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Cargo Theft & Supply Chain Security

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  • Intro
  • About
  • Securing the
    Supply Chain
  • Security in a
    Warehouse or Yard
  • Cargo Security in
    Transportation
  • Supply Chain
    Cybersecurity
  • Benefits of
    Supply Chain Security
  • Ensuring Complete
    Supply Chain Security
  • Free Ride to the Top
  • Subscribe
  • Contact Us
  • Intro
  • About
  • Securing the
    Supply Chain
  • Security in a
    Warehouse or Yard
  • Cargo Security in
    Transportation
  • Supply Chain
    Cybersecurity
  • Benefits of
    Supply Chain Security
  • Ensuring Complete
    Supply Chain Security

About Cargo Theft & Supply Chain Security

What is Cargo Theft & Supply Chain Security

Supply chains are instrumental to business operations, commercial activities, and global trade.

It’s the pipeline for sourcing goods and materials for manufacturing as well as delivering products to customers.

It’s not just under constant stress to deliver, it’s also under constant attack.

Warehouse theft, inventory pilferage, missing cargo trailers, truck hijacks, and piracy on the high seas, these are just a few of the security issues hampering supply chain integrity every day.

Growing local competition, bigger international market opportunities that have opened up due to globalization, and better logistics solutions available today that allow manufacturers to move large quantities of goods at low cost, these are some of the reasons why running a secure supply chain is absolutely vital to the success of enterprises today.

A supply chain network prone to theft is a supply chain prone to disruption.

Supply chain disruption adversely affects an organization’s ability to run a lean supply chain operation, control costs, manage their just-in-time logistics and delivery schedules, and most importantly, meet customer expectations.

The dire need to ensure shipment security, build customer loyalty, and improve supply chain resilience is what’s pushing supply chain and logistics companies to invest more than ever before in securing the supply chain.

What is Supply Chain Security Management?

 

The impact of supply chain security differs depending on where in the enterprise supply chain you are.

For someone in logistics, it’s about “Delivery in Full” — getting what they need, where they need it, when it’s needed.

For someone in manufacturing, it’s about making sure their goods aren’t stolen, copied, or replaced with counterfeits before it reaches its destination.

For someone running an enterprise, it’s about making sure goods get where they’re supposed to with the least risk to the company’s bottom line.

However you see it, supply chain security management ultimately is a set of policies, processes, and protective measures put in place to ensure that shipments in a supply chain aren’t prone to theft, damage, misappropriation, or forgery.

It also covers the protection of resources like vehicles, storage and distribution centers, information systems, and other assets that are vital to supply chain operations.

 
  1. 1 – Proactive Supply Chain Security Management Measures

     

    This includes the identification of threats to cargo security, risk assessment and prioritization, as well as the development, deployment, and continuous improvement of measures to counter supply chain security risks; the ultimate goal is to prevent supply chain losses.

    In simple terms, proactive supply chain security measures include preventive measures like physical access control infrastructure such as doors, walls, fences, security systems such as CCTV, electronic locks, and alarm systems, as well as security processes such as personnel or cargo screening, adherence to strict chain of custody protocols, and an emphasis on procedural security measures.

  2. 2 – Reactive Supply Chain Security Management Measures

     

    This includes response and containment of events or situations that aren’t normally encountered in day to day supply chain operations; the ultimate goal is to minimize supply chain losses.

    In simple terms, this could mean responding to incidents of theft, warehouse break-ins, cargo trailer hijacks, or even remedial measures like buying insurance.

 

Supply chain security management covers the application of these measures to secure the components of a supply chain.

Securing the Supply Chain

 

There are three distinct parts of a supply chain:

  • Warehousing — which deals with the storage of goods within well-defined facilities like warehouses or yards.
  • Logistics — which deals with the movement of goods through transportation channels like road, rail, ocean, or air.
  • Information Infrastructure — which deals with the supply chain information sharing systems used to exchange data among supply chain participants.
 

With these in mind, there are actually two facets to securing a supply chain

  1. 1 – Securing the Physical Supply Chain

     

    Physical security is the first line of defense to secure a supply chain.

    Whether it’s securing inventory in the warehouse or transport security, access control measures (like keys, access cards, or container locks) and physically preventing unauthorized personnel from accessing inventory (using walls, fences, or secured parking lots) are the most common means of theft reduction in a supply chain.

  2. 2 – Securing the Digital Supply Chain

     

    Supply chain security has traditionally been about improving physical supply chain security.

    The growing adoption of technology for better connectivity and real-time information sharing in supply chains (particularly to improve decision making in global supply chains) has created one more thing for supply chain managers to contend with — digital supply chain security threats.

 

Threats to supply chain security vary from organization to organization. They depend on factors such as the nature of business, the cargo in question, the size and complexity of the supply chain itself, as well as other factors like geography, the law and order situation in a region, as well as safety and security measures used for a warehouse or for shipments in transit.

 

Supply Chain Security — A 6 Step Guide

1 Define the supply chain — map it, identify all the processes, places, and participants.

2 Analyze the risks — identify the elements that pose the greatest threats to a supply chain, assign each a priority based on the supply chain’s core goal (cost efficiency vs. cargo safety, for example).

3 Appraise the risks — assign them a dollar value to quantify the supply chain risk.

4 Target risk management efforts — prioritize risks to be addressed first based on priorities and the cost-benefit of risk mitigation.

5 Implement supply chain security measures — work on minimizing those risks through the right combination of supply chain security measures. Roll it out in phases based on risk priorities and the cost-benefit to decrease CAPEX impact.

6 Review security systems — Conduct periodic security audits and upgrades to ensure cargo security and supply chain integrity are ensured.

For organizations operating global supply chain operations, it’s also important to comply with international supply chain security certifications and new security initiatives as defined by:

  • World Customs Organization
  • Container Security Initiative
  • Customs-Trade Partnership Against Terrorism (C-TPAT)
  • Fast and Secure Trade (FAST)
  • Container Security Initiative (CSI)
  • Emergency Planning and Community Right to Know Act (EPCRA)
  • International Maritime Organization
  • Partners in Protection (PIP)
  • Authorized Economic Operator (AEO)
  • ISO 17712 - specification for container security seals
  • ISO 28000 - specification for security management systems for the supply chain
  • ISO 27001 - specification for cyber security management systems for the supply chain
 

Supply chains, especially global supply chains, have grown increasingly complex, which creates several points along the supply network that could be exposed to security threats or disruption.

Awareness of supply chain risks and threats — as well as solutions to counter them and prevent supply chain disruptions — are essential parts of successful supply chain management solutions.

7 Things You Need in a Cargo Security Monitoring System

 

Importance of Supply Chain Risk Management

 

Cargo theft losses every year amount to at least US$30 billion worldwide.

These figures may be far higher, since logistics operators tend to underplay (or not report) incidents of theft in order to reduce their insurance liabilities, besides, understandably, avoid losing business opportunities due to perceived weakness.

Bank robbers, if caught, could be imprisoned for a decade or longer. Cargo thieves, on the other hand, face stiff fines and relatively little jail time, depending on the nature of the crime in some countries.

Given the low risk and high rewards, cargo theft and organized retail crime are an ideal business opportunity for modern criminals.

As a result, cargo theft rates continue to rise steadily, and the impact of these losses is estimated in the billions.

The cost of stolen goods is only the tip of the iceberg.

Cargo theft incidents also lead to added expenses like:

  • The cost of replenishing stocks
  • Expediting the replacement of missing inventory
  • Additional labor and resource overheads
 

All of which are unavoidable after a supply chain disruption, at least, until operations normalize.

The dire consequences of supply chain theft include delayed time-to-market and risk a company or brand’s reputation, all of which could mean lost business opportunities.

Supply Chain Risk Management Concerns in the Warehouse or Yard

 

Warehousing and distribution centers are the strongholds of the supply chain.

These facilities are typically secured by a robust warehouse security system or yard security system, access to the facility is restricted, and operations within the facility are carefully monitored.

The most likely way for theft to occur in such controlled environments is if workers or employees are involved. Employee theft and pilferage are usually among the biggest causes for inventory shrinkage in a warehouse, yard, or distribution center.

Incidents of theft in a controlled supply chain environment like a warehouse or sorting center typically require collusion between several parties, especially between drivers and employees tasked with loading/unloading operations.

Supply Chain Risk Management Concerns in Transit

 

Goods in transit are goods at risk, and that’s been true ever since the earliest days of piracy and highway robbers.

Goods in transit are the most vulnerable to theft, because, unlike a fixed facility like a warehouse or yard, moving storage like shipping containers or cargo trailers are harder to secure against theft or pilferage.

Incidents of cargo theft in transit can range from stealing trailers or vehicles in transit, pilferage at unsecured parking lots or container yards, breaking into a cargo truck while the driver stops for food or fuel, as well as armed robbery or hijacking a vehicle on the road.

Supply Chain Cybersecurity

 

The transportation and logistics industry depends on communication and information sharing to manage day to day operations more efficiently. Unfortunately, cargo thieves are taking advantage of this dependence on technology, forcing supply chain security measures to account for digital supply chain security.

Sophisticated cargo thieves can (and often do) infiltrate an unsecured online cargo tracking portal, which gives them unrestricted access to shipping manifests and other sensitive information. They can use this to identify high-value cargo, spoof routing information to reroute cargo to an unintended (or unsafe) destination, or make legitimate pickups from an unsuspecting warehouse or distribution facility using forged paperwork.

Cargo theft by fictitious pickup has become more common in recent years as well. With access to pick-up schedules and other insider information, cargo thieves pose as a legitimate logistics company and simply drive off with a load, without anyone realizing what’s afoot until it’s too late.

Safety and Security Measures in a Warehouse or Yard

 

The first step toward securing the supply chain is securing the facilities where goods are manufactured and cargo is stored, sorted, or handled.

This generally involves a well thought out warehouse layout with easy access control as well as warehouse security measures such as:

  • Building security and monitoring — round the clock CCTV surveillance systems, guards, and alarm systems.
  • ppropriate access control measures — doors, locks, and other security systems that prevent unauthorized access and improve cargo security.
  • Routine security protocols — restricted access to private vehicles, checking outgoing transport.
 

The objective is to make theft both harder and riskier to commit.

How to Choose a Warehouse Security Monitoring System

Cargo Security in Transportation

 

The second step toward securing the supply chain is securing cargo when it’s most vulnerable — in transit.

While cargo security in a warehouse, storage, or distribution facility is usually well managed, it’s difficult to afford the same levels of security to cargo while it’s on the move. The global, decentralized nature of logistics operations today means companies have little to no control over how their cargo is tracked and handled once it’s handed over to 3PLs or other logistics players like shipping or airline freight companies.

Cargo security in transportation generally involves protecting cargo against theft, pilferage, and tamper while it’s being transported between secure storage facilities.

This includes:

  • Securing cargo containers or trailers using locks or other access control measures.
  • Using secure parking, storage, loading, and transit areas.
  • Checks at every available opportunity for signs of break-in or tamper.
 

How to Secure Shipping Containers and Cargo Trailers

 

Intermodal cargo is usually transported within shipping containers, which can be easily switched between specialized cargo container ships, railcars, and trucks.

Besides conventional container locks, there are generally two ways to secure a container or trailer against cargo theft or pilferage.

 
  1. 1 – Shipping Container Seals

    Besides heavy-duty shipping container locks, container security can be improved using mechanical or electronic seals that are affixed externally to container or cargo trailer doors. Depending on whether they’re meant to prevent intrusion or simply delay it, they’re made from materials including heavy-duty metals to plastic, and sometimes even simple paper. Damage to a shipping container seal can indicate if someone attempted unauthorized entry, or if the container or trailer doors (and perhaps the cargo) has been tampered with.

    Some common types of shipping container seals include:

    Mechanical Seals

    • Indicative seals — made out of materials that are easy to break without using tools, usually meant to indicate tamper rather than prevent entry. Examples include conch seals, pull-up seals, label seals, or tape seals.
    • High security seals — made out of rugged materials like metal or metal cable.
    • Padlock seals — either heavy-duty metal or light plastic padlocks.
    • Cable or wire seals — made up of a cable (metal or plastic) and a locking mechanism.
    • Bolt seal — a metal rod that’s secured with a separate locking mechanism.
    • Barrier seals — simple barrier mechanisms (on the inner locking rods of a container door) that have locking mechanisms and are designed to be reusable.
    • Strap seal — made using metal or plastic, similar to a wire seal in function.
    • Twist seal — made using a steel rod or heavy-duty wire that loops around a container or trailer door’s locking fixture.
     

    Electronic Seals

    • The need to secure high value goods such as pharmaceutical products and chemical shipments led to the development of several types of electronic or “smart” seals. Besides physical security features, smart seals also have information logging (such as cargo manifests) and information storage capabilities, accessible through hand-held readers (for ease of use) or GSM (to send out alerts in case of breakage or tamper) capabilities.

    • Electronic seals can also have additional embedded sensors (GPS, light, radiological, chemical, gas, etc.) that can provide additional information about the cargo container’s external conditions.

    Although most robust trailer locks and shipping container seals are designed to be tamper-proof, they’re not always adequate against physical intrusion or detecting tamper. Cargo thieves quite often simply remove a container or trailer handle or door to bypass locks or seals.

    In addition, even with electronic seals that work on RFID or NFC wireless technology, verifying a seal’s integrity is still a cumbersome manual process.

  2. 2 – GPS Container Tracking

    An offshoot of vehicle tracking for fleet security, GPS container tracking systems use a GPS tracker device affixed to the outside of a container or trailer that transmits live data about the location of the cargo container or transport.

    GPS container tracking is a good solution to recover stolen goods, especially for surface transport, in instances where cargo thieves hijack vehicles to steal a complete truckload.

    Are GPS Trackers Enough for Cargo Security & Theft Recovery?

  3. 3 – Smart Containers

    Smart containers are equipped with sensors that can detect intrusions like unauthorized door openings as well as anomalies such as a sudden change in container pressure or temperature (like when a hole is cut into the side wall of a container) that could indicate a breach.

    Smart containers also have other integrated sensors such as GPS (for easy tracking and recovery) as well as additional internal sensors to measure the condition of the cargo inside. Data from the container’s sensors are either logged on a data module within the container, or it’s broadcast to a central monitoring platform via handheld readers, fixed scanners, or GSM/cellular connections.

    Another, probably more viable option to (expensive) smart containers is the use of portable smart sensor kits that can be fixed to/within any standard container or truck trailer. These “smart kits” can turn any shipping container, truck trailer, or rail car into a “smart container”, giving logistics operations greater supply chain visibility for high-value cargo like pharmaceuticals, volatile chemicals, frozen food and other cold chain products.

     
     

    Deciding which container or cargo tracking solution is best suited for your cargo security needs depends on the specifics of your supply chain operations, the level of risk for your cargo type, as well as the geographies it traverses.

    How to Choose a Cargo Container Security Tracking System

Supply Chain Cybersecurity Management

 

It’s no secret that the secret to agility and dynamic optimization in supply chain operations is access to the right information at the right time. Connected supply chain operations struggle to balance data sharing and data security however, especially in an age of rapidly evolving cyber threats.

Combating data security breaches is another threat that supply chain risk management needs to prepare for. Hackers, tech savvy thieves, and organized cargo thieves now see supply chain information exchange systems as a vulnerable area that’s perfect for exploitation.

Given the distributed nature of global supply chain operations — suppliers, 3PLs, and several intermediaries are an integral part of the modern global supply chain data network now — keeping information limited to authorized users is a growing challenge.

Shipment information, seal serial numbers, delivery routes and schedules, these are some examples of sensitive supply chain information that, if divulged or misappropriated, can leave cargo exposed to threats like targeted pilferage or hijackings.

Some supply chain cybersecurity measures that could help contain risk include:

  • Securing sensitive/critical business data using procedures designed to protect it from unauthorized access and use.
  • Detailed system logs of shipping records, the personnel/partners that have access to shipping information, as well as when and where these records were accessed from.
  • Periodic information security audits.
  • Information security education/awareness drives for the workforce and supply chain partners, especially for those who routinely handle sensitive information.

Indirect Benefits of Cargo Tracking for Supply Chain Security and Efficiency

 

Effective supply chain security measures require significant investments in physical security, surveillance, access control equipment, as well as training and maintaining the manpower to operate everything. There are also additional overheads for maintaining the security system as well as communication and data handling infrastructure.

For some supply chain managers, the cost of security simply outweighs the benefits, and they’d rather invest in reactive supply chain security measures like buying insurance or maintaining buffer inventories.

What companies need to understand is that spends on security don’t just reduce cargo theft and shrinkage in a supply chain.

If you’re looking for options on how to improve supply chain efficiency, look no further.

Supply chain visibility — a welcome side-effect of supply chain security initiatives — can be leveraged to improve operational efficiency, streamline processes, and enhance overall supply chain efficiency.

Some of the most common benefits include:

  1. Better Visibility in Supply Chain

    Tracking cargo — whether it’s in a secure warehouse or a secured container — means it’s always accounted for.

    Live product or shipment tracking data can help boost transparency and accountability in a supply chain, and it reduces the time and effort it takes to perform routine tasks like inventory audits.

    Tracking data, over time, can be analyzed to help identify (even predict) bottlenecks, inefficiencies, and areas of risk in a supply chain — insights that can be acted on to reduce supply chain risk and increase supply chain efficiency.

    Another benefit of live cargo tracking data is its ability to inform better supply chain decisions based on current events. With the aid of real-time cargo tracking data, supply chain risk management can switch from reactive to proactive, working toward eliminating supply chain risk rather than just limiting it.

    Making Better Supply Chain Decisions with Better Data

  2. Eliminating the Uncertainties of an Unplanned Supply Chain

    Gaining better control over spends and cutting costs is an integral part of any logistics improvement plan. One of the surest ways to do that is to reduce uncertainty in the supply chain. Supply chain visibility enables supply chain managers to reduce deviations from optimum operating procedures, which has several other benefits like lower transit time and lesser uncertainty in ETAs. That, in turn, creates a more consistent and predictable flow of goods through a supply chain, which boosts supply chain reliability and resilience.

  3. Better Inventory Planning and Management, Better Cost-efficiency

    Lower theft and shrinkage levels in a supply chain mean there’s lesser need for buffer inventory to offset the uncertainties of an inefficient supply chain. That translates to lesser working capital tied up in excess inventory.

    Constant cargo tracking data can also be useful to make inventory management decisions based on live data, which can both increase the efficiency of inventory management as well as reduce the risks associated with Just-in-time (JIT) inventory.

     

    How to Mitigate Risk Associated with Just in Time (JIT) & Lean Inventory

     

    Lean inventory levels also lead to lower operating expenses by eliminating unnecessary product handling, administration, and management costs, which helps drive down supply chain costs further.

    Lower supply chain risk and uncertainty will inevitably lead to fewer supply chain losses, which could also mean discounted cargo insurance rates.

  4. Better Customer Service, Better Customer Loyalty

    Better supply chain safety, security, visibility, and efficiency ultimately improve a supply chain’s ability to deliver. With a secure delivery service, fewer missed windows of delivery, more accurate ETA predictability, more on-time deliveries, customer satisfaction — and the future business opportunities it brings — are all but guaranteed.

  5. Fewer Shipments Delayed at Security Checkpoints

    Certified secure transporters and logistics companies with a proven track record of good supply chain security generally enjoy better benefits at trade and customs checkpoints, where they’re subjected to fewer random cargo inspections and are flagged through security faster.

 

Supply chain security measures can have a positive impact not just on safety and reliability, it can be a powerful driver for efficiency and business growth in transport and logistics.

How to Secure Every Link in Your Supply Chain

 

Container security solutions, warehouse security systems, and other physical security measures designed to keep cargo thieves at bay, although effective, aren’t always reliable.

A supply chain security system that’s 100% reliable is possible, but the cost of operating it would eventually run a company into the ground.

While a certain amount of shrinkage is acceptable as a cost of doing business, there’s been a gradual — but decisive — shift in the outlook of modern supply chain security management.

Far more food, chemical, and pharmaceutical products are shipped over longer distances, and the number of intermediate handlers in the form of 3PLs/4PLs has also increased.

While nobody would lose sleep over a missing shipping container full of apples, a container’s worth of aspirin gone missing would make the evening headlines.

A lack of effective supply chain security measures in the transport of sensitive goods like food, pharmaceuticals, chemical shipments, or OEM parts could be devastating to the shipping company.

The consequences of pilfered medical supplies being replaced by counterfeit product could be life-threatening, besides the obvious public safety backlash the parent company would face.

The cost of product recalls, manufacturing and reshipping replenishment stocks, and lost market share would eventually dwarf supply chain security spends.

Rather than focus on simple preventive measures, newer supply chain security solutions aren’t doubling up on preventive measures to keep cargo thieves out. Rather, they’re better geared to detect cargo theft. Through a combination of GPS location tracking and real-time alerts, logistics and supply chain companies have a better chance to both contain cargo security risk as well as recover stolen cargo.

Modern cargo tracking and security solutions involve the use of discreet portable tracking devices that travel within a shipment.

By tracking cargo rather than the vehicle or transport it’s on, it’s easier to:

  • Track cargo from dispatch to final delivery — using the same tracking solution, regardless of route, transporter, mode of transport used, or shipment size.
  • Detect pilferage — using small, low-cost trackers affixed to every package in a large cargo shipment.
  • Recover stolen goods — vehicle trackers would, at best, lead you to the stolen container or trailer that was hijacked. Package trackers would lead you straight to the stolen goods themselves, improving the odds of recovering stolen goods.
 

6 Reasons to Switch from Vehicle Tracking to Package Tracking

 

4 Steps to Securing a Supply Chain

 

Besides conventional physical supply chain security measures designed to keep thieves out, here are four steps to securing cargo whether it’s in the warehouse or in transit.

1 — Tag Cargo With Active Tracking Tags (GPS or Bluetooth Beacons)

Affix a portable GPS tracking device to one or more items in a shipment. Current GPS tracking technology has evolved to a point where it doesn’t need to be on the periphery of a container or cargo trailer to get a good signal; tracking devices can be inserted within the shipment or individual packages itself.

If there’s a need to track every item in a high-value shipment, it’s more cost-effective to use several Bluetooth low energy (BLE) beacons that sync wirelessly with a single GPS tracking device while it’s in range. The GPS tracker device can monitor and detect the presence of beacons — and the packages they’re fixed to — in its vicinity.

Once properly deployed and ‘tethered’, a single GPS shipment tracking device can be used to keep track of several hundred Bluetooth package tracking beacons in its range.

 

How to Turn BLE into 360° Supply Chain Visibility

 

You could, in theory, use RFID package tracking beacons to accomplish the same.

RFID as a tracking technology in supply chains has a few limitations that are hard to ignore.

 

Is an RFID Security System Enough for Warehouse Theft Prevention?

 

The greatest advantage of using portable GPS shipment tracking device is that it travels with the cargo – allowing you to track multi-modal shipments with ease.

 

2 — Set Up a Real-time Supply Chain Monitoring System, and Alerts

Once the GPS shipment tracking solution is deployed, the next step is to monitor and log tracking data using a cloud-based always-online shipment tracking portal.

The system can also be used to set up rules like:

  • A preferred route — to ensure shipments stick to the safest route from the origin to destination. Any deviations could indicate a potential threat to cargo safety.
  • Maximum allowable idle time — a shipment at rest is a shipment at risk. Unless it’s a pre-decided rest stop or secure parking facility, it’s probably not a good idea for cargo to idle in-transit.
 

Once the rules are set, the next step is to set up alerts in case these rules are broken.

 

3 — Don’t Just Watch, Act

There’s no point setting up a cargo tracking and theft prevention system if nobody will act on the alerts. Monitor shipments as they happen, and make sure every odd event (unplanned stops, package beacons winking off, vehicle idling or slowing down at odd locations) is investigated.

The speed with which you respond is crucial in supply chain theft prevention; it could be the difference between recovering a trailer and recovering an empty trailer.

 

4 — Secure the Supply Chain Security System

Due to the nature of modern supply chains, it’s important to share information and ensure transparency to improve collaboration with other supply chain players. That advantage cuts both ways, however; there’s a possibility that sensitive shipment data could make its way to a cargo thief.

Supply chain cybersecurity is a growing concern among proponents of supply chain connectivity and digitization, who fear that the growing need for visibility could put the supply chain at risk.

Fortunately, there are existing solutions that can balance the need for information sharing with the need for information security in the supply chain, the most promising of which is blockchain in supply chain.

 

Blockchain – A Solution for Supply Chain Cyber Security?

 

Blockchain, the technology that cryptocurrencies are built on, is perfect to enable real-time data sharing and data-driven decisions in digitized supply chains. It allows organizations to both share information and restrict access to it at the same time through a cryptographic key (the blockchain equivalent of user credentials) all in one neat package.

Assess-Your-Supply-Chain-Security-Risk