If there is anything we’ve learned from a good Hollywood heist film, it’s the simple advice that when trying to solve a caper, always follow the money.
And when it comes to crime along the nation’s supply chain, there is no amount of Hollywood magic that can replace that lost revenue.
CargoNet estimates $223 million in cargo was stolen across all cargo theft events in 2022. A huge hit to the businesses along the supply chain with an average loss of $214,104 for each incident.
The reach and effect of those stolen goods extending from the shippers and retailers profit margins all the way into pocketbooks and wallets of the consumer. A ripple effect that directly correlates to inflation. It’s simple Economics 101—when the demand exceeds the supply of goods, you can bet your bottom dollar that your bank account will feel the pinch when paying those suddenly higher prices.
And what types of freight gets targeted is anything but arbitrary. “These cargo thefts are driven by profitability. Criminals target what is easy to move and what is in demand,” explains Brian Hale, former senior level official at the Department of Homeland Security.
Most Targeted Goods
- Household items
- Food and Beverage
Often, there is a direct link between stolen goods in the supply chain and the times we live in. In 2020, thieves targeted pandemic related items such as toilet paper, and personal protective equipment such as hand sanitizer and masks. With so many people still working from home, electronics like computers and printers and household items like appliances and furniture have caught the interest of cargo bandits. Recently, rising food prices such as meats, dairy, and grains have created an increased number of food and beverage items being targeted. In fact, eggs were so expensive, there were reports of people buying chickens to ensure their own personal supply of eggs and a push to paint Easter potatoes because eggs were just too valuable.
When it comes to supply chain disruptions, we often think of blood pumping, high-octane chases, and robberies reminiscent of the latest Fast and the Furious flick. And while there has been some dramatic video and reports of moving train heists in California, where gangs jump aboard moving freight trains, pilfer each train car of its contents, while throwing the packaging out the doors, this is far from the norm.
The bulk of supply chain disruptions happen when the inventory is sitting idle at warehouses, points of transfer, parking lots, and distribution centers. The saying goes that cargo at rest is cargo at risk.
Ports, warehouse operators, and shipping companies are all in a constant battle with the sheer amount of volume they move and the extensive routes they cover. It’s unsurprising that most thefts occur in port cities that serve as commercial hubs where massive coordination along with sitting cargo are in constant play.
Most Targeted States
*These three states accounted for 46% of all supply chain thefts in 2022.
Part of the challenges of keeping cargo safe can be attributed to challenges in the labor force. The inability to hire enough workers at ports and warehouses can cause delays in the supply chain and inventory sitting waiting to be unloaded or moved. “It creates a vulnerability. It’s extending an opportunity for theft and exploiting gaps. That coupled with delays can cost millions of dollars,” says Hale.
In addition, Hale stresses that it’s not just about quantity of employees, but quality. “A majority of these thefts involve someone from the inside aiding in some way,” he said. And from his experience at Homeland Security these heists are usually orchestrated by organized crime syndicates.
As shipping or transport of goods has become increasingly interconnected, companies are relying on more vendors or third-party shipping and trucking companies to help complete the links in the supply chain. Hale says that with that interdependence comes more risk. “Companies can’t just be concerned with their own security practices; they need to be concerned about the practices of those partners they rely on.”
Ways to Prevent Supply Chain Disruptions
- Companies should vet their vendors or third-party shipping companies. Utilize reputable organizations that take security and compliance seriously. Ensure their security protocols match your own.
- Invest in hiring practices and employ extensive background checks for employees. Train them on proper inspection and preventative measures and implement standard operating procedures they can follow.
- Utilize trackers in shipping containers so you can monitor their whereabouts.
- Invest in high quality locks that mitigate tampering.
- Make sure points of entry like fences, gates, doors, and windows are shored up.
- Install surveillance cameras.
- Increase security patrols on-premises.
- Ensure areas are well-lit.
Whatever measures one takes to ensure the security of their goods, Hale advises on taking a layered approach to security. “You need to have a robust system in place.”
After all, the smoother you can pave the supply chain road from the unexpected bumps, the better chances you’ll have of keeping your cargo from falling off the proverbial truck.