Whether it’s the increasing threat to operations posed by climate change, a growing burden of regulation and compliance, cybersecurity threats or political upheaval, there is plenty to keep FIDI Affiliate CEOs awake at night. While international relocation companies are experienced in dealing with challenges, there are potentially more risks to global mobility than ever before. Andrew Bennett looks at what companies can do to avert a crisis.
The threat of COVID-19 may have receded around the world, but doing business across international borders is as tough as ever – some would say even tougher.
At the World Economic Forum’s (WEF’s) annual meeting in Davos in January, experts on risk confirmed armed conflicts and extreme weather among the leading global perils for the year ahead.
Misinformation and disinformation, including cyberattacks, were named as the top risks over a two-year timescale within the WEF Global Risks Report, according to NBC New York. However, environmental concerns, including extreme weather events and ecosystem collapse, dominated the risk rankings for the next 10 years.
The weather events cited by the WEF include heatwaves, tornadoes and floods, which featured strongly in its short-term and long-term rankings.
Adverse weather events ‘going global’
Odin Kloppers, ESG Coordinator at the Mobilitas Group, suggests that moving companies rank risks according to how they might directly impact on their bottom line.
He says: ‘The effects of climate change are clear; wildfires in California have been in the news and, last year, Valencia in Spain was hit by flooding. Adverse weather events have happened in almost every country in the world over the past five years, and are becoming stronger and more frequent.’
Adriel Lubarsky, CEO at Beehive – a company that helps businesses, including movers, measure and report on climate-related financial risks – adds: ‘Moving companies are particularly vulnerable to extreme weather events disrupting transport routes, infrastructure damage at warehouses, and increased costs because of fuel-price volatility or carbon taxes. You can’t control the weather, but that doesn’t mean you should shrug it off as the cost of doing business.’
The impact of legislation
In the Netherlands, plans were announced to introduce low- and zero-emission zones in key towns and cities by 2025, only to be put on hold. ‘This change in policy impacts companies that invested in new electric vehicles (EVs) only to find the initiative had been cancelled,’ says Kloppers.
‘As well as investing in the vehicles themselves, transport companies have invested in training staff to adjust to using an EV.
‘Over the past 10 years, the trend is that companies have started to gain more insight into their sustainability performance and report that to their main stakeholders.’
Steps towards sustainability
Beehive’s Lubarsky believes the relocation industry has started to make positive steps towards becoming more sustainable. He says: ‘Many companies are switching to more fuel-efficient or electric vehicles, partnering with green logistics providers, and incorporating sustainability into their business models. Some are also investing in weather-tracking systems and scenario planning to anticipate disruptions.’
The Mobilitas Group operates in more than 100 countries, each with varying sustainability needs. To help each branch prepare for crises, they are required to complete a risk-analysis plan on an annual basis.
‘Using flood data from a variety of sources, including the World Bank, branches above a certain threshold need to complete a section on flood mitigation,’ explains Kloppers.
Political instability and cyberattack threats
Thijs Deweerdt, from EY Consulting, has considerable experience in risk management. He has travelled to more than 100 FIDI Affiliates for EY to conduct FIDI FAIM audits on all continents, and now manages the EY auditing team as Director for Risk Consulting.
He believes cybersecurity is one of the most serious risks facing Affiliates.
‘There are direct risks (to a business), such as ransomware, fraud and phishing of information, and indirectly there are risks posed by data-privacy legislation such as GDPR [General Data Protection Regulation],’ he says.
‘Movers hold a lot of confidential information, such as clients’ passport and bank account numbers. If your system goes down because of a cyberattack, that is a substantial risk to business continuity.’
Moving companies may also be in the firing line because of potential supply chain disruption caused by political instability in various countries and the stability of companies themselves.
‘International movers are very interrelated with each other and dependent on the supply chain, including shipping lines and agents with which they are working, so there is always a risk in that regard.’
Compliance and legislation
The need to meet tougher compliance measures is becoming more marked, and Deweerdt sees another trend emerging.
‘We are seeing a trend of protectionism and ‘deglobalisation’. It is becoming more difficult to work across borders,’ he says. ‘From a compliance perspective, I see that requirement expanding, and the average FIDI Affiliate is a medium-sized company. Therefore, most will not be able to assign 10 lawyers to do a deep dive into compliance.’
Much of the legal requirements relating to customs are in addition to the minimum requirements in the FAIM audit, so movers may be stretched to meet the compliance workload.
Deweerdt adds:
‘With every risk comes an opportunity. Weather-related risks may create a potential opportunity for movers in terms of people wanting to leave certain locations.’
A sustainable culture
While being concerned about the impact of climate change, Harmony Relocation’s Sustainability Manager, Dominic Offer, sees another threat to the industry – the problems many movers experience in attracting talent, especially from the younger generation.
‘Our industry is quite traditional; we have technology in terms of doing household goods surveys online, but everything else has been done in a similar way as before,’ he says. ‘It’s hard to attract young people into a traditional model. They may not see it as a dynamic industry that is pushing forward.’
Especially with Generation Z and Millennial employees, who are in their 20s and 30s, used to high levels of technology, dwell time at any one company may be shorter.
‘The career span has changed; people used to go into a job and stay for 20 years,’ Offer adds.
He believes adopting a sustainable culture and way of working may be a good recruiting proposition for the younger generations, who tend to prefer buying goods and services provided by companies that prioritise ESG.
CEOs who think long term and about the needs of their companies’ future leaders are more likely to succeed, Offer believes.
‘The most positive thing companies can do is think long term (about sustainability) and do it for themselves,’ he says.
While the rise of artificial intelligence (AI) and automation may pose a threat to administrative roles at moving companies, it could allow firms to streamline themselves. However, ‘[AI] is not going to remove the moving crews any time soon,’ he believes.
Business continuity
While FIDI movers have made strides to monitor and mitigate risks – driven partly by the changing requirements of the FAIM audit – EY’s Deweerdt encourages them to do more, especially in terms of developing business continuity plans. Models for identifying and scoring risks and action plans were provided by EY at the FIDI Conference in Edinburgh, in 2024.
Deweerdt also advises Affiliates to manage risk within their supply chains by considering working with two or three different third-party suppliers, rather than limiting their options by always choosing the same supplier.
Affiliates can leverage tools such as weather-monitoring systems, regulatory trackers and risk-analysis platforms. Regular scenario-planning exercises and reviews of supply chain vulnerabilities will also help anticipate and manage risks before they escalate, according to Beehive’s Lubarsky.
Don’t be too risk averse
As business owners know well, however, playing it too safe can also create problems.
‘Just trying to do business as you have always done in the past carries a risk of its own,’ says Deweerdt. ‘There are a lot of new trends and events happening in the world; people are changing – as is the world – so taking only a limited amount of risk may not work.’
Affiliates are being encouraged to scan the horizon for emerging trends and threats that may affect their businesses, ideally on a quarterly basis.
‘Think about legislation that is changing and how that will impact on you. Do that on a systematic basis,’ advises Deweerdt.
He adds that Affiliates should keep an eye on trends in other regions of the world, particularly those more advanced in areas such as immigration, housing, and mobility. They may provide advanced warning of changes that will occur elsewhere.
‘Train your employees on how to carry out risk management and mitigation, and have a culture of vigilance on cyber security,’ says Deweerdt. ‘You may have the best system in the world, but if your employees are not aware of it and have not been trained, you will still fail. I would rather spend budget on training people and raising awareness than on the next technology project.’
Tips for mitigating risk
- Think long term. ‘Scan the horizon’ for threats (and opportunities) that could affect your business in the next two years, five years – even a decade away.
- Prepare contingency plans. What would happen, for instance, if a flood or earthquake meant your warehouse was out of operation? What about another pandemic? No-one wants to imagine these scenarios, but how would you continue business if the worst happened?
- How safe is your supply chain? Do you have alternative suppliers you can turn to if needed, to ensure your clients’ moves are completed smoothly?
- Keep tuned in to what’s happening in the moving world and with your moving partners around the world. If possible, attend the FIDI Conference and join the educational sessions, talk to other agents, join the FIDI Academy and – of course – keep reading FIDI Focus.
- Don’t underestimate cybersecurity. Cyberattacks are not just confined to large global corporations and big government departments, and the industry has already fallen victim.
- Keep track of the financial health of companies in your supply chain by checking publicly held information on them.
- Ensure you have the right level of insurance cover.
Risk management: a part of FAIM
Managing risk is embedded in the industry’s most stringent quality standard, FIDI FAIM. The FAIM 2022 standard, in effect since 2023, gives explicit requirements for Affiliates in terms of risk management and mitigating risk.
Minimum requirements under FIDI FAIM are for Affiliates to have a risk-management programme, conduct risk evaluation, monitor risk, and have a risk treatment/remediation plan. To pass the FAIM audit, companies need to demonstrate to auditors that they assess internal and external risks to their business.
In previous versions of the FAIM programmes, before 2023, FAIM indirectly included risk-management principles, such as anti-bribery and corruption and anti-trust requirements, and the requirement to have appropriate insurance policies. FAIM also includes fire-prevention standards for Affiliates’ premises and there is a pre-requirement for digital readiness.
FIDI Affiliates can find more information and guidelines in the FAIM Library on FIDINET.