A global supply chain drives today’s economy. Goods are moved around the world 24/7 – packed and transported by air, rail, sea or truck. As the supply chain grows more complex, so does the ability to secure it. 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? It is difficult to quantify because cargo theft is not always categorized in the same manner and often goes unreported. According to experts, the estimates range from $10 to $30 billion a year. However, this figure does not capture the indirect costs associated with theft such as lost sales, production downtime and missed deliveries. In addition to the financial losses, certain industries such as alcohol, tobacco and pharmaceuticals face the risk of their products being sold to minors or being counterfeited.

What’s in it for cargo thieves?

The value of the cargo is what any cargo thief is out to acquire. However, there is another element affecting the dynamics of cargo theft: relative lack of downside risk. Cargo moves anonymously across the nation’s roads and highways, through jurisdictions with varying resources and abilities or willingness to prosecute if apprehended. Cargo thieves know that law enforcement and prosecutors are less likely to give cargo theft a high priority when the cargo’s owners, transporters and thieves are from another jurisdiction. If there is an apprehension and prosecution, the sentences are often less than other types of crimes such as drug trafficking. Because of the relative ease of hijacking and the lenient punishments of prosecutions, cargo theft continues to grow year after year. High-tech, high-value products, specifically consumer electronics, are in high demand.

How does it happen?

The criminal element responsible for cargo theft is more sophisticated than ever. A well-executed cargo theft is pre-planned and highly coordinated. The stolen goods are often moved quickly to a warehouse, off-loaded, repackaged, re-manifested and placed on another vehicle, often before the theft is discovered or reported to law enforcement. This “illegitimate supply chain” is managed by organized crime operations that know what they are targeting and have the ability to move, trans-load and distribute stolen goods within hours. Today’s virtual economy often works against legitimate businesses by facilitating the distribution of stolen goods through online marketers and auction sites.

In addition to preventing theft, making investments in security to address these issues, 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.

SIDEBAR: What Will Prevent Cargo Theft?

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 strong security procedures and fundamental security practices. These practices include:

1. Being Alert

Be aware of possible surveillance being conducted on your facility’s operation. Watch for parked vehicles outside of the facility or within view of the facility gates and entrances. Take note of individuals with cameras (still or video) or taking notes outside of the facility. Do not allow unauthorized personnel inside the facility, on the grounds or around the perimeter. Vehicles (usually mini-vans or SUVs), especially those with two or more occupants that appear to be following drivers, should also be a concern. It is not uncommon for cargo theft teams to follow their target for hundreds of miles, waiting for an opportunity to hijack the vehicle and cargo.

2. Responding

Immediately report all suspicious activity and/or theft to management and law enforcement officials. Criminals can move stolen goods quickly; immediate reporting of theft to law enforcement is critical. Respond to every alarm. Frequent “false alarms,” including attempted entries or break-ins into the facility, may be a sign that suspicious individuals are testing the facility security system and law enforcement response times.

3. Managing Information

Do not share information regarding cargo or operations with anyone except those involved in the operation. Limit load information within the facility to parties who have a need to know the information. Maintain inventory control; unusual changes in inventory levels may help to alert when something is awry.

4. Knowing Your Supply Chain

Know the carrier and driver that are scheduled to pick-up cargo and verify their identity before a load is released. Monitor delivery schedules and routes, treat suspiciously any overdue shipments or out of route journeys. Review the security of the supply chain partners and know where cargo will stop along its route. Find out if cargo will go directly to the delivery point or be consolidated with other cargo or sit temporarily in another yard.

5. Executing Basic Safety Practices

Keep trucks locked and parked in an organized manner on a well-lit facility lot. Ensure that alarm systems are functioning properly and are monitored by a central station that has updated contact information. Ensure the central station is capable of detecting telephone line interruptions, which can be done with a DVAC line or cellular backup. Communicate to driver teams that one person must remain with the vehicle at all times. Review security at the site regularly, and quickly address maintenance and repair items. There are more drivers than security or law enforcement. So get the drivers involved in the business and the need to protect assets.

6. Screening Perspective Employees

Often cargo theft is perpetrated with inside help. Rigorous pre-employment screening will help weed out those most likely to steal merchandise from a warehouse, loading dock or truck. After screening, make drivers effective with good security training.

7. Training Employees

Communicate security awareness information and location-specific security rules to employees and carriers. Provide security training covering basic topics such as the employee’s role in the security system, how to report security incidents and how to recognize internal conspiracies and suspicious activities. Participate in the Highway Watch program to train drivers to look for suspicious and possibly terrorism- related activities.

8. Being Involved

There are several organizations that can help combat cargo theft.

• International Cargo Security Council http://www.cargosecurity.com/ncsc/ the Local Cargo Security Council
• American Society for Industrial Security www.asisonline.org
• Customs-Trade Partnership Against Terrorism (C-TPAT) http://www.customs.gov/xp/cgov/import/commercial_enforcement/ctpat/
• Technology Asset Protection Association (TAPA) www.tapaonline.org
• Cargo Theft Task Forces http://www.cargosecurity.com/ncsc/images/Cargo_Security_Councils.pdf