The transportation industry serves thousands of organizations involved in the safe carriage of people and property via air, sea, rail or road. As was discovered in our recently published Transportation Risk Index, the industry faces no shortage of challenges from risks as diverse as cyber, climate change, social unrest, regulatory change and the Internet of Things.
Of the many sectors of the global transportation industry, one comprises organisations whose purpose is to manage the care, custody and control of personal belongings of individuals and families who relocate—either around the block or half-way around the world. These companies are known by various identifiers depending on their domicile:
- movers (U.S. and Canada)
- removers (U.K.)
- removalists (Australia)
- mudanzas (Latin America)
- and other
Regardless of the moniker, the basic purpose of these companies is the same: to manage the transit and necessary storage of their customers’ personal belongings, from the moment a packing crew enters the home to when another crew unpacks the same goods at their destination.
Sounds simple but this is hardly the case. What follows are some of the often unique risk factors to this industry and those who proudly inhabit it.
Supply chain risk
It is not uncommon for an international shipment of household goods and personal belongings to be handled by as many as 10-12 individual and unique systems for transit, storage and safekeeping from origin to destination.
The company directly responsible to the customer (the booking agent) is required to select and oversee each participant in the supply chain based on capabilities, pricing, the opportunity for reciprocity and a shared purpose toward the safekeeping of the goods.
This is not an easy task in today’s fluid risk environment. A traditional commercial supply chain might be generally defined as a network between a company and its suppliers, which produces and distributes a specific commercial product or service at an agreed time to its customers.
Uniquely, the aim of a removal supply chain is to deliver personal belongings already in a finished state, in the same condition at destination as they were found to be at origin. This also has to be done on time and at a competitive price.
Supply chain risk management in this transportation segment requires a shared understanding of both the collective steps necessary to achieve this aim and the individual capabilities required to complete each step. This includes documentation of the condition of goods at both the start and finish lines. In this sense the supply chain is like an orchestra, when all the individual instruments are working in time and in harmony, beautiful music can be created. When they don’t, the sound is far less enjoyable.
Risk of competitive independence
This would appear to be counter intuitive, as traditional business models tend to praise the virtues of independent thinking and a competitive culture. This certainly appears to be the case relative to commercial supply chains, as they are developed to perform independently and competitively from others in the same space.
While there is clearly some merit in these attributes, the global removal industry once again finds itself in a rather unique environment and understands the need to adapt accordingly.
There are two primary factors driving this reality:
- An international relocation may involve the need for 20+ touch points with the family.
- While some are potentially developing, there is no single provider of each and every product and service of importance to families relocating internationally.
Systemic cooperative interdependence
This reality has created the need for “systemic cooperative interdependence.” The demands and expectations of the customer require a service system flexible enough to understand and adapt constantly. As such, interdependence between participants in the global removal industry is far more crucial than a position based on competitive independence.
Relationship risk management
We all understand the importance of reputation risk management. Relationship risk management can be considered in the same family of risk. The customer requires a symphony, not a solo performance and it is better to be part of the symphony part of the time than a lonely soloist all the time.
One does not need to search very long to find that moving house is generally high on the list of life’s most emotional experiences. Human beings have been on the move since the dawn of time, and one could speculate that, by definition, a move is the act of leaving one place for another.
Human beings are constantly moving either away from something or toward something and, either way, emotion is likely to be involved.
While a carrier may face the loss of millions of dollars of commercial goods in their possession, this pales in comparison with the loss of invaluable sentimental family heirlooms and goods.
World-class removal companies (and there are many) understand that this is one of the most fundamental and important risks facing their organisations. They make certain that the focus of all training and process engineering include properly managing emotional risk.
My wife and I are currently in the process of moving from Washington D.C. to Portland, Oregon. After 34 years of marriage, raising 2 children and 23 years in the same home we have accumulated our share of “treasures.” While watching the packing crew load our belongings into the moving van, we realized that we had trusted a company to care for the goods that represent our past, present and, future. An important responsibility indeed.
In many ways our world seems to be moving away from personal interaction and interdependence. We will watch with great interest to see how this trend impacts the industry we serve. But regardless of whether it is known as the moving, removal, removalist, mudanzas industry or others, the fundamental risk is personal!
Bill Rose is the President of The Willis Relocation Risk Group (WRRG), who focus on risk related issues pertaining to the Global Mobility Industry. Mr. Rose has consulted for many of the largest international household good forwarding systems in the world on many risk and insurance related topics over his 24 year career servicing this industry.