It wasn’t until the Suez Canal incident that the world saw just how important it is to move cargo safely and securely. One container ship’s blocking 422 ships from passing through the Suez Canal for two weeks cost an estimated $400 million an hour in goods according to Lloyd’s List as quoted in a CNBC article.
As 2020 wore on, the supply chain grew fragile. Factories and industrial facilities being forced to shut down created a massive backlog of materials and goods. Even after workers returned, they were not fully staffed due to social distancing, falling ill, caring for sick family members, or parenting underaged children.
This, in turn, drove up the cost of materials reaching the highest levels in years. So high that the Associated General Contractors of America issued a construction inflation alert. AGC has never seen increases like these in its 35 years of tracking the data.
Cautionary Tale
Cargo theft can also be dangerous. A deputy from the Lincoln County Sheriff’s Office in Colorado responded to a cargo theft call and would up getting shot multiple times reports POLICE Magazine. Apparently, noises woke up a professional truck driver who discovered a man stealing from the back of a semi-trailer.
The truck driver called the sheriff’s office, which sent the deputy. Upon arriving on the scene before he could even investigate, the suspect had shot him multiple times. Thankfully, the deputy has survived and the suspect is in custody.
Cargo Theft Shows No Signs of Slowing Down
You’d think the pandemic would lead to a decrease in crime between lockdowns and the health crisis. Unfortunately, that’s not what happened. Instead, CargoNet states cargo theft increased by 35 percent in the first 10 months of 2020 when compared to the same period in 2019 as USA Today reports. Additionally, thefts have gone up every month compared to the previous year.
The numbers are likely to be much higher. It’s well-known that cargo theft goes largely underreported. Many businesses avoid reporting theft because they don’t want their insurance premiums to go up. They also fear that if the public finds out about it that it will hurt their reputation.
There’s also a systemic reason for underreported cargo thefts. There isn’t one system that tracks all cargo thefts. Two different cargo theft tracking systems may use different categories to identify the crime.
The Price of Cargo Theft
At a time when there’s a shortage of materials, it’s critical to prevent loss of cargo. The shortage is causing a delay for many products. Computers, for example, take months before they can be shipped to customers because of the shortage of chips. Not only are customers waiting longer than expected for their goods, but also, it’s affecting the reputation of the companies even though it’s not their fault.
Besides, replacing a lost item can cost more than the price of the item. Considering cargo theft involves the stealing of many items, it will put a big hit on a company’s finances. “In total, each cargo theft event in first-quarter 2021 was worth an average of $142,574,” writes CargoNet.
Maybe $142k does not sound like much to your company. However, you’d need a lot more sales to make up for the loss. SupplyChainBrain references a study of stolen digital cameras worth $200k. It turns out that it would take $2 million, or 10 times the number of sales, to counteract the loss. Using this formula, the company will need $1.4 million in sales to offset the loss of $142.5k.
On top of all this, the stolen products were probably made with materials that cost far less. Now those same materials may cost more, which raises the prices for the products. Many companies are passing the increase in prices to the customers. Customers will likely notice and not be happy.
In short, companies can’t afford cargo theft with a delicate supply chain and rising costs while putting brand reputation and customer loyalty at risk.
What Can You Do to Reduce Cargo Theft?
A news story from Global News quotes a trucking company representative who says when it comes to security, many businesses cut corners. Instead of saving on costs, they end up paying more. Hence, taking action to prevent cargo theft is mandatory.
Start by educating your employees including drivers and dock workers. Let them know why it is important to stop cargo theft and how it affects the business and employees. Walk them through the tactics thieves use to steal cargo.
Cargo theft tends to rise dramatically on holiday weekends. In its Labor Day advisory, CargoNet offers the following advice for protecting your company from identity fraud and cargo theft schemes:
- Verify details of internet transaction before accepting a bid.
- Advise carriers to confirm the delivery address with the driver before loading.
- Arrange same-day delivery for short-hauls.
- Embed covert tracking devices and use high-security locks.
- Ask drivers not to leave the truck unattended within 250 miles of pickup.
On that last one, you want to ensure the driver has enough fuel and rest to drive at least 250 miles from the pickup station without stopping. The reason being that some thieves will follow a driver in hopes they stop sooner. The chances of them following the driver for 250 miles are lower.
The best way to protect your cargo is to take a layered security approach. Create a process and train employees on the process. That process should include running background checks on all drivers and training employees on basic security protocols.
It’s worth taking the time to bolster your processes and procedures. One way to do this is to revise the shipment process by requiring trucking companies to provide information to your company at least 24 hours before pick-up. The information should include the name of the driver and carrier, truck number, and insurance details.
Additionally, don’t pack the trailer until right before it departs. Put steps in place to prevent anyone from leaving filled trailers overnight. Before releasing the load to the driver, take photos of the driver, truck, and bill of lading, as well as capture the driver’s fingerprints.
Avoid putting information on the package or tractor-trailer that reveals what’s in it. This may not stop someone who will take the risk to steal a trailer, but it can reduce temptation. No one wants to go to jail for trying to steal something useless.
Processes are only effective if employees follow them. That’s why it’s important to hold security training. Keep everyone vigilant by conducting security training and reviewing processes at least once a year or more often.
Warehouses and distribution centers believe they can reduce cargo theft by posting security guards. Unfortunately, this greatly increases operating costs. Besides, you have a better option that is more affordable to thwart cargo theft. That’s video surveillance.
How Video Surveillance Help Reduce Cargo Theft
Video surveillance technology takes a proactive approach to security and helps deter crime. Its high-resolution cameras can see faces and other identifying information. If a company finds out about theft after it occurs, you can review video surveillance footage to see what happened and collect information to help make an arrest.
You can’t always have employees everywhere 24/7. Yet security cameras can see everything and a trained monitoring operator watches them. All footage is stored for later retrieval as needed. You can also post surveillance cameras where trucks check in and at the loading docks.
To increase the chances of catching activity as it happens, you’ll want to ask about cameras that rely on a combination of analytics and human intelligence. Analytics monitors for a specific activity and alerts the monitoring operator. The person responds based on the activity. It could be issuing a warning through an audio speaker, calling the police, or both.
Remote video surveillance does more than help deter crime. For example, a company’s fleet truck damaged a car during the daytime, but no one caught it. Fortunately, the remote video surveillance system did. The security operator zoomed in on the truck to document the license plate, fleet number, and driver’s face.
Companies use video surveillance to find bottlenecks and breakdowns in processes and procedures. A proactive video surveillance system like the one from ECAM combines video analytics and human intelligence to maximize security. You’ll benefit from complete site monitoring and faster response times. The technology pays for itself within months since the service can cost up to 60 percent less than the price of security guards.
Here are other security services that help reduce cargo theft:
- Video review: Search hours of footage for activity and evidence.
- Security partnership: Partner with a company that has connections to the police.
- System health check: Ensure your system always works properly.
- IT services for remote support: Access IT staff 24/7.
- Management reporting: Receive reports with the results of your video surveillance.
Two other options you may want to investigate to help reduce cargo theft are long-range surveillance and license plate recognition. These technologies can obtain distinguishing information such as the thief’s face, license plates, and vehicle number. It depends on your business and property layout.
ECAM can design a security plan to meet your requirements. To learn more about cargo theft deterrents, please contact us.
