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Managing the relationship between movers and RMCs

May 10, 2018

Derek Duffy (Armstrong International) chaired a panel discussion at FIDI in San Diego to look at the challenges and goals of Relocation Management Companies (RMCs) to help encourage true partnerships with moving companies and a move away from a customer/supplier relationship.  The panellists were, from the RMCs: Ken Eng (Cartus); Bill Mulholland (ARC); Kyriako Bouris (Weichert) and Derrick Young (BGRS); and for the movers: Jason Will (Asian Tigers); Charles Luyckx (Elliott Mobility; and Lorne Dixon (Mexpack).

Derek started the conversation with a look at compliance and asked Derrick Young so explain the position from the RMC’s perspective.  Derrick said that there were four main compliance points: the contract with suppliers, compliance with clients’ policies, compliance within countries to make sure suppliers follow the law, and personal information and technology security. “We have had to put in place a lot of Draconian wording that nobody likes and it’s very difficult for small companies to meet all of these objectives,” he said, explaining that it was the clients and the EU that were driving it. “We try to negotiate on behalf of the moving community,” he said, but added that the need for compliance was likely to grow and eventually it would be necessary for suppliers to have verification that they are compliant rather than just signing it off on the contract. “You will need to prove that you are compliant.” 

Derek Duffy asked whether that had been any change in processes or were people generally just signing a document and moving on?  Would there be a time when clients audited suppliers for compliance right through their supply chains? Derrick said that unless there was some audit process in place that certified a company as being compliant, RMC’s would need to go through some kind of audit process.   

Ken Eng said that Cartus had started seeing contracts in which a compliance audit could be requested. “The request is for a third-party company to go into a supplier’s office and to check their processes and what the results have been.” 

Derek asked what would be the cost of adding another layer of audit and who would pay for it. Kyriako Bouris said that those costs should be borne by the client. “We haven’t had push back,” he said. “Clients won’t want to sacrifice compliance and ask someone else to pay for that.” Jason Will suggested that a compliance audit could be included within FIDI/FAIM.  

Ken said that Cartus had recently developed a 17-page addendum relating to GDPR requirements.  “If you are certified through FAIM a lot of what you are doing will be right in line with what we are looking for.” But he warned, “if it is not robust enough, it will be returned because the monetary penalty could put us out of business in one instance. We treat this very seriously.” 

What does FAIM mean to RMCs? Bill Mulholland said that it was extremely important as around 50% of his business is international and RFP’s always ask what standards are applied to supplier networks. “That’s why we gravitate to FIDI as it provides an assurance to [the clients] and it legitimises the vendor because they have gone through the entire process to be vetted,” he said. “Getting the FAIM certification is the highest level of dedication and legitimacy.” 

Derek asked whether corporations were aware of FIDI/FAIM.  Kyriako said that this was an area in which RMCs and FIDI needed to work together to market the FAIM certification.   The more we can get that message out collectively to the client base it’s going to help.”  Bill Mulholland added that it was a great help for his company to go in with a strong supply chain management story. “But if the matrices aren’t right, they don’t care about FAIM. I hope that FAIM keeps getting more robust because it makes our job easier.” 

FIDI has recently added a financial assessment element to FAIM.  Derek asked the RMCs how important that was to them.  Kyriako said financial stability had been hit hard in recent years and that had got the clients’ attention. “We spend a lot of time on financial assessments in our supply chain,” he said. Derrick Young added that he had to protect both his clients’ money and his own.   

Derek asked Ken how Cartus measured the performance of his supply chain.  He said that he used an eight-point scale (one being low).  He knew the results for every supplier and every region. But he explained he wasn’t just looking for a high average score. He also wanted a minimum of low numbers. “It’s the ones and twos that cost the money,” he said. 

Kyriako said that numbers are important but it was his job to educate the clients. If something went wrong, it was the way in which it was handled that mattered.  Derrick added that when there are service issues it’s very important that the supplier passes on all the information about the causes and the corrective action taken so they can demonstrate the quality of the response.  Ken said that his first response to a problem is always to find out what happened and not always blame the supplier. “Invariably there is a second side,” he said. “We do defend.  We are defending ourselves, we are defending the network and we are defending the brand.  We do not always take our client’s emotion or our account manager’s emotion in the first take.” 

Lorne Dixon said that it would be very helpful to be able to keep the communication going with an RMC is there was a low score on a shipment. “It would help us to build those relationships and make sure the partnership moves forward,” he said.   

Derek asked Lorne about the application of the Single Point of Contact (SPOC) model which requires communication with the client through one person only. He said that he understood why it was introduced but it was difficult to apply in Mexico. “I wonder if we could meet halfway and share some information, such as arranging the surveys?” 

Bill likened it to a hospital in which the nurse is dealing with everyone but has to work with experts. In that case his company would be the SPOC but would not stop communication with the experts as they cannot communicate as well as the specialists do. 

Derrick said that the SPOC model is driven by clients as up to75 people can be contacting an assignee during a move.  “We don’t prefer it because we understand the challenges in communications and have to have specially trained staff to operate it,” he said.  He said he was always looking for middle ground that’s best for the client and the supply chain. 

The final subject was technology and how it can and will help improve efficiency.  Bill said that in his opinion Blockchain was already providing the answer.  He said it was originally developed for the control of electronic currency and has now been extensively adopted by the logistics industry. “It’s like a gigantic global spreadsheet that can’t be changed,” he said. “Blockchain will be, 1000%, what everyone in this room is using in the next five years.  Every company will insist that you use blockchain to track all shipments.” (see The Mover, July 2017, page 8).   

Derek Duffy (Armstrong International); Bill Mulholland (ARC); Kyriako Bouris (Weichert) and Derrick Young (BGRS); and for the movers: Jason Will (Asian Tigers); Charles Luyckx (Elliott Mobility); and Lorne Dixon (Mexpack).  

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