An Opinion on Compliance in the Moving Industry and New SOLAS Regulations

Article on Compliance in the Moving Industry

Asian Tigers Group – Hong Kong

The moving and relocation industry is part of the international space that faces a host of challenges in today’s globalized world. From knowing and managing complex regulations for movers to ensuring high service levels, it is an area where companies fight daily to stay ahead. Compliance is undoubtedly, at the moment, one of the hottest topics in our industry. We asked Rob Chipman, CEO of Asian Tigers Group – Hong Kong and President of the FIDI Global Alliance for his view. In a contribution for the August/September 2016 edition of FIDI Focus, Chipman writes about ever-growing complexity in SLAs and the nature of new regulations, like the SOLAS convention, that impinge on the moving industry.

The Growing Complexity of Service Level Agreements (SLAs)

One of the major themes that resonate right throughout Chipman’s article is that the Service Level Agreements seem to be getting increasingly more complex in the moving industry. SLAs are nothing but contracts stating what can be expected by a service provider from his/her client. Made to clarify any expectations regarding the level of service to be given and the penalties to be inflicted for poor performance, the SLAs are just becoming too complex in their composition for the good that they are supposed to offer in the moving industry.

As Chipman points out, SLAs have grown increasingly comprehensive in recent years. Although that might sound like a good thing—to make sure everything is covered—it also has huge drawbacks. The amount of paper these agreements generate can actually be inefficient and costly. This is a big problem in an industry whose margins are generally thin and operational efficiency already holds the key to many bottom-line profits.

“Movers are working to more and more comprehensive Service Level Agreements,” says Chipman. “The more paperwork usually reduces efficiency and raises costs.” Where the SLA becomes more complex and detailed, the more time and resources are needed to administer it, removing from the delivery of the real service itself .

#### FIDI’s Drive to Standardize in Compliance

Seeing the challenges SLA complexity is increasing manifold, as a step ahead, FIDI—global alliance of international moving and relocation companies—is moving towards standardization. The alliance is working on its own SLA, which it would like all agents to use as a template while drawing up agreements with their partners. The idea is to smoothen the process, reduce the administrative load, and bring in uniformity in the approach towards compliance within the industry.

FIDI’s standardized SLA is a balance of the items that would be required for service delivery without the weight of unnecessary complexity. Moving companies can pay more attention to the quality of their services and less to management from cumbersome paperwork. That is why this initiative is very important for Chipman, as he underlines that standardization can help raise efficiency and decrease costs for both service providers and their clients.

“FIDI is introducing their own SLA and also encourages agents to use the FIDI approach when requesting SLAs from their partners,” explains Chipman. This trend towards standardization is a key step in ensuring that the moving industry will be able to operate efficiently in the face of mounting regulation.

The New Challenge to the Industry: Mastering SOLAS Regulations

Besides SLAs, Chipman’s article talked about new regulations affecting the moving industry, notably, the Safety of Life at Sea Convention. SOLAS is an international maritime treaty stating the minimum safety standards on ship construction, equipment, and operations. Equally, one of the key provisions of SOLAS, in force since 2016, is the need to verify the weight of all shipping containers before they are loaded onto a vessel. The regulation was introduced for improving safety at sea by avoiding the overload of vessels and improper stowage of containers.

While certainly the goals that SOLAS set out to achieve are very noble, the implementation of these regulations has brought additional complications to the moving industry. Calculating the weight of containers, especially those carrying household goods and personal effects, is not an easy task. It requires a great deal of accurate detail and knowledge of what each shipment actually contains.

He talked about the issues many agents were encountering as they try to meet SOLAS requirements—particularly with regard to calculating costs. “Hard and soft costs in these calculations make it very difficult to pick an approach that works for customers in terms of how they are charged for SOLAS compliance,” he said.

Hard costs are direct costs involving investments in equipment to weigh containers and additional hours to complete the process. On the other hand, examples of soft costs include administrative time to manage compliance, potential impacts on customer satisfaction if there is a delay in shipment, among others.

These are complexities that call for a balancing act of some delicacy. Relocation companies have to ensure that, in their operations, they adhere to the stipulations of SOLAS to avoid penalties and assure the safety of their shipments. At the same time, they manage the add-on costs in such a manner that it does not eat into their profitability or put an unwarranted burden on their customers.

Why Compliance is Key in Moving Industry

Chipman’s article brings out the critical aspect of compliance in the moving industry. With tightening regulations on all sides, vigilance is called for by companies in their quest to ensure they answer all legal requirements to a T. This not only secures protection from the associated penalties but also strengthens the confidence of clients in the operations of service providers with whom they deal.

FIDI’s efforts toward establishing a uniform SLA and rising to the call for SOLAS compliance mirror a broader trend of increased accountability and transparency within the moving industry. Companies embracing these initiatives can thus attain improved operational efficiencies, lower their costs, and subsequently deliver better quality service to clients.

The Future: Compliance in the Moving Industry Ahead

As the moving industry continues to evolve, compliance will remain at center stage. New regulations, as well as the continued complexity of SLAs, will require companies to remain informed and change practices accordingly. Organizations like FIDI will play an extremely important role in guiding the industry through these changes and providing tools and frameworks to steer through the regulatory environment.

For Rob Chipman and Asian Tigers Group–Hong Kong, it is imperative that they stay ahead of these developments for them to remain leaders in the industry. With active engagement, like FIDI’s standardized SLA and SOLAS compliance strategies, they are not only securing their business future but also helping move the industry forward.

Conclusion

Compliance in the moving industry is a very complex and ever-changing challenge. Taking into consideration the fine lines of the Service Level Agreements, implementation of the SOLAS regulations, or even simple requirements, companies have to work through a sea of requirements in order to be effective and retain the trust of clients. Rob Chipman shares insights in the August/September 2016 edition of FIDI Focus on how the industry can rise in the face of these problems as it drives for standardization, efficiency, and remains committed to excellence.

The lessons learned from leaders like Chipman will be very instrumental in shaping the future of global relocation services as the business realigns itself continually with new regulations and market demands. Either by adopting standardized SLAs or coming up with innovative approaches toward compliance, the moving industry is still going to evolve further into a regime of more accountability, transparency, and customer satisfaction.