It’s happened to everyone. You’ve ordered a package from the site of a company far from the big e-commerce brands. You’ve inquired about it, looked up reviews of the company, reviews of the product you’ve chosen, scoured the far-flung forums of the Internet, and come to the conclusion that everything seems to be in the norm, the price is great, and you need that product. You click “buy,” wait for the shipping days. The package does not arrive.
Contact the seller, but he cannot give you definite answers. The package tracking shows no signs of life, the carrier does not provide useful data. In short, the package looks lost. If you are lucky, the company tries to send you another one at no cost or directly offers you a refund, but it is not always in the terms of sale and sometimes you just have to surrender to fate.
But why does this happen? Well, there are many answers, but the flow affects virtually any kind of company and any kind of buyer, not just the private citizen. Large companies often rely on international shipping platforms-the classic acronyms on the transport trucks we all know. In turn, if these transport companies do not have their own means available for a given route, they rely on subcontractors on their own whitelists. But it may happen that even these are not available, which results in having to rely on other local suppliers of whom there is less-or no-account in the databases.
In some cases it can happen that these companies, which no one has ever seen or checked, go to the site, load the goods and then “lose” the truck. In Italy it may be more difficult, but as soon as you cross the border the reliability loses even more specific weight.
The problem of goods shipped from the manufacturer and lost deserves a separate discussion: the value of the goods is marginal, because they are often reimbursed by insurance, and some might even consider breathing a sigh of relief in this regard. But the real critical issues are twofold: the first is economic, and relates to finding the goods; the second is legal, and manifests itself in the event that we should no longer be able to find the vehicle with the goods.
In the first case, should the truck be found as a result of a complaint, the truck is impounded until the investigation is completed, and the period of impoundment is paid for by the products’ parent company. In addition, once the goods are released, they often have to be destroyed, and this too comes at a very high cost.
The second critical issue concerns the market for stolen goods: if the truck is not found, most likely those goods will still end up on the market, perhaps in another country. But there are many products, especially in the food area, that have to follow specific laws. One example is the classic chocolate egg with a surprise inside. That egg, which in Europe we all know and have eaten at least once, cannot be sold in America. This is because it contains a plastic object inside that could be ingested, and so it is banned in the country. If one of these eggs were to end up in America, it would then have to be proven to be stolen goods that had nothing to do with the manufacturer. But the individual eggs do not have a serial number: there is the lot and a product traceability code, but tracing it back to the company that was supposed to buy and sell it is very difficult.
Regardless of the first or second assumption, however, one thing is certain: the reputational damage can be substantial, especially if amplified by the media, as unfortunately often happens.
We have told you about the importance of Third Party Reputational Due Diligence, which is the information needed by companies to assess the trustworthiness of companies with which they have economic relationships-especially suppliers-to monitor their economic/equity and reputational situation in order to prevent any image damage.
But how can this data be put side by side? It is one thing, indeed, to have an organized table that tells us, on paper, what is going and what is not going in a company; it is another thing to understand, day by day, how our supplier’s business is progressing and whether there are critical issues that cannot be highlighted by the data. And this argument applies even more when we deal with companies that, in turn, rely on third parties.
To avoid such issues, companies use an audit service that applies not only to subcontractors, but also to any company with which they have a business relationship. In the case of transportation, for example, clients provide details of the company involved and, before approving the loading of the goods, request that a Reputational Analysis be conducted. During this analysis, the economic and financial status is examined, identifying the recipients of the income generated and the beneficial owners of the company. Based on the information gathered, a positive or negative opinion is given, expressed through a score (SCORE). Only with a positive score does the client proceed to work with the carrier.
It is a Reputational Due Diligence service, which helps clients monitor not only transportation, preventing cargo losses, but also all business and commercial activities, thus minimizing reputational and economic-financial risks.
There is no need to explain how much money is saved, because it is not the economic contribution that is important but the reputational one: a missed delivery can do much more damage than the mere value of the lost goods.
The article Reputational Analysis, a necessary tool to safeguard your business comes from TheNewyorker.
