We asked ISCPO 2017 speakers and attendees to share the most pressing shifts and trends that are affecting supply chain security today. The future truly is NOW when it comes to protecting, securing, and managing goods as they flow through the supply chain.
Aligning a supply chain security framework with customers’ buying behavior
“The continued growth of online commerce and consumers who are time-starved drive the ever-changing face of supply chain. More and more home or workplace deliveries open up opportunities for the retail and service industries. But with these opportunities comes risk. Fraud, theft, worker injury, increasing reliance on 3rd party partners just to name a few. If the loss prevention community does not keep step with the changes, organizations will lose billions in profits. The key will be the industry coming together realizing that brick and mortar has changed and will continue to change. Partnering with an organization like the ISCPO can only help in calibration, education, and change.” – Byron Smith, Corporate Asset Protection Manager, 7-Eleven Inc
“The ability for consumers to order something immediately and expect to have it on their doorstep within 24 hours without even visiting a retail location is a huge shift, affecting every facet of our industry.”- Glenn Master, Director Loss Prevention, Environmental Health & Safety, Newgistics
Balancing Prevention vs Response Activation
“Whether businesses ship their own deliverables or outsource their transportation, the expectation is that there are appropriate security measures in place to protect the freight. This involves a considerable investment in time and resources to provide this level of assurance back to the business. Failing to front load these costs today within the business may lead to losses and reactive spending 2,3 or 4x that tomorrow. The most successful prevention programs provide a multi-faced approach including well-contrived transport security requirements, a robust audit program, and an investigatory process. Implementing an effective prevention strategy is not easy and in many cases tend to evolve over years of trial and error.” – Wes Bank, Director of Loss Prevention, DHL eCommerce
Having the Right Talent
“The gap between brick-and-mortar professionals and supply-chain asset protection experts has grown exponentially, and the ability to hire talent is strained. It quickly became evident that successful supply-chain talent was defined as logisticians with an expertise in asset protection versus asset protection experts learning logistics, let alone supply chain. The net became much wider, the systems became more advanced, and the skill sets needed to be shored up quickly. Today, there are a handful of domestic and global SMEs that understand where to find the golden nuggets and how to expose the vulnerabilities. You can see the evolution of security to loss prevention to retail asset protection to supply-chain asset protection to eventually its final evolution—supply-chain risk management. It’s likely that omni-channel will eventually be absorbed into the supply-chain risk management umbrella.” – Maurizio Scrofani, President & Chief Innovation Officer, MPS Solutions
“We are no longer simply LP professionals dealing with shrink. Supply chain security is an integral piece of our organization’s risk management strategy that requires investment in the tools, data, and people that not only enable companies to keep up with their customers’ expectations but also to manage risk throughout the whole supply chain loop.” – Glenn Master, Director Loss Prevention, Newgistics
Innovating and Keeping Up with New Technologies
“The implementation of new technologies in the logistics industry has become a differentiating element and in Deutsche Post DHL Group we remain at the forefront with the introduction of different technological devices, including drones. We develop solutions that optimize the resources of the customers and see a great potential in technology as a tool to make supply chain operations more efficient and secure.” – Jeronimo Sosa, Sr. Director/Regional Security Head, DHL Supply Chain
“One trend, facial recognition, highlights the potential issues happening in a store for the asset protection team. But a better way would be to look at the feature recognition software available to solve the same problem but in a much more efficient way. In retail the trends ebb and flow with the asset protection team being in the ascendancy at one stage before the sales team take over. This is often triggered by trends within the company or the industry as a whole. If the latest trading figures shown an unacceptable level of shrink then the focus moves away from sales lightly and there is often a tightening of procedures. The scarce resources of a retailer are at times redeployed into asset protection spend to combat this risk. That is until the next inventory review cycle show an asset protection positive impact of the business that appears to be under.” – Maurizio Scrofani, President & Chief Innovation Officer, MPS Solutions
Truckers Carrying Guns? Still a Taboo Topic
JUNE 12, 2017
The Mustardseed Truck Stop on Highway 167 in Sumner, Wash., wins little love: “filthy,” “disgusting,” “overpriced” are but a few of the many scathing reviews offered by truckers reluctantly paying $13 for a 12-hour break on its premises.
It’s also a former crime scene, where, on March 8, 2016, 52-year-old Piotr Pietrzykowski was stabbed to death in his white cab. He was driving for Top Line Express, a company founded in 2011 in Schaumburg, Ill.
His violent death, reported only by the local media, remains unsolved more than a year later.
Pietrzykowski’s slaying is one of 27 reported driver killings nationwide between 2010 and 2015, according to Bureau of Labor Statistics’ data. It also prompted a debate on whether truckers should be allowed to carry guns for protection.
“It’s the Wild West. You’re on your own,” said Norita Taylor, spokeswoman for the Owner Operator Independent Drivers Association, which represents 158,000 members.
Unlike the Wild West, though, where many carried a six-shooter and rarely hesitated to use it in their own defense, today’s drivers face a much different and more challenging environment.
Frustrated drivers are increasingly at risk as a drastic shortage of parking — an estimated 300,000 spots are available for more than 3 million drivers — makes dark, remote spots the default place for mandatory rest.
Truckers most often were killed on duty — 12 slayings — while parked on a local road, street or highway, according to BLS data. Another seven were killed in a parking lot or garage not owned by their direct employer. Truck drivers were the victims of 5 percent of reported workplace homicides between 2011 and 2015, according to the federal agency.
While there is no national law prohibiting truckers from carrying properly permitted firearms, it’s still a questionable practice. Myriad city, county, state and trucking company policies make it nearly impossible for truckers to legally carry firearms in their trucks.
That leaves drivers who choose to bring a firearm on the road caught between complicated state and local laws, and their fear of being attacked while alone and far from help.
“You have a very deep need for national reciprocity so that our rights for self-defense get extended across the United States,” said Evan Nappen, an attorney in Eatontown, N.J., who concentrates on firearms and weapons law. “Most civilians are not as concerned with this issue, but this is drivers’ living.”
But others said there is little data available that would show whether firearms would better protect drivers from crime.
“I think you have to weigh the safety and security of the truckers and whether the ability to carry a weapon increases their ability to protect themselves,” said Tim Lytton, a law professor and gun regulation expert at Georgia State University. “We don’t know the extent to which arming truck drivers or allowing them to carry across jurisdiction is going to increase their safety or decrease their safety.”
Even if a driver has the legal right to own, or carry, a firearm in his or her home state, each state, and sometimes each county or even municipality — like New York City, Chicago and Washington, D.C. — may impose its own much tougher laws.
A driver found carrying a gun in New Jersey faces a minimum mandatory prison sentence of 3 ½ years and as much as 10 years, Nappen said. He recently successfully defended a Marine, a military police officer who brought his MP-issued handgun home to New Jersey from his workplace in Quantico, Va.
“Truckers are more likely to have this problem than anyone I can think of,” he said. “They know they’re vulnerable to violence, and they also don’t realize how harsh New Jersey law is. The individual has to choose between who they fear more, cops or criminals.”
Short of guns, drivers are relying on other things they are allowed to carry in their cabs and which they can use as weapons, including club-like objects such as heavy-duty MagLite flashlights, tire irons and pry bars. Some take dogs in their trucks to alert them if someone gets too close to their cab.
Robert Palm, a father of two young children and a 26-year veteran driver based in Albuquerque, N.M., told Trucks.com he is careful to protect himself, but wouldn’t provide specifics except that, “I guarantee you, the end result will end in hospitalization.”
“Most of what truck drivers are dealing with aren’t so much legislative issues, it’s company policy issues,” said Kevin Michalowski, a firearms advocate.
Trucking companies’ insurance policies may prevent them from allowing their drivers to carry firearms, said John Goldberg, a professor at Harvard Law School.
“If the companies have liability insurance policies, it is possible that the insurers have told the companies that the insurance will not cover shooting-related liabilities,” Goldberg said.
Calls placed to companies large and small, and to safety experts to discuss how they teach drivers to remain safe without a firearm offered little insight. No one wants to discuss it.
“I don’t think there’s any training for safety,” said Taylor of the Owner Operator Independent Drivers Association.
“I’m afraid we just don’t have much to say on the topic because it varies significantly carrier to carrier and driver to driver,” said Sean McNally, spokesperson for the American Trucking Associations.
Yet drivers of armored vehicles have had the legal right to carry firearms across state lines since the passage of the Armored Car Industry Reciprocity Act, or ACIRA, in 1993.
UPS provides its employees with explicit training, said one UPS driver who asked that he not be identified because he was not authorized to discuss the shipping company’s safety policies.
“Do not leave your cab. Do not engage in anything. Do not put yourself in harm’s way,” he said they’re told.
Other company precautions include GPS tracking of every UPS vehicle, he said. Company drivers are given a credit card that can be used with their own PIN and only to buy fuel, the driver said.
“We’re not allowed to carry guns,” he added.
Like others drivers —now constrained by the use of electronic logging devices that track their driving time and tighter regulation and oversight of work hours — the UPS employee said he worries about finding safe places to rest.
“It’s very dangerous. The 30-minute rest rule has made it worse,” he told Trucks.com. “You always have to be thinking ahead. There’s only so many places you can stop on the turnpike.”
Chad Boblett, a long-distance driver and owner-operator who also runs Ratepermilemasters, a Facebook page for drivers with almost 11,000 members, said he can feel vulnerable on the road.
“I’m a very easy target for anyone who wants to rob me,” Boblett said.
On a recent delivery, veteran trucker Palm ended up “40 miles from the nearest rest stop” in an isolated part of Connecticut. He had to stop to comply with the hours of service rules governing how long drivers can work before taking a rest break.
“I sat there for 10 hours,” said Palm, who founded and runs truckersfinalmile.org, a 4-year-old registered 501c (3) charity that covers the costs of returning drivers who’ve died on the job — whether killed or having died a natural death — cross-country to their bereaved families.
With the drastic shortage of parking spaces “you have no safe haven,” Palm said. “I believe every trucker should be armed.”
Editor’s note: Trucks.com staff writer Clarissa Hawes contributed to this report.
Caitlin KellyCaitlin KellyCaitlin Kelly frequently writes for The New York Times, where she has published more than 100 articles. Winner of a Canadian National Magazine Award, she is a former reporter for The Globe and Mail, Montreal Gazette and New York Daily News. She is the author of “Malled: My Unintentional Career in Retail” and “Blown Away: American Women and Guns.” She can be found on Twitter: @CaitlinKellyNYC.
This guest article was written by ISCPO Board Member and past Chairman, Glenn Master.
I was having a light-hearted discussion a couple of weekends ago with my attorney, who just happens to be a 20-year friend of mine. We were discussing news media hype about self-driving cars, artificial intelligence, and packages being delivered by drones. He had mentioned that he could not stand going to the store and having to deal with the ‘shopping experience.’ A typical guy thing, right? He then mentioned that several days prior he had ordered salt and pepper shakers from an online retailer because the ones his wife bought never provided the exact amount of salt or pepper that he desired. He continued to explain that on the following Saturday, a day after he placed his order, he received a call on his cell phone from an unknown individual named Gary who wanted to confirm the correct address for the delivery because my friend lives in a rural area. Thirty minutes later Gary showed up in 1982, powder blue Olds Cutlass, which was stuffed with as many packages as humanly possible in a vehicle of this size. My friend got his salt and pepper shakers and an oil stain left on his driveway from the Cutlass.
This scenario, albeit amusing, happens every day around America and the world. Although self-driving cars, artificial intelligence and using drones to deliver packages is where we are going, it’s not embedded yet into the mainstream of business. Therefore, for now, at least, you are getting Gary at your doorstep.
Consumers currently spend an estimated $2 trillion dollars annually online. That number is expected to double in the next five years as third-world countries are now enjoying the luxury of internet connectivity. This means that any company who is doing business online is scrambling to find the quickest and cheapest way to get that parcel from their distribution center to your doorstep. So what happens to that internet order then, which you expect to be delivered after you click ‘confirm’? Let us go back to Gary and a few questions. Who is he? Does he work for the company that you ordered the item from? Does he have a criminal record? Is he mentally stable? Not to mention is his 82’ Cutlass going to leave a huge oil stain on your driveway. The average consumer frankly, does not really care. They just want their order.
These questions, however, should be asked by every Loss Prevention professional responsible for ensuring package integrity once it leaves their company. What I am finding though is that most of my colleagues do not have a clue and here is why they should. What if Gary has a criminal record and for every five packages he delivers, he steals two other packages. What if Gary is mentally unstable and decides to assault the customer during a delivery. What if Gary decides that by 2 pm he is tired of making deliveries, so he drives to the back of a mini-mart and tosses the remainder of the undelivered packages in the dumpster? The following scenario not only has become problematic for the transportation provider but also now has become a priority for the Loss Prevention department to figure out. The customer never received their original order, forcing them to contact the retailer and complain. The retailer then has to initiate another order in the system, which results in additional labor costs when the merchandise has to be re-picked and shipped once again. More importantly, the customer experience has been eroded because they did not receive their order in the first place.
These are just a few examples of thousands that take place daily in the world of the supply chain and will continue to grow as the consumer is choosing to point and click versus getting in their car and traveling to a store.
These are the five things you need to do today if you have any responsibility for Ecommerce.
Understand your business.
I believe it is in our inherent nature to focus only on what our scope of responsibility is with respect to work. If there is any belief that another company has responsibility for that customer order then the mind set becomes a ‘kick-the-can’ scenario or that it’s someone else’s problem. Take time to understand the full scope of your operation, especially outside the four walls of your organization.
Include the full Ecommerce Supply Chain in your LP Strategies.
Unless your company has a fleet of airplanes, long-haul semi-trucks or parcel vans, you have to rely on other service providers. This means that although the package your customer orders may be picked packed and shipped from your distribution center or store, your company must contract out with other service providers to get that package to your customer’s doorstep. That means that package might touch two to four different companies prior to your customer receiving it.
Make Analytics Your Best Line of Defense, and Offense.
I have learned a valuable lesson in the world of Supply Chain Ecommerce Loss Prevention. It does not matter how many companies, countries or sets of hands touch that parcel. If the parcel is scanned by each entity capturing a barcode/order number and you have the ability to review that information, you can figure out where it has been lost or stolen.
Don’t Sweat the Small Stuff, Literally:
You cannot waste your time chasing one-off packages in a supply chain environment. In addition, this philosophy must be conveyed to the folks in other departments within your organization, who are frantically sending 100 plus emails searching for one package. Develop a comprehensive analytics report from missing scans in a simple excel spreadsheet. Include all the touch points. If packages are being stolen or continually lost, the trending will stick out like a flashing neon sign. Spend your valuable time chasing the trends in your network.
Learn to be a Teacher & Advocate Within Your Organization:
I have spent countless hours working investigations that involve other Loss Prevention departments and Law Enforcement. I have found that many of my peers in both industries do not understand how a package goes from point A to B and the complexities that it entails. Here is some simple advice from my college Algebra teacher years ago when I could not understand a complex problem. “Glenn, I am going to explain this to you like a five-year-old.”
A little patience and proper communication will go a long way in breaking down the complexities of the packages traveling in the supply chain.
Now is the time for Loss Prevention professionals to embrace the shifts in consumer buying behavior and realign their teams and focus on meeting the needs of the consumer.
Glenn is the Co-Founder and inaugural Chairman of the ISCPO. He currently is employed with Newgistics as the Director of Loss Prevention, Environmental Safety & Health and as an Adjunct Professor at Texas Christian University. He has over 20 years of Loss Prevention experience both domestically and internationally with companies such as Motorola, Henry Schein and Office Depot. Glenn’s educational background includes a Master’s Degree in Criminal Justice from the University of Cincinnati and Bachelor’s in Criminal Justice from the University of Texas-Arlington.
This guest article was written by ISCPO Board Member, Scott Cornell, 2VP Transportation Lead, Crime & Theft Specialist at Travelers. Check out Travelers’ Supply Chain Management hub for comprehensive transportation resources.
No matter how effective your loss prevention team and systems are to protect your cargo and transportation networks, you’ll ultimately get the call, at some point in your career, to learn that your cargo has been compromised.
Cargo theft happens fast. It’s difficult, at best, to give concise, specific tips on cargo theft investigations. My disclaimer at the outset is that these will be high-level insights, which can be applied to several scenarios where there are some similarities as well unpredictable differences. While some consistency is needed in any approach, there also needs to be flexibility to adjust to the unexpected differences in any given case.
The first thing you’ll want to do following a theft is quickly getting out as much information as possible. The likelihood of recovery drops off considerably after the first 48 hours, so you’ll want to quickly determine what police department will have jurisdiction over the theft and make contact with them. Depending on the loss scenario, this is not always simple – you need to know who to call and develop the right industry contacts. Additionally, you can share whatever information you can with industry resources such as the regional security counsels, which will get your theft information out to a large audience of people. Use all available industry resources, like CargoNet, for example, and share the information with them. In my experience, they will help you get the word out regardless of whether or not you’re a member – the cargo theft community is a tight one, and people will try and help if they can.
Not only will this information reach private sector personnel and resources across the country, and even internationally, but also law enforcement resources who have experience in cargo theft. The security counsels share the alerts so the information will quickly spread across the country. You’ll want to include as much information as you can – provide the truck and trailer identifying information, the location of the theft, what was taken, any information you may have already been provided or gathered, and how it took place. If possible, include as much detail as possible about the stolen commodities so law enforcement knows what they’re looking for.
Where to Start
After thoroughly distributing information about the theft to all available resources, your investigation will almost always need to start in two immediate locations. The first is obvious – where the theft occurred. The second location, which may be less obvious if you’re not familiar with these types of investigations, is the area you suspect the cargo may be headed. As you conduct more investigations over time, you can develop a good feel for who may have taken your load and where they may be headed. It’s important to begin your investigation in both locations. If you don’t have any idea, reach out to someone who may. Your load is almost certainly not the first load they’ve stolen and most groups have a pattern of behavior.
One of the first things you’ll need to do is to scan the theft location with a fine-tooth comb and then work your way out. Were there any witnesses or possible video captures on-site or on the most likely routes as you expand your search outward? Quite often there are video resources outside of the theft location that you can identify and request recordings from – you could also enlist the help of law enforcement to make the request. While the videos may not always be of the best quality, you don’t know what they may show unless you get it. Even if it’s from someplace outside of the theft location it may at least give you an indication of what direction your load was headed when it was taken.
“All Hands On”
The third tip is the “all hands on” method. You must talk to everyone who touched or worked on moving that load. The driver is the most obvious, but who else knew about that load? Who arranged for it, packed it, loaded it or was involved in the deal in any way? In today’s world of cargo theft and specifically in what we call “strategic cargo theft” – methods such as identity theft and fictitious pickups – someone may have been involved in the deal with the intent of stealing your load. There may have been a breach in informational security, and you may find someone somewhere along the way had some involvement in the theft. It’s imperative to be thorough in pursuing all possible leads.
While I wish it was as straightforward and easy to conduct cargo theft investigations as it may seem, it really never is. It is my hope that these tips will at least get you headed in the right direction. More than anything, the value of networking cannot be stressed enough. If you know the right people and have the right resources available, you’ll know what to do and who to call first in that awful moment when you discover your load has gone missing. Organizations like the ISCPO can help you do just that.
LPM Special Report on Supply-Chain Security: Trailer and Warehouse Theft, Investigations, and Loss Prevention Tips from the Experts
Our friends at Loss Prevention Magazine recently asked Glenn Master (ISCPO board member and former Chairman) and John Tabor (ISCPO board member) how organizations can anticipate, prevent and investigate cargo theft as well as maintain logistics protocols that mitigate risk when it comes to supply chain security.
Protecting more than just merchandise
According to FreightWatch International, a risk management service provider, the average value of a stolen shipment in-transit can be around $300,000. One incident of organized retail crime, a problem we all consider a serious threat, nets about $8,000. Bank robbery? A pittance at about $2,000.
Efficient and effective supply-chain networks are necessary to successfully compete in the global retail market. It then rests on the loss prevention professional to take the necessary steps to gain a better understanding of the overall supply-chain process and how the process impacts the business so that he or she can effectively support shrink reduction and profit-enhancement efforts.
In terms of understanding, even the term “supply chain” can be viewed as a misnomer. This is not merely a seamless link of interconnected, proportional pieces that takes us from a point of origin and leads to a single ending destination. It is a sophisticated, interdependent network of positions, processes, facilities, functions, responsibilities, tasks, transport, and technology that all culminates with delivering products and services to our customers.
From a loss prevention management perspective, our attentions must focus on disruptive risk. As described by one industry leader, “Assuming the enterprise has taken the necessary precautions to ensure product quality, integrity, and safety, the primary risk to any organization posed by the supply network is disruption. Any disruption in production or delivery will result in potential lost sales, decreased revenue, margin erosion, and profit loss.” These risks can exist at each origin location, at each intermediate location through which the product travels, and along each transportation link between points.
Companies must design operational plans that will serve to identify potential threats; evaluate how, when, and where they may occur; develop effective approaches to mitigate losses, and build programs that improve efficiency and business recovery. Theft is certainly a primary consideration, but specific risks will vary depending on a variety of factors specific to the unique supply-chain network. Potential risks must be identified and analyzed at each point along the network, building the plan that serves as the cornerstone of supply-chain resiliency.
- Understand the threat to your organization that cargo theft represents
- Master the details of the entire supply-chain process
- Get up to speed on the LP pro’s role in stopping loss
- Pinpoint those stops along a shipment’s way where the danger is greatest – including your own distribution center
- Integrate supply-chain security knowledge into your day-to-day responsibilities
- Establish practices, processes and a company culture that will save your organization millions of dollars, and put your career on a fast track to success
This article was written by Glenn Master and was originally published in Loss Prevention Magazine.
The more we learn about the supply chain, the easier the process is to manage
If you grew up in the 1970s, you may remember the popular public-service announcement for parents that asked, “It’s 10 p.m. Do you know where your child is?” The statement seemed almost nonsensical, but it shared an important message for parents to ensure that they always make a conscious effort to know the whereabouts of their children.
Similarly, how is it that loss prevention practitioners can so often be ignorant of supply chain management and the whereabouts of online consumer orders as they move through the supply chain?
The evolution of e-commerce in retail has been accelerating exponentially in recent years. With the ability for consumers to order anything from anywhere using a smartphone, Americans are now spending over $300 billion annually online. This is challenging retailers to keep up with the demand, and without their own transportation fleets, they must rely on third-party entities to get merchandise to their customers.
What does that mean for retail loss prevention? If you don’t have a clear understanding of supply chain management and how a package moves through the supply chain, your ability to investigate in-transit losses will be virtually impossible.
A General Lack of Involvement
In today’s environment, I have found that most retail loss prevention professionals have a limited knowledge of their supply chain. In most companies, supply chain management is typically managed by the transportation or operations department. Contracts are negotiated with multiple freight carriers, and loss prevention rarely has any involvement with those negotiations or contract review. Furthermore, if freight is lost or stolen, claims are often filed unbeknownst to loss prevention, and, in most instances, settled without the benefit of an investigation being conducted at all.
This way of doing business is standard. When you consider the immensity of the global supply chain, it becomes clear why it’s so difficult to obtain actual loss rates for freight that has been stolen in transit. This standard reflects the notion that whoever handles the freight last is ultimately responsible for paying a loss claim. If multiple carriers are involved, those claims will continue to be filed and paid until ultimately a company at the end of the transportation line will be stuck incurring the loss. This basically equates to kicking the can down the road, and retailers are typically unconcerned about the problem as long as they are made whole on the loss.
Eroding the Customer Experience
But what is the real cost here? The customer never received their original order, forcing them to contact the retailer and complain. The retailer then has to initiate another order in the system, which results in additional labor costs when the merchandise has to be re-picked and shipped once again. More importantly, the customer experience has been eroded because they did not receive their order in the first place.
We have all ordered products online and know exactly what it feels like not to receive the order on time. We understand the frustration that mounts when we have to contact the retailer and complain. Now imagine if that customer’s order was stolen, perhaps with similar thefts occurring with other customer orders in the same geographical area. If all your company is doing is filing a claim for the lost packages and not involving loss prevention to investigate the matter, how are the thefts going to be stopped? They won’t … and therein lies the problem. This is why it is so crucial that retail loss prevention becomes an active participant in the supply chain aspect of the business.
The Transportation Process
The first step is to gain an understanding of the supply chain management process. As mentioned earlier the majority of retailers that do business online do not have their own transportation infrastructure. This means they have to contract out transportation companies to move freight. One of the most costly services in business is transportation. Therefore, most companies will look for the most cost-effective way to move that box from the warehouse to the client.
This cost will vary greatly depending on several factors, which would include the time it takes to deliver the package, the distance the package has to travel, and the method of delivery. Typically, the more convenient the process is for the customer, the higher the transportation cost will be for the retailer. As a result, most companies will look for a balanced approach that will satisfy both the customer expectation and the costs associated with transporting the order.
This is where the choice of a transportation provider will come into play. Some providers have a large, global network with their own state-of-the-art warehouses and a comprehensive global fleet comprised of both trucks and airplanes. Furthermore, these companies often have comprehensive loss prevention programs that include both personnel who can investigate loss and physical security that meets industry standards. Because this method can accommodate the convenience of all shipping requirements, costs are normally higher.
In addition, the ability to negotiate claim payment if the package is lost or stolen can also become more difficult. In essence, you’re placing a lot of trust that the package will transit through the network without a problem. If it is lost or stolen, there is little recourse for the retailer because such contracts are often worded in such a manner that payment will not be pursued on claims unless a predetermined loss percentage threshold is met.
Because of the claim payment restrictions, the retailer may then consider contracting with a third-party (3PL) transportation provider as an alternative method to collect the merchandise from the warehouse, consolidate with other freight throughout the client’s network, and complete the delivery process. These carriers are generally regionalized using an independent contractor model for their driver base. This means that the drivers are not the transportation company’s own employees, and in turn, they contract the route out to a provider that works for them. That route owner, or “Independent Contract,” then may have several contracted drivers working for them, covering multiple routes within the 3PL.
Taking it even a step further, the company might subcontract all the routes to a fourth-party transportation company with a similar model, totally unbeknown to the retailer. These companies are designed to move freight at the parcel level and specialize in last-mile delivery to the customer. The problem these carriers face is their operations rarely have any loss prevention personnel on the payroll. They lack basic security standards, such as CCTV, burglar alarm systems, key control, or criminal background checks completed on their contractors. They also lack basiinventory control practices to monitor the retailer’s freight within their network or when it’s turned over to the driver.
This is a recipe for disaster when it comes to theft, and you will often find high-percentage losses when dealing with these carriers. While they are willing to pay loss claims to retailers, they rarely have methods to determine the root cause of the losses. Furthermore, the loss issue is only resolved after thousands of dollars of losses have occurred, and the carrier is threatened with losing the retailers’ business. This is why it is so crucial for retail loss prevention to be involved in the transportation process from the beginning.
Six Steps to Building a Proactive Supply Chain Management Plan
Following are some key steps that should be taken to build a proactive plan.
- Have a strong relationship with your transportation department and be part of the carrier approval process.
- Develop a comprehensive security protocol that the carriers must adhere to and ensure that protocol is added in the contract with the transportation provider.
- Visit some of the locations and conduct an audit of their operations. This should include evaluating their security and, more importantly, the operational controls in handling your freight.
- Develop loss analytics that can identify loss trends before you start receiving customer complaints about loss. These analytics should identify trends by carrier and driver route.
- Be proactive in meeting with the carrier’s facility management so they understand your expectations, loss trending analytics, and method of investigation. You will be surprised how receptive they will be for your help to identify problems before they get out of hand.
- While visiting provider locations, see what other clients’ freight they are moving. If losses are occurring with your freight, they are probably occurring with other retailers’ freight as well. This allows a perfect opportunity to work a joint investigation with other loss prevention peers.
The supply chain can be a very confusing entity and one that many retail loss prevention professionals avoid. But the more we learn, the easier the process is to manage. Rather than assuming that a package is safe once it leaves the confines of your four walls, get engaged in the supply chain management process. You may be surprised to find that with a little effort and some planning, your ability to identify these losses and work with the carriers that handle your freight is a relatively easy process.
|BSI’s Annual Global Supply Chain Intelligence Review
We’d like to invite you to join us for BSI’s Annual Global Supply Chain Intelligence Review on March, 22th, 2017 at 2:00pm Eastern Time, US.
This webinar will provide a high-level overview of the top security, corporate social responsibility, and business continuity risks, threats, and trends from 2016 as well as an outlook on emerging supply chain risks in 2017. BSI’s Annual Supply Chain Intelligence Review will provide data and analysis on an array of supply chain topics and disruptions in 2016, such as:
To learn more about BSI’s supply chain intelligence and register for the event, please click the link below:
BSI’s full 2016 Annual Global Supply Chain Intelligence report will be released following the webinar. Registrants will be sent a copy directly once available.
Mark Your Calendars!
The 2017 ISCPO Conference will again be held in Dallas, Texas on September 12th and 13th. The conference will be two power packed days addressing topics related to supply chain security, industry theft trends, global trends and investigations.
The conference will provide a great venue to network with global industry peers, transportation/logistics professionals, law enforcement, and select vendor partners. ISCPO members and other interested parties should consider attending. More information to come!
Are you interested in looking at the 2016 conference presentations, 2016 Conference & Presentations
ST. LOUIS, MO–(Marketwired – Dec 8, 2016) – USPack Logistics (USPack) a NewSpring Holdings portfolio company and leading same-day courier and transportation company, today announced that it has completed the strategic acquisition of JS Logistics. JS Logistics is widely regarded as a premier resource for product, storage, distribution and on-demand rush delivery services.
Headquartered in St. Louis, MO, with offices in Kansas City, Indianapolis and Memphis, JS Logistics has a long-established presence across the Midwest, which will serve as the regional operations base for USPack. The company’s state-of-the-art communications and fleet management systems feature next-generation route optimization software and unfettered supply chain visibility that will provide USPack and its clients with a greatly enhanced experience for tracking shipments in real-time.
“Joining forces with USPack Logistics expands our capabilities and provides the means with which to offer a more expansive suite of services to a wider demographic,” said John Cochran, JS Logistics, who will be joining USPack post-transaction as vice president of operations and special projects.
USPack has also acquired Woodridge, IL-based Best Courier and Delivery Service, whose years of ecommerce and trucking experience, and established best practices will resonate across USPack operations.
“Consumers now expect the option of same-day delivery, which helps bridge gap between shopping online and the ‘in-store’ retail experience,” said Brad Poulter, Best Courier and Delivery Service, also joining USPack post-transaction. “Being acquired by an industry leader like USPack bolsters our competitiveness and strengthens our position as a leader in ecommerce delivery.”
USPack, with a unique combination of leading-edge technology, best practices and service performance, provides transportation services to ecommerce, pharmaceutical, automotive, financial services, airline, legal, and healthcare organizations whose success depends on special handling and high levels of security. USPack is the first transportation company in history to earn Security Certification by the International Supply Chain Protection Organization (ISCPO). ISCPO Compliance is a highly coveted distinction given to third-party logistics carriers that meet the intense scrutiny of the ISCPO Carrier Security Audit, a framework for collaboration between customer and service provider, to mitigate risk and provide universal controls for secure package transport.
These transactions extend the breadth and depth of services USPack offers its clientele, and support the company’s continued expansion in both target regional and vertical markets nationwide.
Best Courier and JS Logistics are the seventh and eighth acquisitions for USPack, the third and fourth under NewSpring Capital, after most recently acquiring Parsippany, NJ-based Flash Courier, and Alexandria, VA-based Washington Courier in March 2016 and September 2015, respectively. With these transactions complete, USPack’s service footprint now covers 27 states utilizing more than 1,200 independent professional drivers across the country.
“These acquisitions mark the next phase in USPack’s expansion, both geographically and in vertical expertise,” said Mark Glazman, Executive Vice President, USPack Logistics. “Best Courier and JS Logistics are tenured service providers, each of which bring specialized services and highly-coveted attributes that not only reflect USPack’s commitment to customer satisfaction, but also align with our strategic roadmap for both the current environment and future growth.”
A recent study examining the highly competitive delivery market that caters to the rise in online shopping, showed that two-thirds (66%) of consumers have chosen a retailer based on the number of delivery options, and more than one-quarter of respondents (26%) said they use at least three parcel providers to ensure the best price and to mitigate the risk of lost packages or delayed delivery that might result from relying on a single provider.
“Same-day delivery services have become a key differentiator for brands hoping to distinguish themselves in a crowded, hyper-competitive market,” said NewSpring Holdings General Partner, Jim Ashton. “These acquisitions further USPack’s ability to capitalize on exponentially increasing demand.”
USPack, founded in 1986 by current CEO Peter Glazman, is based in New York, New York and provides custom transportation solutions for ecommerce, pharmaceutical, automotive, financial services, airline, legal, and healthcare organizations nationwide. Recognized as an innovator and service leader in the same-day transportation industry, US Pack operates in 27 states across the Eastern Seaboard, the Midwest and the Pacific Northwest regions of the United States.
About NewSpring Holdings
NewSpring Holdings, LLC, NewSpring Capital’s dedicated buy and build strategy, focuses on control buyouts and platform builds, targeting profitable, growing companies seeking a financial partner to better assist them in achieving their goals. NewSpring Capital, based in Radnor, Pa., collectively manages more than $1.5 billion of committed capital supporting more than 110 portfolio companies across its growth equity, control buyout and mezzanine debt strategies. Combining deep operating knowledge with financial and investing expertise, NewSpring Capital provides growing companies the financial resources, advice, network of contacts and strategic partnerships necessary to be successful. To learn more about NewSpring Capital, please visit http://www.newspringcapital.com/.