Guest Commentary: Preventing Cargo Theft in the Supply Chain

Today’s economy is driven by a global supply chain where goods move around the world 24/7. As supply chains grow more complex, so does the ability to secure goods. One of the biggest challenges affecting businesses today is cargo theft, and the resulting potential disruption of the supply chain.

How large is this problem?
While difficult to quantify, the FBI estimates cargo theft amounts to $15 to $30 billion a year. However, this figure does not capture the indirect costs associated with theft, such as lost sales, production down time, and missed deliveries. As well, certain industries such as alcohol, tobacco, and pharmaceuticals face the risk of their products being sold to minors or being counterfeited.

How does it happen?
A well-executed cargo theft is pre-planned and highly coordinated. Stolen goods are often moved quickly to a warehouse, off-loaded, repackaged, re-manifested, and placed on another vehicle, often before the theft is even discovered. This “illegitimate supply chain” is managed by organized crime operations that have the ability to move, transload, and distribute stolen goods within hours. Today’s virtual economy often works against legitimate businesses by facilitating the distribution of stolen goods through on-line marketers and auction sites.

Do GPS and Telematics really help?
Advances in technology, such as GPS tracking, have improved a fleet manager’s ability to monitor vehicles. Onboard telematics technology significantly improves the vehicle recovery process and may deter a less sophisticated criminal. While there have been many success stories with onboard tracking systems, GPS and other common tracking technologies are frequently defeated as criminals adapt to a hardening of the transportation network. Technology alone is not the magic bullet against cargo theft. An effective security program must be well planned and combine technology with robust security procedures and fundamental security practices.

These practices–discussed in more detail in a white paper we published–include:

1. Be Alert. Be aware of possible surveillance being conducted on your facility’s operation. This includes taking note of vehicles parked outside of your facility, and unauthorized personnel inside of and around the perimeter of your facility.

2. Respond. Immediately report all suspicious activity and/or theft, to management and law enforcement officials as criminals can move goods quickly. Be wary of frequent ‘false alarms’ which can actually be criminals testing your security processes and response times.

3. Manage Information. Only share information on cargo operations with those involved and watch for unusual changes in inventory.

4. Know Your Supply Chain. Verify the identity of your supply chain partners, such as the carrier and driver scheduled to pick-up your cargo before a load is released, and monitor the movement of your goods. Also, be sure to have a solid understanding of when cargo will be consolidated and/or sit temporarily in other yards while en route to its final destination, and ensure that these consolidation sites are governed by the right security standards.

5. Execute Basic Safety Practices. Keep trucks locked and parked in an organized manner on a well-lit facility lot, ensure alarm systems are functioning properly and your facility is monitored by a central station.

6. Screen and Train Employees. Rigorous pre-employment screening will help weed out those most likely to steal merchandise from a warehouse, loading dock, or truck. After screening, ensure drivers have good security training, which should include how to report security instances, how to recognize suspicious activities, and participating in Highway Watch programs.

7. Be involved. Several organizations can help you combat cargo theft. These include:
• International Cargo Security Council and your Local Cargo Security Council
• American Society for Industrial Security
• Customs-Trade Partnership Against Terrorism (C-TPAT)

In addition to preventing theft, making investments in security, from hard costs associated with technology and systems, to investments in training and resources, will ultimately improve supply chain efficiency, customer satisfaction, and bottom line results.

What measures do you have in place to prevent cargo theft? And how is your company realizing an ROI from these investments in terms of loss prevention, insurance savings, etc.?

William (Bill) H. Anderson is the Group Director of Global Security for Ryder System Inc. In his role, Bill is responsible for directing Ryder’s global security function and leading Ryder’s international safety, health and security team. He has been a speaker at the National Safety Council’s Annual Congress and the NAEM’s Annual Environmental, Health and Safety Management Forum. He is a member of Ryder’s Crisis Management Team and Corporate Compliance Steering Committee, as well as the American Industrial Hygiene Association, American Board of Industrial Hygiene and American Society of Safety Engineers. Contact him at banderso@ryder.com.

(Editor’s Note: Logistics Viewpoints will not be published tomorrow, November 11th, in observance of Veteran’s Day).