Retailers encouraged to raise awareness about supply chain security By Leischen Stelter
DALLAS—Retailers should be taking a proactive approach to monitoring their supply chain. After all, the FBI estimates it’s a $30 billion problem, and it could be much bigger. “According to industry reports, the number is believed to be much higher,” said Nancy Erickson, VP of loss prevention, supply chain for OfficeMax. During this session at the NRF Loss Prevention Conference and Expo on June 13, Erickson said many retailers hesitate to report real numbers because of concern it could cause brand damage. Similarly, carriers are likely underreporting cargo theft for fear of losing clients or facing increased insurance rates.
But it is absolutely critical to have real numbers, since there’s no doubt cargo theft is on the rise, she said. “Our collective goal is let’s get real numbers so we can develop real programs around real data,” she said. While awareness of cargo theft is growing at all levels, from retailers to law enforcement, not enough is being done to fight this problem.
Cargo theft is happening whenever carriers are stopped: “Freight at rest is freight at risk” is a common saying among carriers, said Erickson. While it used to be that the most common place for cargo theft was in unsecured lots, the current trend in thefts are happening right in carrier lots. Erickson said they have seen an explosion in sophisticated groups of organized thieves breaking into secured carrier lots. “For these groups of professionals it’s always a matter of risk versus reward. In this case, the risk is low and the reward is high, so they’re going into secured lots,” she said.
But being aware of cargo theft from a retailer’s perspective is not an easy thing to do, especially when retailers are dealing with multiple carriers. “At Polo we use all different carriers,” said Chris Aye, director of asset protection for Polo Ralph Lauren Corp. “It’s more efficient. However, the price you pay in terms of efficiency is complexity.” Aye estimated that 10 to 15 different third parties handle their product, from manufacturer to stores. Because the supply chain is so complex, Aye said it is critical the company form close partnerships with its transportation partners. He even encouraged retailers to visit their carriers and familiarize themselves with their facilities.
Equally important is reaching out to law enforcement—before you need them. “Keep in mind law enforcement are your best tool,” he said. It’s important to be in contact with law enforcement and know who to talk to if a theft occurs, because time is critical in the recovery of product.
In addition to relationships, Aye said he uses technology such as covert GPS devices hidden inside loads to monitor driver and carrier behavior. By collecting information, retailers know where their product is at any given point and they can also use that information to talk to carriers about any issues with service.