How networks can foster trust in an age of remote collaboration
Not so long ago, logistics seemed a lot more straightforward. A time when a business card and a strong handshake was all that was needed to establish a partnership.
Companies had a certain number of partners that they knew and trusted. If there was an issue to be resolved, adjustment to be made or agreement to be reached, it was done on a direct personal basis.
The truth is, the industry has changed. Business has not only become more global, but also increasingly digital over the last years.
The result is a major rise in the quantity of networks and potential partners, which ultimately leads to an increase in complexity for everyone.
Whilst this development undoubtedly brings a multitude of benefits to transportation and logistics in terms of enhanced digital efficiency and cost savings, after all, every rose has a thorn.
This thorn is called uncertainty and it goes deep when it comes to an industry that has resisted the digital revolution for many years.
What is trust?
Trust at its core means hoping someone will follow through as claimed, without being sure of it. It is a value with many facets including reliability, vulnerability, goodwill and loyalty.
In a business context, and shipping in particular, it is vital for building meaningful and sustainable partnerships.
After all, the only thing more important than trust during everyday transactions is the contract that stands behind them and usually when either one is broken the other one is inspected twice before going ahead with the next project.
Knowing this, what can you do in order to maximize trust, minimize fraud and ensure confidence during everyday transactions with parties not personally known to you?
In the below we will continuously refer to “networks”. The focus here being on industry alliances, freight networks, and collaboration networks in the context of trust, rather than personal networks which were examined in our previous blog on xChange.
We have put together a short list of five points to help you:
1. Collect References
References are crucial when working with a large and complex network of partners.
Oftentimes, in an effort to scale your transport business in terms of global reach and expertise, you will have to work with partners that you do not know.
Here, detailed and qualified references from parties that have previously worked with the given partner are your best shot at finding out whether you can trust a business to deliver on its promises.
The reputation of a firm used to spread through word of mouth on a personal basis, now it is down to the networks to ensure that this important aspect does not get lost as business goes online.
2. Rely on Mutual Standard Contracts
References are a good first indicator, but it is crucial to make sure all parties know the level of performance that is expected and what will happen after non-compliance.
Mutual standard contracts—ideally provided by an accepted industry standard setter—should be used to avoid late remorse.
This is especially true in cases where there is a significant difference in cultural backgrounds of both parties: If you rely on one side’s “standards”, you risk being surprised by contractual elements that you are simply not used to.
3. Focus on trusted networks rather than individual partners
Ideally, networks should induce trust autonomously through both quantity and quality of their members: Before joining a network, it should be clear to new participants which other parties are directly involved or take a benefit from said network.
Encouraging a free flow of information between all of these parties should foster accountability within the network.
Finally, increasing the transparency of transactions and decreasing overall anonymity should act as an incentive for high performance, as a good reputation is at stake during every move.
In addition, misunderstandings are unwanted yet common and there are numerous other economic circumstances that can cause a “block in the road”.
In such cases, a strong network is essential to help mediate between parties, ensuring that business can carry on into the future without trust being broken.
4. Purchase insurance
What happens when your first line of trust breaks and there is no room to mediate or negotiate?
It does not matter what caused the problem, but rather that you need a safety line to catch you and cover your losses.
This is particularly true for risks that would pose a significant challenge to your business if things go wrong. The previous points focus on making sure that things go right.
However, we need to account for things going wrong—and there is no shame in buying insurance for that.
5. Take your time
Working with the same partners and having a personal contact used to be the main driver of trust, a process that took time and patience.
In today’s fast paced environment, time is often of the essence and one of our most valuable resources. However, we have to keep in mind that building trust is a continuous process, as partners need to observe each other’s performance over multiple instances.
Here it helps to “start small” and prove your worth in a number of smaller undertakings before increasing risk and ultimately profits.
Nowadays, networks should speed up this process. They should enhance the individual’s learning curve by providing members with the right partners, for the right jobs, at the right time.