Transport Security - ENFORCER
  • Solutions
    • Trailer Security Solutions
    • Truck Security Solutions
    • Container Security Solutions
  • Products
    • ABLOY® Padlocks
    • Adjustable Lock
    • Seal Guard™ Locks
    • King Pin Locks
    • Trailer Door Hasp Locks
    • Roll Up Door Lock
    • Air Cuff® Locks
    • Glad Hand Lock
    • CargoGuard Lock
    • Trailer Lock Box
    • Security Kit
    • Landing Gear Lock
    • Steering Lock
    • Bulkhead Door Lock
    • Security Seals >
      • C-TPAT Seals >
        • Cable Sealock
        • Cable Seals
        • Bolt Seals
      • Indicative Security Seals >
        • Plastic & Metal Trailer Seals
    • GPS Tracking >
      • Tracking Login
      • Covert Tracking Technolgy
      • Fleet and Vehicle Tracking Technology
  • Industries
    • Trucking
    • Refrigerated Trucking
    • Flatbed Trucking
    • Tanker Trucks
    • Retail
    • Portable Storage
    • Shipping Containers
    • Construction
  • Keying
  • About
  • Case Studies
  • News
    • Success Stories
    • Sign Up For Newsletter
  • Contact
    • Careers
  • Request A Quote

Cargo Security News

Cargo Theft and Its Impact on the Retail Community

2/9/2016

0 Comments

 
By Maurizio Scrofani; CCSP,LPC 

Maurizio is a well know  supply chain asset protection professional with over twenty years' experience in retail. He currently works for a well known national department store chain. The views and information in this article are his own and do not neccessarily reflect the views of his current employer. Maurizio may be reached at maurizio@mpsconsultants.com or via LinkedIn.
Picture





​
 
Cargo theft often is thought of as a silent and victimless crime despite the fact that it accounts for losses of billions of dollars annually in the United States. The most common incidences of cargo theft involve gangs who steal high-value commodities from loaded trailers. Substantial loses can also occur from facility burglaries. Cargo theft has a great impact to the economy of the US, which carries the world’s largest national economy making roughly 17 to 22 percent of the world’s gross domestic product (GDP) according to EconomyWatch.com. An insight into the impact of cargo theft on the retail community is crucial in determination of its economic significance to the US at large. In any business the mechanics of its supply chain helps the various management groups in keeping track of the flow of goods from one point to another. Therefore, if the supply chain loses control or has a substantial disruption, a chain of instability is created. This disruption influences not only the business areas, but also indirectly large portions of the economy.
 
Cargo theft has notable downstream costs that exceed the value of the goods stolen. While it is difficult to quantify these costs, they are estimated through varied methods that are passed to the consumer through increased registration prices. The most dominant impact may be in a revision of EOQ (economic order quantity), which can “pull” or “push” mutual supply chains between raw material suppliers and end shippers. In addition, as astutely noted by Dan Burgess in his book Cargo Theft, Loss, Prevention, and Supply Chain Security, “Loss of market share presents multiple issues for manufacturers, including the loss of customers, increased sales for competitors, and additional costs to the manufacturer to win back customer loyalty.” When such cases occur, the prices for goods increase, and the extra amount that each consumer has to pay to get the product accounts for the loss caused by theft.
 
Impact on Insurance and Brand
 
Insurance companies are highly motivated stakeholders in the retail industry and play a major role in cargo security. Cargo theft is often perceived as an insurance problem; therefore, its effect on the economy cannot be underestimated. Jared Palmer explained in his article in Inbound Logistics magazine, when companies report cases of trucks being hijacked, insurance premiums are raised the following year because the trucking company may not cover the entire loss even with coverage based on their deductible. Getting a similar shipment for the retailers affected may not be possible, which can negatively affect the retailer’s target of meeting their customers’ demands and vendors’ “first to market” commitments.
If a truck transporting goods has been hijacked, for example, the trucking company pays for the stolen products and the loss. Covering the entire loss could be impossible because of the deductible policy. Rates for future shipments for the same product will be raised to cover the loss incurred, and other additional costs passed to the retailers (shippers) who will pass them to their customers. Both the manufacturing company and the retailers will have to pay an extra amount to cover the loss incurred by the shipment company to obtain a similar product. In inflicting financial damages to shippers, consumers, manufacturers, and carriers, cargo theft has had the highest impact. The most critical impact to any company is its image, awareness, and other relationships.
 
When cases of theft happen, the stolen product is reintroduced traditionally via gray markets to the supply chain through illegal means that are out of control for the brand owner. These criminals tamper with the goods, change their prices, and the impact is felt by both the end-using customer and channel partners. To avoid such potential exposure, minimalism is best when using company names, corporate logos, or any other information that may be shared on the shipment content. All of those pertinent elements can be noted on the interior packaging. The traditional “brown box” is becoming less interesting for the curious or impulse criminal. There will always be the marketing and sales demand to promote the brand, but there needs to be a healthy balance between risk and reward. There are companies that continue to not share their loss and not report such cases to avoid negative perceptions of the public. Moving a commodity or novelty item from origin to destination is seriously impacted by the cargo theft. In today’s mutual supply chains that include multiple stakeholders, including the carriers, brokers, drivers, retailers, and manufacturers, there is always an expense created to rebuild the order and shipment to meet the original demand or revised demand based on time lapse or new consumer appetite since the loss. This is attempted to be executed while managing the cost of lost or stolen goods.
 
Recovering Stolen Shipments
 
When a theft occurs, too often victims rely solely on local law enforcement agencies to recover their freight. However, if the agencies do not have all of the needed information about the supply-chain enterprise criminals, it begins to lose its window of opportunity for recovery. A notable rule of thumb used in the industry is that once four hours have passed from theft to communication, the recovery opportunity may drop by as much as 60 percent success rate on average.
 
In cargo theft the most common scenario is where a gang of thieves target mainly trailers loaded with high-value goods when they are left unattended. However, methods vary depending on how execution of goods is done and how sophisticated the supply-chain enterprise criminals are. Mostly this occurs in stopping points for trucks or parking areas that are not secured, where they mainly target unsecured trailers. These criminals are always informed and are rather deep in their knowledge base on the trucking vertical along with impressive understanding of the available technology to use for their crimes as well as counter intelligence. After identifying a target trailer, these criminals access the truck and drive off with the goods to a predetermined location where they quickly hook up the stolen trailer to a recently stolen tractor and move it to a
more secure location.
 
Another common type of cargo theft is where thieves break into an unattended trailer and offload the cargo into their getaway trailer. This theft is also known as “leakage.” They then repack and relabel the products before reintroducing them into the supply chain. This lowers the probability that law enforcement will locate and recover the stolen goods.
 
Security Measures and Prevention Strategies
 
Security measures can be taken by companies to improve their vehicle and facility security. Implementation of technologies and security devices to create security practices with common sense can be the first step that can help in mitigating and preventing losses associated with cargo theft. For example, use of a GPS tool can help the company track and locate lost commodities.
 
Other preventive tactics include employee screening and training whereby the drivers—also known as our “knights of the highway”—would be empowered to be at the forefront in fighting against cargo theft crimes. It is important for cargo transporters to know and understand the supply chains of the goods they are transporting as well as determine a robust security plan across the chain in collaboration with the shipper. This will help in determining the company’s theft risks. The product type determines the ability of it being sold in the black market. Prompt response to every alarm is another important action that should not be ignored. Real-time, information-sharing practices will allow for our law enforcement professionals and other security stakeholders to plan, forecast, and react to matters that require a multi-prong effort and approach.
 
Lastly, the continued commitment to technology, not from an acquisition or procurement perspective only, but from a forward-thinking demand in noting where it will move to and how quickly one is willing to pivot to invest in the required changes to people, process, or technology investments in order to mitigate risk. Cargo theft may have been perceived in the past as a trucking industry problem or one that resides at the desk of an insurance claim adjuster. But clearly today in the retail industry, it is an “us” problem that needs all hands on deck and all stakeholders to be “all in.”


0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Tweets by @stopcargotheft

    Categories

    All
    Abloy Padlock
    Adjustable Trailer Lock
    Air Cuff Lock
    Cargo Security News
    Cargo Theft
    Cargo Theft Mexico
    Flatbed Trailer Security
    GPS
    King Pin Lock
    Loss Prevention
    Pilferage
    Press Release
    Seal Guard Lock
    Security Articles
    Security Articles
    Security News
    Security News
    Trailer Theft
    Truck Theft
    Videos

    Archives

    March 2023
    January 2023
    December 2022
    November 2022
    September 2022
    August 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    October 2021
    August 2021
    December 2019
    November 2019
    September 2019
    June 2019
    February 2019
    August 2018
    July 2018
    June 2018
    May 2018
    March 2018
    February 2018
    January 2018
    September 2017
    May 2017
    April 2017
    February 2017
    December 2016
    November 2016
    May 2016
    April 2016
    February 2016
    January 2016
    September 2015
    August 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    August 2013
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    June 2010
    May 2010
    February 2010
    September 2009
    August 2009
    July 2009
    April 2009
    March 2009
    November 2008
    September 2008
    April 2008
    October 2007
    September 2007
    April 2006
    February 2006
    February 2005

    RSS Feed

About Us

Preventative Maintenance
Contact Us
News
Trailer Security Solutions

ABLOY Padlocks
Adjustable Lock #1217
CargoGuard Lock #8075
Door Hasp Locks #8000 & #8014
King Pin Lock #1111
King Pin Lock #1112
Landing Gear Locks #1213
Roll up Trailer Door Lock #8050
Seal Guard Lock #5900
Seal Guard Lock #5950
​Trailer Lock Box #8055

Truck Security Solutions

Air Cuff Lock #3000
Air Cuff Lock #3030
Security Kits
Steering Lock 
GPS Tracking Technology

Covert Package Tracking
Truck and Trailer  GPS Tracking
Tracking Login


©2023 Transport Security, Inc.  820 South Pine Street Waconia, MN 55387   952-442-5625    enforcer@transportsecurity.com
Warranty / Disclaimer
  • Solutions
    • Trailer Security Solutions
    • Truck Security Solutions
    • Container Security Solutions
  • Products
    • ABLOY® Padlocks
    • Adjustable Lock
    • Seal Guard™ Locks
    • King Pin Locks
    • Trailer Door Hasp Locks
    • Roll Up Door Lock
    • Air Cuff® Locks
    • Glad Hand Lock
    • CargoGuard Lock
    • Trailer Lock Box
    • Security Kit
    • Landing Gear Lock
    • Steering Lock
    • Bulkhead Door Lock
    • Security Seals >
      • C-TPAT Seals >
        • Cable Sealock
        • Cable Seals
        • Bolt Seals
      • Indicative Security Seals >
        • Plastic & Metal Trailer Seals
    • GPS Tracking >
      • Tracking Login
      • Covert Tracking Technolgy
      • Fleet and Vehicle Tracking Technology
  • Industries
    • Trucking
    • Refrigerated Trucking
    • Flatbed Trucking
    • Tanker Trucks
    • Retail
    • Portable Storage
    • Shipping Containers
    • Construction
  • Keying
  • About
  • Case Studies
  • News
    • Success Stories
    • Sign Up For Newsletter
  • Contact
    • Careers
  • Request A Quote