An Inside Look at the the
Trade Show Industry
BEND, OR (September 13, 2009) Another
in a long list of unfortunate trade show industry incidents took place in San Jose recently when
"Team San Jose" injected themselves into the labor equation there. Team San Joe did this when they decided to intervene in a squabble between two Teamster locals - Local 287 and Local 85 - that service San Jose and vicinity.
Rather than allowing the
Teamsters International to sort out their own internal issues, Team San Jose
complicated matters by signing a labor agreement with Teamsters Local 287. They then
issued an edict that all general service contractors (GCs) that work in the San
Jose Convention Center must now buy their Teamster labor from them. (Note: Most general contractors that service San Jose already hold existing contracts with Local 85,
which really complicates matters).
troubling of all, the cost of the Team San Jose Teamsters (when you include the Team San Jose mark-up) can be as much as 170%
higher than GCs in San Jose have been paying. That’s right, as much as 170% higher, if the GC orders
their labor after move-in begins (you can guess where that
cost increase will go).
the GC orders their labor according to their typical practice (sometime between
2 weeks out and the first day of move-in) the mark-up if only 125% higher. After much pushback from
industry associations like IAEE and ESCA, there has been some movement on
lowering these rates, but not enough to quell concerns.
you might ask, what extra value can the GC, or the show organizer, or the
exhibitor expect for this extra cost? So far, there is not one thing that anyone
I know would call valuable.
who came up with this plan and why did they do it? In my
experience, anytime I have come across this kind of "innovation” in our
industry we usually find there are one to three basic rules in play.
Rule #1 Misery
(a/k/a The customer is always #2)
This common tale starts with "things aren't going so well for us right now. Our customers aren't spending as much with us as they used to
... I know, let’s raise our
kind of brainstorm isn’t only reserved for facilities that add cost to labor. There is an example of a show this year
that was expecting its show freight to be down by 50% due to the down
economy. So the general contractor doubled
their material handling rate.
Rule #2 Might
(a/k/a The emperor's got no clothes)
unfortunate, ever-present, truth in our industry is that there are some in the
seat of power who believe their position, or status, gives them the privilege
to make up any "rules” they want. Typically these rules are unilateral, self-serving,
completely unnecessary, and interfere with or impede existing contractual
relationships which end up penalizing the customer and costing them more money (spelled
again, don’t think this kind of tyranny is only present in this situation. There is more than
one trade show that forces all labor contractors to buy their labor from their
GC, instead of using their own contract. There are other shows that send out notices to
their exhibitors that expressly intimidate them into using their GC instead of
When evidence of this abuse
of power is brought to the attention of the leaders in our industry they
state, "the marketplace will cure
the problem.” But those who are victimized by this practice know that the chances
of this happening are roughly equivalent to the instance of fair and open
elections in some third world country.
Rule #3 Make
‘em an offer they can’t wait to refuse.
(a/ka If it’s not broken, break it anyway)
real hubris of this scenario is that the purveyors of the innovation have
convinced themselves that they are offering a good deal. While I can only
guess that life in the ivory tower must be grand, those in this nosebleed
section should know that all industries, including ours, are built on relationships.
or interfering, with those relationships for short-term, self-serving, gain
should really have only one response from any self-respecting corporate marketer.
take my business elsewhere.