Is your business at a higher risk for cargo theft? It's important to find out because the price of cargo theft has soared in recent times. Anytime a company becomes a victim of cargo theft, their bottom line will feel more than the loss of their cargo.
The cost of stolen cargo requires a great many sales to replace the loss. A study mentioned in SupplyChainBrain gives an example involving stolen digital cameras worth $200,000. According to the study, it would take 10 times the number of sales, or $2 million, to offset the loss. The fragile supply chain could make it very hard to do that.
The low supply and high demand are largely driving up prices for many things. This includes the materials and goods that make up the products in stolen cargo. For example, a shortage of computer chips is creating problems for multiple industries. If the products in the stolen cargo contained computer chips, then it's going to cost more to replace them. Add to that the needed sales to make up the difference.
Cargo theft has gotten bad. WJCL 22 reports cargo theft costs companies and customers $30 billion. The numbers related to theft will likely be much higher. That's because cargo theft remains greatly underreported. Many businesses won't report cargo theft because they don't want to risk paying more for their insurance premiums. They fear the public will find out about it if they report it.
What makes cargo theft attractive is that organized crime gangs can steal thousands of dollars within minutes. Where are these thefts taking place? According to TT Club, one-fourth of all cargo theft occurs in facilities. Not far behind is the theft of containers or trailers. The U.S. Cargo Theft Report from Sensitech reveals the average loss value per incident during the third quarter of 2021 was $337,000.
Additionally, cargo theft exacerbates the problems with the supply chain. Criminals target things with high demand. When they successfully take cargo, it drives down supply. The shortage has caused a delay for many products and goods.
Dealerships are struggling to have a large enough inventory of their new and used cars. Part of that is the shortage of chips. Chipmakers are having to make tough decisions about where to send their chips. The automotive industry is just one industry that depends on these chips.
Computers also need these chips, and many customers ordering computers end up waiting longer than usual because of the shortage. Companies are finding their reputations at stake with these issues even though it's out of their control. Most consumers don't pay attention or see the connection between the supply chain and their orders being delayed.
The rising costs of materials also come into play. When companies have cargo stolen, it will cost more to manufacture more. That’s because the materials used to create products and goods have gotten more expensive. Therefore, companies can't afford cargo theft with rising costs and a brittle supply chain while putting customer loyalty and brand reputation at risk.
So what industries are at a greater risk for cargo theft? Here are three that are strongly affected.
A variety of consumer goods are at high risk for theft and pilferage because of their high value and ease of reselling on the black market. This is especially the case with electronics, including phones, video game consoles, TVs, software, and computers. The Sensitech report lists the average loss value for electronics is $332,765, miscellaneous is almost $40,000, and clothing and shoes — prepare yourself — is $1.8 million.
While these products tend to have serial numbers and tracking, criminals know they can see a high return on these items that are often in demand. Sensitech's report shows miscellaneous products were the most targeted product type of cargo theft. Electronics follow closely behind as do home and garden.
In the list of cargo theft by product type from Sensitech, building and industrial supplies is in the fourth spot right behind consumer goods. Aside from consumer foods and alcohol (see next category), this category is the only one to record increased average values when compared to previous quarters per the Sensitech report. The average loss value for building and industrial supplies is $44,683.
The advantage of pilfering building supplies is that it's hard to track them. Unlike consumer goods, they don't typically have serial numbers or tracking. Buyers won't know better.
In terms of theft by product types, the food and beverage industry is the next category behind building and industrial. Like building supplies, it's much harder to track products from the food and beverage industry. One category of food and beverage that has seen a huge surge in theft is alcohol with a 67% increase between the second and third quarters in 2021. The average loss value for this category is $102,640.
This category is the easiest to get away with theft because these products tend to be consumed and have little packaging. This creates a challenge to obtaining evidence to prove theft. Many food and beverage items have seen costs climb as NextAdvisor shows inflation hit a 40-year high in December 2021. Crooks know they can make a large profit when reselling food and beverage.
A trucking company representative quoted in a news story from Global News says when it comes to security that many businesses cut corners. Instead of saving on costs, they pay more. Hence, it's crucial to take action to prevent cargo theft.
A simple first step is to educate your employees. Use data to show them why it is vital to deter cargo theft. Walk through how it affects the business, employees, and customers. Discuss the tactics thieves use to swipe cargo. The company needs to be extra cautious on holiday weekends because that's when cargo theft tends to rise dramatically. In an advisory before Labor Day, CargoNet shares the following suggestions to protect your company from identity cargo theft and identify fraud plots:
In terms of the 250-mile trip, educate the driver about the need to have enough fuel and rest to drive at least 250 miles from the pickup station without any stops. Explain that organized crime gangs will follow a driver for up to 250 miles. It decreases the risk of cargo theft when they don't stop until they've driven for more than 250 miles.
Minimizing cargo theft requires a layered security approach. Start by creating a process and training employees on the process. This needs to include conducting background checks on all drivers and new employees. All employees, new and long-term, must undergo regular training on basic security protocols.
One way to fortify your procedures is to revise the shipment process by requiring trucking companies to share information with your company at least 24 hours before pick-up. The information will include the name of the driver and carrier, truck number, and insurance details.
The process should clearly advise not to pack the trailer until right before the trailer departs. Another way to reduce your cargo theft risk is by never leaving filled trailers overnight. Additionally, don't release the load to the driver until you've photographed the driver, truck, and bill of lading as well as take the driver's fingerprints.
Processes only work when employees follow them. That's why you want to hold security training on a regular basis. It keeps everyone vigilant. A good way to remind everyone about security is with remote video surveillance.
Video surveillance technology is proactive security that helps deter crime. The high-resolution security cameras can make out faces and other identifying information. You can't always have employees everywhere at all times.
To increase the chances of catching activity as it happens, ask about security cameras that use a combination of video analytics and human intelligence. Analytics monitors for a specific activity and alerts the trained monitoring operator. The person can respond appropriately based on the activity. It could be issuing a warning through the audio speaker, calling the police, or both.
If you find out about theft or a problem after it occurs, video analysts can review video surveillance footage to find out what happened and provide enough information to help the police make an arrest.
Remote video surveillance does more than avert crime. Here's a true story. A company's fleet truck damaged a car during the daytime. But no one caught it. Fortunately, a remote video surveillance system did. The security operator zoomed in on the truck to capture the driver's face, license plate, and fleet number. All footage is stored for later retrieval as needed. You can also post surveillance cameras where trucks check-in and at the loading docks.
A proactive video surveillance system like the one from Stealth helps maximize security as you'll benefit from complete site monitoring and typically faster emergency response times. The technology can deliver a quick return on your security investment. The high costs of products and materials more than justify the need for security. You'll help protect your cargo and your employees while ensuring they follow processes and procedures.
To learn more about video surveillance and how it's possible to do more than deter cargo theft, check out the guide to Remote Video Surveillance: More Than Just Catching Criminals. For a customized security plan that fits your requirements and maximizes your ROI, contact us.