It’s time to stop blaming most product shortages on the supply chain. Actually, the supply chain is still responsible for some of the problems, but not all of them. One of the scariest shortages hit home with parents of infants. That was baby formula.
The shortage of baby formula had nothing to do with the supply chain shortage or the Port of Los Angeles developing a more efficient operation causing a pile-up of cargo. That one was caused due to a shortage of truck drivers to pick up cargo. However, it creates a new problem of having too much cargo sitting around. The real cause of the baby formula shortage was a recall from one of the largest manufacturers.
Do you love hot sauce on your food? It will be hard to find sriracha sauce. Its shortage is caused by a drought in Mexico that affected the growth of pepper plants. Nonetheless, all these scenarios affect cargo theft.
Business Insurance quotes data from CargoNet showing cargo theft losses soared to $19 million in the first quarter of 2022 for the United States and Canada. This is a 73% increase over the same period in 2021.
“Cargo theft is often driven by a demand or shortage,” Scott Cornell, transportation lead and crime and theft specialist said. That’s why it’s no surprise these four trends are having a big impact on cargo theft.
1. Product Shortages Due to Issues Unrelated to the Supply Chain
The baby formula shortage was the result of the manufacturer holding a voluntary recall of baby formula. Within two weeks of restarting production, the facility shut down again due to severe thunderstorms and torrential rain that flooded parts of its plant. Parents whose kids love a specific peanut butter brand were also frustrated as a recall also emptied the shelves of Jif peanut butter.
No doubt, the supply chain has been hit hard since the pandemic. Now with Russia’s invasion of Ukraine, the problems continue because many import corn, wheat, and sunflower from the region. Sanctions against Russia drove up the price of fertilizer.
It turns out Ukraine is one of the world’s largest producers of corn and wheat as reported in the Dallas Morning News. Experts predict it will only export about half of the usual amount in 2022 to 2023. These shortages are driving up prices. Fortunately, the U.S. has a surplus of wheat and corn. Despite this, prices will most likely go up.
Many products contain cornstarch and corn syrup. It’s not just people who consume corn. Pigs and chickens eat corn and soybean meal. This not only increases the cost of the crops but also pork and chicken proteins.
Mother Nature deserves some of the blame. The drought in Montana and North Dakota has affected the durum wheat supply. Many use this ingredient to make pasta. Drought also impacts hay production and pastures. The word is that the U.S. Department of Agriculture has predicted a decrease in the availability of beef because the weather is affecting its cost.
Other shortages include computer chips and laptops. That’s why electronics have been the top items for cargo theft in 2021 and 2022.
How do product shortages affect cargo theft? When something is in short supply, costs climb. And that makes the product worth more. Thieves steal items in high demand because they know they can easily resell them and get top dollar for their stolen goods.
Even before the shortage, baby formula was one of the top targets for theft as explained in The Wall Street Journal. Now, the supply problems are driving companies to increase the security of cargo to prevent theft.
2. Worker Shortages Affect Many Industries
Summer is a time for vacation. Unfortunately, many people heading out on vacation or traveling for business are finding their flights canceled. Just one day in June, airlines canceled more than 1,400 U.S. flights, one of the peak days of travel. Airports have seen one-fourth to one-third of all of their flights canceled.
The biggest cause of the cancelation is the worker shortage, especially pilots. This can affect cargo shipments. Another factor affecting pilot shortage is the complexity of the training it takes to become a qualified airline pilot.
Moreover, a Dallas Morning News article references Allied Pilot Association reporting mandatory retirements for pilots at one airline will peak in 2025 as many age out. Consultants expect a shortage of almost 20,000 pilots by the end of 2022 and 60,000 by 2029.
The U.S. Chamber of Commerce states that the healthcare, transportation, and food industries have had the highest job openings. Healthcare, transportation, and social assistance have low quit rates while the food sector continues to experience high quit rates. The industries struggling with the largest number of unfilled job openings include professional and business services, financial, durable goods manufacturing, wholesale and retail trade, and leisure and hospitality.
Many industries affect the supply chain of other industries. For example, the Port of Los Angeles and manufacturing facilities are able to do their jobs. However, they’re stuck with a larger load of cargo because of the lack of truck drivers.
The worker shortage means fewer people are on the business property. Fewer people mean fewer eyes to keep watch over every part of the business. A big factor is the inability to move cargo. The more cargo that’s not on the move, the harder it will be to secure it.
That’s why it’s no surprise the American Journal of Transportation (AJOT) shows cargo theft trends have changed from on-the-move, vehicle-based thefts to cargo sitting around. Cargo theft in storage facilities jumped by almost one-third. There’s also a rise in insider infiltration into operator organizations.
3. The Supply Chain Continues to Hobble
The aforementioned Wall Street Journal article indicates the perfect storm of product shortages due to supply chain issues and recalls makes products more attractive to cargo theft.
4. Inflation
Product shortages, tenuous supply chain, and worker shortages together contribute to the rising cost of living. Everyone is paying more for groceries and gas. Costs have soared for many goods as inflation hit a 40-year high in December 2021 writes Alex Gailey and Jason Stauffer in NextAdvisor. Higher prices affect supply and demand.
The article shares Bureau of Labor Statistics data showing energy costs have increased by more than one-third, gasoline is up almost 60%, and proteins like meat, poultry, fish, and eggs are up almost 13%.
“The COVID-19 pandemic caused a shock to the world economy, disrupting supply chains and contributing to major delays in shipping,” Gailey and Stauffer said. “Labor shortages and surging consumer demand have only exacerbated this problem. With many items in short supply and the cost of shipping going up, prices are increasing.”
To make matters worse, cargo theft of goods that are in high demand affects supply. It’s a vicious cycle. These four trends push for the need to increase security to help prevent cargo theft.
How to Prevent Cargo Theft
The most effective way to help deter cargo theft is layered security. It starts with your people. You can have all the right security processes and technologies in place, but it only takes one human mistake to open the door to cargo theft. Start by running background checks on new employees and all drivers.
Companies should have security processes and then train employees on those processes and basic security protocols. Requiring everyone to follow procedures isn’t enough. Test the process by doing surprise checks, random samplings, and self-audits.
The Wall Street Journal shares the precautions companies take to protect their cargo. It includes everything from staying on top of who handles and transports the goods to adding tracking technology and special locks to cargo. To track who handles the goods, invest in a system that can accurately track and monitor shipments.
A good way to close the gap of human mistakes is to add video surveillance with remote monitoring. Unlike traditional reactive security solutions, remote video surveillance takes a proactive approach to security and helps deter crime.
Security specialists install cameras in strategic locations around the property and anywhere cargo is stored. Remote video surveillance containing high-resolution cameras can monitor everything in your business at all times. The cameras can watch over the cargo, parking areas, trucks, loading docks, and the insides of the facility.
If anything happens, trained monitoring operators can quickly assess the situation in real time and take action. This could mean activating an on-site speaker to warn the intruders they are being watched, as well as calling to dispatch local police.
Should an incident occur during the day when the cameras are likely not being monitored in real time, security analysts can review the recordings to obtain identifying information you need to determine what happened and who was involved. These videos can be shared with law enforcement and anyone else who needs evidence of what happened.
Not just any remote video surveillance technology will work. Look for high-quality security cameras that rely on a combination of video analytics and human monitoring operators. The marriage of video analytics and trained monitoring operators will multiply the chance of catching something suspicious before anything happens.
Security cameras with remote monitoring can do more than avert crime. One time, someone driving a company’s fleet truck hit a vehicle during the daytime. None of the employees on the property saw it happen. But someone did catch it and they were located far away from the property.
A monitoring operator in a remote location spotted the accident on the security cameras. They zoomed in on the truck to capture the driver’s face, license plate, and fleet number. It was more than enough information to identify the driver.
Recall that one of the biggest problems with cargo theft is that the cargo is spread out. They’re not always in secure areas. Remote video surveillance can help overcome this challenge. It can monitor all comings and goings anywhere there is cargo, employees, and your expensive assets.
With the right video surveillance system, you could receive a quick return on your investment. To learn more about remote video surveillance and how it can help cargo theft, check out the guide to Remote Video Surveillance: More Than Just Catching Criminals. For a customized security plan that maximizes your ROI, contact us.
