While perhaps less pronounced in the Northwest than other regions, the effects of the housing slump are reaching into many industries other than housing.
Now in its 80th year, Vancouver-based Blue Bird Transfer has adapted its focus to cushion the blow of decreased business in the residential sector.
“With things as they are in the housing market, people aren’t moving as much as they used to,” said President Wade McLaren.
Prior to the slump, 60 percent of the moving company’s business was serving residential movers. Now it’s down to about 25 percent.
To pick up the slack, Blue Bird has shifted gears to market itself in the commercial, office and warehousing distribution sectors. It has also aggressively gone after records storage.
Certain professionals like doctors, dentists and attorneys legally have to store records for set periods of time and often lack storage space to do so.
Blue Bird has 107,000 square feet of warehouse space, split between its Vancouver and Tigard locations. Both warehouses are about 90 percent full.
Records storage is relatively inexpensive, McLaren said. The company charges 25 cents per box per month, compared to the real estate costs associated with storing them in an office.
Blue Bird also has built a market for itself in product shipping, moving ATMs, exercise gear, medical equipment and the like from manufacturers to retailers or consumers.
It is a market many transfer companies don’t utilize, McLaren said.
To make it work, sales representatives start by approaching manufacturers, then going to their clients to secure their business.
“In one case, we went to a client first and they went to the manufacturer and said you will use Blue Bird Transfer for our shipping,” McLaren said.
Some manufacturers are located in the Northwest, but most are in the Midwest. McLaren estimates only five similar companies in the area market themselves as product shippers.
This special products division makes up about 45 percent of Blue Bird’s new business, with records storage making up 12 percent and warehousing and distribution about 25 percent.
Profits, which were not disclosed, have stayed flat – exactly what McLaren was hoping for.
“No major growth, no major losses,” he said.
The company has done business in these sectors for the last 10 or 11 years, but really shifted the focus to them about three years ago to handle the market changes.
It wasn’t hard to do and required no staffing changes, but sales representatives have to be versatile and go after customers differently, McLaren said.
The sales team relies on door-to-door marketing, direct mailing, TV and print ads and networking. There are 48 full-time employees split between Vancouver and Tigard.
“I see this as a long-term situation,” McLaren said. “I don’t expect the housing market to change until well into early spring of 2010.”
The company lived through the housing bust of the early 1980s – and from 1983 to 1986, it had its first major growth period.
“We were coming into the uptick of the market,” McLaren said. “We had been through the downturn, and caught the wave on the surfboard.”
As far as economic downturn affecting business, “The biggest problem I see with the operation of any business is that you have vendors and clients – and sometimes clients don’t pay on time,” he said. “From there, it’s a snowball effect, and your vendors don’t get paid.”
McLaren said the company is making an effort to work with clients who may be struggling. There have been more bankruptcy filings than usual in the last few years – a negative situation for everyone involved.
“We like to stay away from mortgage companies – they’re risky right now,” McLaren said. “Right now, we’re just trying to make really good business decisions, so we’re around for the next 80 years.”
Megan Patrick can be reached at mpatrick@vbjusa.com.
