our rates are based on portable storage, even if we double our rental, pick-up and delivery rates I am not sure how profitable MSS will be. I do know that even doubling our empty rates we would still be well under the big MSS national competition. We regularly talk to customers who are in shock at the price difference between us and PODs.
Bottom Line Impact: About 6 or 7 years ago I worked with one of the national MSS companies offering a franchise in our area. After two trips to meet with them and countless spread sheets I could not make the numbers work. The obstacle was the cost of the branded storage units and the franchise fees. In this analysis neither of those are a factor and this is significant.
Capital Expense: If we only use 10 and 15 foot boxes that we already have in fleet and add as needed the need for capital will not be that significant and the equipment acquired could be used empty or loaded.
Homeowners: I recently completed an onhire to a private party, it took 15 emails, 1 site visit and multiple phone calls, then once it was delivered there were 3 emails about a neighbor's complaint and then sure enough I was jogging through the neighborhood and another neighbor grabbed me suggesting that our truck drove onto her lawn. A simple psychological analysis would reveal that I am not wired for these types of transactions.
MSS will require our sales staff (read: other people than me) to become more patient and understanding, our drivers will have to focus more on proper placement and minimizing impact to a residence/neighbors and our shop will have to more thoroughly clean each box and make sure it is free of odors. All doable stuff, it's just that we'll have to adjust.
Legal: We would need a modified rental agreement. Not a big deal. My current general liability policy would need to be expanded to cover loaded containers. Just more money.
Conclusion: Sorry, I am not jumping into this, at least not now. But this does not mean I am closing the door. I choose as a long-term strategic direction to investigating each of the obstacles and work toward making MSS part of our future. I have several friends, who I highly respect in the NPSA, who will accuse me of not being aggressive enough. Its true 10 or 15 years ago, I would have gone for it now, hard and fast. But today has enough demands on me and I can wait, plan and make the change to MSS in good time.