The Next Ecommerce Emerging Market: The Middle East

With the UAE positioning itself as a global financial center, retail has become one of the main economic drivers.

When you hear anything regarding the Middle East, the overwhelming tone are visions of war, terrorism, and instability. Our course, if you look at the last 18 years, this perception comes with good reason. This region of the world has experienced war on multiple scales and also underwent a pro-democracy movement called the Arab Spring. These events have obviously left numerous countries without its long-term dictators, causing a power vacuum. However, there is one country that has been untouched by this turmoil—the United Arab Emirates (UAE). Recently, I had the opportunity to travel for business to the UAE and to my surprise, global commerce is alive and well with expansion at a feverish pace.

Before I provide insight into this economic revolution, you first have to look at the history of this Arab country and how its leaders wanted to seize on an opportunity. Sheikh Zayed, ruler of Abu Dhabi and the first president of the UAE, oversaw the development of the Emirates and steered oil revenues into healthcare, education, and infrastructure. The UAE’s economy is the most diversified in the Middle East, while its most populous city of Dubai is an important international aviation, logistics, and maritime hub.

Nevertheless, the country is much less reliant on oil and gas than in previous years and is economically focusing on tourism and business. The UAE government does not levy income tax, although there is a system of corporate and value-added tax that was recently implemented. In addition, the UAE’s geographical location, lying between London and Hong Kong, has allowed it to become a launching point to other countries from a supply chain methodology.

Shopping Is in Style

Burj Khalifa, United Arab Emirates

With the UAE positioning itself as a global financial center, retail has become one of the main economic drivers. This led to the development of the world-famous Dubai Shopping Mall. I have to admit, when I heard the term mall, my first thoughts were of what we are now seeing in the US as a dying entity. However, Dubai has taken this concept to a completely different level. Imagine a three-story, 5.9-million-square-foot complex that includes 1,200 retailers, five-star restaurants, and an outdoor, Las Vegas-style pavilion boasting a water propulsion and light show synchronized to music that reviles the Las Vegas Bellagio. All of this at the base to the world’s tallest building, the Burj Khalifa. After experiencing this incredible venue, calling it a mall seems almost petty.

Another concept that has definitely evolved has been omni-channel. When you think of shopping at a venue that boasts valet parking of Lamborghini’s and Bentley’s, who has time to actually carry bags around? After speaking to numerous store manager’s, I discovered that a large percentage of their revenue comes through omni-channel methods with most purchases made in-store and then delivered to the customer’s home via third-party delivery service.

Population Is Driving Commerce

By far though the largest economic engine that has been increasing substantially over the past five years is e-commerce. Dubai’s population is approximately 3.2 million, over half of which is comprised of foreign nationals from 170 countries. These foreign nationals are moving in droves to the UAE simply for one thing—work. Whether it be for a position in the booming construction industry, the newest hotels or restaurants or a senior-level manager job in finance, the expat population has now overtaken resident nationals. This is now creating a global melting pot of sorts that is driving the demand for retail e-commerce.

As you can imagine, with all this growth brings growing pains for certain businesses, including the transportation industry. However, I was pleasingly surprised though to find the different sectors in the supply chain evolving very quickly to the changing environment.

Case in point: I had the opportunity to meet with my loss prevention peer for our contracted transportation provider in the UAE. After two days of touring distribution terminals, seeing their final-mile delivery service and meeting with team members in the LP department, I was completely taken aback. Not only did the services that they provided mirror what most US loss prevention practitioners would recognize, but the attention to detail of the program was very impressive.

As my counterpart explained, the circumstances of moving parcels throughout regions in the Middle East pose greater problems than just theft. Much of their security practices in the supply chain are designed around screening parcels for the potential of explosives. As it was explained to me, when that much attention to detail is given to a single parcel, incorporating theft prevention methods naturally came easy.

In addition, with the number of foreign nationals working in the UAE, the government has extremely strict visa stipulations. For example, if someone has been terminated due to a theft situation, the company has the ability, in cooperation with the police, to turn that individual over to a governmental regulatory body. Within 48 hours the ex-employee can have their visa revoked, removed from the country and banned from reentry. It was explained to me that this policy has been a huge help for theft prevention.

Similar Challenges

Regardless of what type of business you are in or where in the world you are located, it seems loss prevention professionals all deal with the same challenges. After witnessing first-hand the positive effects of a very comprehensive LP program with our contracted carrier, I had to ask my peer what his challenges were. The response I received actually made me chuckle a bit.

In an emerging economy such as this and with all the expansion taking place, his greatest challenge was trying to ensure his management team and employees followed basic standard operating procedures that were already in place. He said this problem was also compounded by the fact that his operators were always questioning the cost of security since there hasn’t been a real problem historically with theft or other improprieties. I am sure this sounds familiar to anyone who has had the same challenges working with operations within their own organizations.

The Future Is Bright

In whatever part of the world that has an emerging market, consumers’ desire to shop—be it through traditional brick-and-mortar or e-commerce—is going to be part of that emergence. In the UAE, this is no exception. Not only has the government promoted consumerism but also is creating an environment of tolerance among cultures at a scale I have never experienced before. Advertising is everywhere to not only promote the latest fashion or jewelry, but also reminding the population to treat each other with respect and kindness.

I can honestly say that after departing the UAE, I now have a completely different outlook on the Middle East.

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3 Ways Carriers Can Demonstrate Competency in Maintaining Cargo Integrity

Ask Your Carrier These Three Questions

Businesses moving goods through their supply chains have two choices: transport it themselves or outsource it.

Transportation is typically one of the largest expenditures within a supply-chain operation. Most businesses choose to contract out at least a portion of their delivery volume, allowing them to realize immediate savings from not having to maintain a fleet of vehicles, routers, dispatchers, Department of Transportation regulatory compliance, driver recruiting, training, insurance, and a multitude of other costs. However, some degree of uncertainty regarding cargo loss, damages, and service deterioration are unrealized costs that must be contended with when relying on a third party to transport your goods. While the decision to outsource is usually a no-brainer, the challenge for loss prevention professionals becomes how to best manage to this risk without increasing costs beyond operational savings.

Transportation leaders and their loss prevention counterparts should be equally focused on transport expense and performance. The difference, however, is that transportation leaders are accountable to their organizations for quality of service and invoiced expenses or “today’s costs,” while loss prevention typically assumes risk-mitigation tactics for cargo loss and other liabilities or “tomorrow’s costs.” Regardless of focus, both teams need to feel confident that their service providers can demonstrate competency in maintaining cargo integrity and performance. So how can service providers accomplish this?

Carriers, listen up! There are usually three basic qualifiers to be considered “competent” or low risk by your clients.

1. What are the carrier’s industry certifications?

The first question businesses should ask a potential carrier is, “What certifications do you have?” Achieving industry certification is a key competency in maintaining cargo integrity. Embracing industry standards benefits both the carrier and their supply-chain clients. It’s essentially assurance that the carrier understands and practices proven prevention controls that when executed correctly will cause clients to trust that their deliverables are in good hands. Here’s why certification matters:

  • It reduces carrier waste or nonoperating costs when effective and efficient controls are practiced. Ideally, a lower cost operator can pass the savings onto potential clients during an RFP.
  • Carriers can stand confidently behind one set of industry standards that should address most client-specific security demands. Therefore, carriers and clients don’t need to recreate the wheel with proprietary checks and balances or adhoc requests.
  • Overall, it improves audit compliance, reduces risk, and minimizes losses for both the carrier and client.

There are many good industry or government certifications available, some of which include:

2. Does the carrier have in-house LP leadership?

Carriers need to invest in hiring a loss prevention head to evolve training, auditing, and investigatory programs. The carrier must invest in capable personnel who are trained to prevent loss occurrences and reduce their impact should they occur. Too many times untrained or unexperienced personnel chase losses underground, only to see it resurface again at a later time. This not only results in a significant waste of the carrier’s time and money but also frustrates clients. Without the experienced loss prevention practitioner to maintain vigilance, inadequate training and audit compliance comes at a cost through unsustainability and repeat failures. By having in-house LP support, clients have trust that the carrier is committed to a culture of prevention and compliance. Client loss prevention teams come to rely on colleagues who speak the same language in terms of training, audit, and investigation.

3. How does the carrier establish a culture of transparency and responsiveness when engaging with client issues?

Customer service is always a number-one priority with any client in any industry. It is critical that clients feel they have complete transparency in understanding how the loss occurred and appropriate corrective action plans. This goes hand-in-hand with having an in-house LP practitioner as outlined previously, but all too often operational or sales support may try to more positively spin the results of their investigations without addressing the true factors or controls that either failed or were never put in place. Clients expect accurate fact gathering and reporting without omission while trying to respond back to their customers for the failed deliveries. In other words, clients are accountable to their own customers in e-commerce, pharmacy, banking, and other industries, so carriers need to be cognizant of the end-customer demands for the products they’re delivering. This is a systemic issue in LP that spans all facets of the carrier’s business, from sales, technology, and logistics.

So the next time you are going through the RFP process, I strongly encourage you to speak to the above areas for optimal consideration. I know that I will be inquiring.

Wes Bank

WES BANK, LPC, is the director of loss prevention for DHL eCommerce, overseeing risk management, government regulatory, audit, investigations, and physical security. An active International Supply Chain Protection Organization (ISCPO) board member (currently serving as Vice Chairman), he founded and chaired the ISCPO’s Carrier Security Audit Committee with the objective to improve “final-mile” carrier compliance.

2020 ISCPO Conference Announcement

 

 

 

 

Mark Your Calendars!

The International Supply Chain Protection Organization would like to announce the date of its 2020 ConferenceGlobal Supply Chain Security Conference” on March 3rd – 5th at the 7-Eleven Store Support Center in Irving, Texas.

There will be a wide-range of topics related to global supply chain security, Ecommerce, industry trends and investigations.  As in year’s past, the conference provides a great venue to network with global industry peers, transportation/logistics professionals, law enforcement, and select vendor partners.

We encourage Solution Providers to participate in this event.   Those interested should submit requests to Byron Smith at byron.smith@iscpo.org

We are looking forward to seeing everyone this year, so mark your calendars.  Event registration information will follow soon.  For more information, visit our website – www.iscpo.org

About the International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

ISCPO Appoints Two Members to its Board of Directors

The International Supply Chain Protection Organization (ISCPO) welcomes

Tom Meehan and Malcom Beckwith to its Board.

Dallas, TX (August 29, 2019) – FOR IMMEDIATE RELEASE – The International Supply Chain Protection Organization (ISCPO.org) announced today two new additions to its Board of Directors: Tom Meehan – CSO & CISO of CONTROLTEK USA and Malcom Beckwith – Safety/Loss Prevention Manager of Tuesday Morning.

Tom Meehan

Tom Meehan, CFI is a leading loss prevention expert in all things cybersecurity and information technology. He is the chief strategy officer and chief information security officer at CONTROLTEK, the retail technology editor at Loss Prevention Magazine and the co-host of the Loss Prevention Research Council podcast CrimeScience. His industry influence is also present through his roles as Sr. Technology Advisor, board member and Innovation Team Chair with the Loss Prevention Research Council.

Tom is also the author of “Evolution of Retail Asset Protection: Protecting your Profit in a Digital Age” which uncovers traditional loss prevention and asset protection are responded to shifting retail environments and how technology and innovation are changing everything, while some methods can’t keep up.

Prior to joining CONTROLTEK Tom was director of technology and investigations with Bloomingdale’s, where he was responsible for physical security, internal investigations, asset protection systems and data analytics. Prior to his 13-year tenure at Bloomingdale’s, he worked for Home Depot in loss prevention, and has had various technology, loss prevention, and operational roles at several other companies.

ISCPO Chairman, Byron Smith says, “The ISCPO is excited to have Tom Meehan join our Board of Directors with his expertise in loss prevention and technology. The members and the supply chain security industry will benefit for Tom’s knowledge.”

Malcolm Beckwith

Also joining the ISCPO Board is Malcolm Beckwith, who has an extensive background as a loss prevention executive. He currently works for Tuesday Morning as the Safety/Loss Prevention Manager. Previously, he worked for Ross stores as the Director of Loss Prevention for the supply chain network. He also served as the Regional Loss Prevention Director for Ross Stores.

Prior to his tenure at Ross Stores Malcolm served as the Director of Loss Prevention for Sears Stores and as the Assistant Vice President Loss Prevention for Marshalls/TJ Maxx stores where he was responsible for all Marshalls stores and distribution centers located throughout the United States and Puerto Rico.

Lastly, he served as CEO/President of Beckwith and Associates Executive Search. Malcolm has previously served on the executive board of directors for the Northeast Boys Scouts of America and the Boys and Girls Club of MetroWest New England.  Throughout his career Malcolm has been profiled in many diversity articles that included the Boston Globe, Boston Herald, Evansville Courier, and the Loss Prevention Magazine.

ISCPO Chair, Smith adds, “Malcom brings extensive experience in supply chain operations and security. His institutional knowledge in retail supply chain will assist the ISCPO as we enhance our collaborative approach in supply chain security.”

For more information about the ISCPO and its Board: https://www.iscpo.org/site/leadership

About the International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information, contact:

Byron Smith

ISCPO Chairman

byron.smith@ISCPO.org

 

Optic Risk Solutions and Uniforms, INC. join the list of ISCPO Preferred Vendor Partners

–NEWS RELEASE–

Dallas, TX (August 23, 2019) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce two preferred vendors partners have joined to support its members and the supply chain security community. The speed of business has exponentially accelerated the supply chain, and the ISCPO members rely on a variety of vendors for innovative tools, technology, and services to help them make their departments and flow of goods run effectively.

 

Optic Risk Solutions provides enterprise wide security and loss prevention solutions designed to enhance the overall success and profitability of an organization. As a global consulting firm, they are dedicated to helping identify risks within an organization and reducing overall exposure to loss. With their experience in Risk Management, Loss Prevention, and Safety, they will create a customized risk-averse plan that becomes part of your business and company culture. Their mission is to protect your people, your product, your property, and your profits. Optic Risk Solutions Website

 

Uniforms, Inc. is a premier embroidery and apparel business serving nationally recognized corporate brands, local companies, and municipalities based in Dallas, Texas. For over 40 years, Uniforms Inc. has been a trusted partner of clients seeking to improve their brand recognition program. Uniforms, Inc. differentiates itself from competitors by providing outstanding service, impeccable quality, and on-time delivery. The award-winning staff dedicates their attention to even the smallest details, ensuring an easy and smooth ordering process, coupled with quality embellishments you’ll be proud to wear. Uniforms, Inc. Website

 

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information about the ISCPO, email: info@iscpo.org

House bill aims to upgrade CTPAT

https://www.americanshipper.com/news/house-bill-aims-to-upgrade-ctpat?autonumber=849160

American Shipper

By Chris Gillis | Jul 15, 2019

Louisiana Rep. Clay Higgins introduced legislation to reauthorize and enhance the functionality of the CBP’s Customs Trade Partnership Against Terrorism Program.

Rep. Clay Higgins, R-La., who serves as the ranking member of the House Border Security, Facilitation and Operations Subcommittee, has introduced legislation to reauthorize and upgrade Customs and Border Protection’s Customs Trade Partnership Against Terrorism Program (CTPAT).

Higgins said his CTPAT reauthorization bill (H.R. 3719) would reauthorize the CBP program for the first time in 13 years, increase information sharing and collaboration with the industry and improve program management. “The reforms in our legislation ensure efficient trade and provide CBP with greater authority to enforce the program’s security criteria,” Higgins said in a statement. CBP created CTPAT shortly after the Sept. 11, 2001, terrorist attacks on the United States as part of a layered approach to international supply chain security. The voluntary program was further established as statute in the 2006 Security and Accountability for Every (SAFE) Port Act.

To participate in C-TPAT, companies complete a comprehensive security questionnaire for CBP and agree to develop programs to enhance security throughout their supply chains. CBP agrees to provide CTPAT participants with faster cargo clearances and fewer exams. More than 11,400 importers, customs brokers and freight forwarders, and carriers are currently enrolled in the program.

However, many CTPAT participants complain they have not realized notable increases in the speed of their cargo clearances or decreases in detentions. In recent years, CBP has proposed changes to CTPAT’s minimum security criteria to improve the efficiency of the program and increase participation. Higgins said his CTPAT reauthorization bill has bipartisan support in the House Security Committee, including from ranking committee member Mike Rogers, R-Ala.; former committee Chairman Michael McCaul, R-Texas; House Appropriations Subcommittee on Homeland Security Vice Chairman Henry Cuellar, D-Texas; and House Ways and Means Trade Subcommittee Ranking Member Vern Buchanan, R-Fla.

“Pre-vetting companies will ensure that our ports of entry can continue processing cargo through our borders efficiently and securely,” Cuellar said in a statement. “I am proud to co-sponsor this bipartisan piece of legislation that will increase security at our southern border while reducing wait times at our ports of entry.”

Specifically, Higgins’ 2019 CTPAT Reauthorization Act bill would:

  • Reauthorize the CTPAT program to “reflect current industry practices and threats to the international supply chain;”
  • Expand CTPAT eligibility to importers, exporters, customs brokers, forwarders and carrier and offer the agency the “flexibility” to add other international supply chain participants;
  • Require CBP to consult with industry when implementing new or updated security criteria;
  • Ensure CTPAT participants receive “quantifiable benefits,” including shorter wait times and fewer inspections at ports of entry for their participation;
  • Expand “tangible and specific benefits” to all participants during CBP’s CTPAT vetting and site visit validation process;
  • Permit CBP to suspend or remove participants from CTPAT for failing to meet minimum security criteria, providing false or misleading information, breaking the law or posing a threat to national security;
  • Offer protections to industry when appealing a suspension or removal from the program;
  • Formalize a process for recurring recertification and revalidation of security practices by CBP;
  • And allow CBP to accept a site visit conducted by a cleared foreign government under a mutual recognition agreement for continued participation in CTPAT.

Industry groups, such as the Border Trade Alliance (BTA) and Express Association of America (EAA), have offered their endorsements of Higgins’ CTPAT Reauthorization Act bill.  “This legislation makes important updates to the program to make it reflective of today’s trade environment while ensuring that tangible benefits to participants are not diminished,” wrote BTA President Britton Clarke and Chair Paola Avila in a letter to Homeland Security Committee Chairman Bennie Thompson.

Clarke and Avila said the bill’s proposed enhancements to CTPAT will “ensure that the program continues to attract new partners and retains existing ones. If the program benefits begin to wane, then the effectiveness of CTPAT will as well.” EAA, which represents the three largest express delivery companies in the world — DHL, FedEx and UPS — supports the legislation and called for its “rapid passage” by Congress. The association especially endorses the CTPAT reauthorization bill’s measure to extend Tier 3 CTPAT membership to entities other than just importers.

“EAA members are among the most secure and compliant companies in the world and have been strong supporters of CBP measures to improve supply chain security and interdict threats to aviation,” wrote EAA Executive Director Michael Mullen in a letter to the House Homeland Security Committee leadership. “The three EAA members were the original ‘co-creators’ of the Air Cargo Advance Screening (ACAS) program, one of the most effective public-private sector partnerships ever formed,” he said. “This is just one example of how these companies exceed the standards of Tier 2 CTPAT membership and employ best practices to ensure highly secure operations and therefore merit Tier 3 membership.”

Mullen said EAA also supports the CTPAT reauthorization bill’s provision requiring a cost/benefit analysis before adding minimum security provisions to the program and providing an opportunity for stakeholders to comment.   “Modifying CTPAT requirements can involve extensive costs for industry, and government should ensure these costs will be balanced with appropriate benefits in terms of genuinely increased security,” he said. In addition, EAA supports the CTPAT reauthorization bill’s continuation of the CTPAT recertification to every four years. “The costs of a CTPAT recertification can easily run into seven figures, and for highly secure companies like the EAA members, this process is not necessary more than every four years,” Mullen said.

Supply Chain Continues to Change

Courtesy of LPM Loss Prevention Magazine by Rod Fulenwider

Much more attention is now being paid to supply chain than ever before. That is evidenced in the pages of this magazine where the editors are focusing more and more articles related to supply chain security and on-shelf availability. Today, supply chain is a different animal than it was just a few years ago. Below are my observations on how supply chain continues to evolve in our industry.

Analytics

A number of us have been using analytics in the supply chain for many years. Here’s the difference: on the standard retail model (store side), vendors have produced software packages for years. Those packages were developed strictly for store-side use, and they have done a good job with the product mix over the years. Having said that, those same software producers have not produced workable products for the supply chain, which has forced those of us on the supply chain side to get creative.

Many of us have worked with our individual IT and operations departments to create our own in-house analytical platforms. For instance, when I was at Blockbuster (as it was growing and at its peak), we created our several very specific data drives to earmark potential issues. We knew that internally the highest likelihood of internal losses occurred in the consolidation area of our distribution center (DC) in McKinney, Texas. This area of the DC consisted of fifty-two aisles where employees consolidated product (such as videos, DVDs, games, and so forth) that would be shipped to 4,800 US-based stores as well as some stores in Mexico and Canada.

We created our own exception reports that pinpointed loss ratios and the highest days of the week for losses. We worked with Sensormatic and installed the first wireless track camera system in the US. Between the exception reports and the use of the new camera technology, we were able to eliminate the loss in consolidation by 82 percent. While our exception system was good, it was by no means great.

I have known Glenn Master for over twenty-five years and can say firsthand that he has continually created analytical systems at various companies. I would say that he is one of the best if not the best in implementing these systems within the supply chain.

When we discuss supply chain, we are most certainly looking at an enormous animal with not only lots of moving parts but also a significant number of companies/vendors in a given system. Using Blockbuster as an example, we found that from the time a product was shipped to us (for example, a specific movie title, say Batman) for distribution, it would be touched by multiple companies just getting to us. Then we would have to handle and prepare the product for delivery to thousands of stores, which meant the product had to be touched by multiple delivery companies.

“We recently finished a case at a DC where the company had a system in place. The system showed losses totaling just over $200,000. Our investigation revealed losses in excess of $2,000,000 and resulted in the arrests of nineteen employees”.

We cannot forget that all of the companies involved either did not utilize scanning equipment or the equipment involved was from various platforms. In the end we created a multiuse scan tag that was equipped on the doorframe of every US store in the system so that we could verify all packages were scanned for receipt at store level. The technology was important, but the ongoing relationship and teamwork with operations and IT was critical.

Language and System

Today the supply chain faces issues that many people just do not understand or cannot keep track of. Recently I was performing a security vulnerability assessment at a distribution center. The DC had experienced a series of significant losses, and they had not been able to resolve these losses internally. Their biggest problem turned out to be language and attitude. It turns out that their policy (which is like many companies) dictates that once the product is placed on the trailer, then it no longer belongs to the company; the product is now the responsibility of the carrier.

In this case, the carrier would take the product back to their own central DC where they would break the product down for delivery to twenty-five other DCs around the country. They would use multiple carriers to transport the product to these twenty-five DCs, and each DC would break the product down into quantities for delivery to smaller regional DCs to be handled and redistributed to the final-mile carriers, which in this case meant an additional number of people handling the product. By the way, the product was pharmaceutical drugs.

Language-wise the company had serious losses that they needed to explain internally as well as to the Drug Enforcement Administration, yet they had not even attempted to create a system for clear tracking within their own four walls nor a system for tracking once the product hit the first outbound trailer.

When I was at Exel Logistics, we had to create our own system to track goods from cradle to grave. I do not know what that system looks like today, but companies like Exel have been dealing with these issues for years. I know that Pitney Bowes is expanding their system and language around this subject.

The Challenge

Finding a software or hardware company that has the knowledge and depth to create intricate tracking and exception-based reporting systems for the supply chain and to create those systems that can be purchased at a reasonable rate is challenging. There may be systems out there that address the real issues, but I am still seeing systems with lots of holes in them.

We recently finished a case at a DC where the company had a system in place. The system showed losses totaling just over $200,000. Our investigation revealed losses in excess of $2,000,000 and resulted in the arrests of nineteen employees. Additionally, we identified two primary locations where the stolen products were being delivered to, both of which were customers. The exception system failed to flag this as a problem, and employees used the hole to exploit the company.

No system is perfect, and there are good loss prevention and asset protection professionals working aggressively to make the systems better. The LP and AP folks making the biggest improvements are like the system—they must be smart and able to change and respond to new technology immediately.

It is a new day for LP and AP people in supply chain. It is also these very issues that drove us to start the International Supply Chain Protection Organization with a focus on advancing supply chain loss prevention professionals and their teams.

LaserShip, Inc. is the latest to be ISCPO Carrier Certified

–NEWS RELEASE–

 

Regional Transportation Carrier Awarded Ground-Breaking Security Certification

The International Supply Chain Protection Organization (ISCPO) adds LaserShip, Inc. to its roster of certified final-mile carriers.

Dallas, TX (April 15, 2019) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce that LaserShip, Inc. has been officially awarded the ISCPO Carrier Certified designation, as part of the ISCPO’s Carrier Security Audit & Certification program.

Lasership has achieved full compliance with ISCPO Carrier Security Requirements, which includes a comprehensive due diligence process and analysis of various security standards necessary to ensure the integrity of goods flowing through the carriers and their clients’ extended supply chain.

“We will continue to see the demands on eCommerce from both consumers and businesses. There is an inherent increase in complexity and risk within transportation,” says Byron Smith CFI LPC, Chairman of the ISCPO. “The ISCPO Carrier Security Audit & Certification program helps recognizes those that execute above and beyond in universal controls and standards, carrier accountability, and transparency within the marketplace among the growing third-party regional carriers.”

Carriers awarded the ISCPO Carrier Certified designation demonstrate their commitment to maintaining elevated levels of security, both internally and externally with their clients. By adhering to one framework of standards set by the ISCPO, time and resources are saved on all fronts. Clients have peace-of-mind that their goods are secure while in transit. Carriers save time and expense by not having to toggle between different client security programs. And, the end customer gets their package on time.

“It is truly an honor for Lasership to be named as an ISCPO Certified Carrier” says Dave Roberts, Director of Loss Prevention with LaserShip.  “I cannot underestimate the importance and value of such recognition.  Lasership is committed to providing exceptional service to our corporate customers and end users.   We work diligently to ensure that deliveries are well controlled to prevent unnecessary damages or loss.   The relationship between the ISCPO and Lasership will in no doubt continue to pay dividends.”

Wes Bank LPC, ISCPO Vice Chairman adds, “The ISCPO Organization congratulates the LaserShip Team on this achievement.  Their 33 years in the logistics service industry has laid the foundation to support industry best practices necessary to minimize loss incidents and service failures.   Let’s face it, 3PLs are a cost-effective way for businesses to move their goods.   There’s always going to be a fine line between compliance spending and maintaining competitive rates.   Through certification, the ISCPO acknowledges and applauds these efforts to demonstrate competency.”

For more information about the ISCPO Carrier Audit & Certification Program: ISCPO Carrier Security Audit & Certification Program

About LaserShip, Inc:

LaserShip is an e-commerce delivery company providing last-mile solutions through an integrated hub-and-spoke delivery network for e-tailers that desire reduced transit times and increased flexibility within their supply chain. Founded in 1986, LaserShip has evolved into the leading provider of same-day and next-day delivery services in the eastern and Midwest U.S. for some of the largest retailers. For more information about LaserShip, visit https://www.lasership.com

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information, email: info@iscpo.org

The Rise of the End-to-End Logistics Provider

This article was originally published by Loss Prevention Magazine and was written by ISCPO Board Member and past Chairman, Glenn Master.

 

If you’re like me, you’ve probably placed an order online in the last ninety days. Like most online experiences, it was likely seamless. You type a product in the search field, pull up comparable items, make a command decision, and place the order. When the experience concludes, you will have received an email confirmation of the order and the expected delivery date for your parcel. Most consumers who follow this process every day in the world don’t give a thought to what transportation providers will be handling their parcels. This responsibility falls on the retailer, who has been entrusted with the customer’s order. If the parcel shows up at the doorstep on time, life is good for all parties. If it doesn’t show up, life becomes bad, specifically for the retailer.

According to several marketing surveys, by 2021 global e-commerce sales will reach a staggering $4.5 trillion. To put that into perspective, out of the 190 countries ranked by the International Monetary Fund based on their gross domestic product (GDP), this dollar amount would rank number four in GDP between the countries of Japan and Germany.

China is expected to lead this blistering e-commerce pace, becoming the largest market on the planet for consumer goods purchased. As Americans, we are all too familiar with the
term “made in China.” However, as e-commerce continues to accelerate, the new term in the market place is becoming “purchased in China.” In November 2018, Alibaba CEO Daniel Zhang announced that it intends to help global business sell $200 billion in goods to China through e-commerce channels in the next five years. The Chinese government has hosted several logistics summits to try and promote its own internal e-commerce growth for Chinese retailers, who drastically want to sell and ship directly to consumers in the United States. The Chinese believe that consumers having the ability to order and receive products at their homes not only is a convenience but also offers an emotional impact. This makes sense when you consider the emotional lift you sometimes get when arriving home from work and seeing a package at your front door.

Parcels without Borders

LPM- Glenn Master Feb 2019What does this mean for individual merchants and retailers who are now experiencing the ability to sell beyond their borders? First, the experience has to be as seamless as an in-store shopping experience, which can be a daunting task if you are shipping to another country. Second, the package must be delivered quickly, and typically the consumer doesn’t want to pay for shipping. In the same breath, the consumer wants a hassle-free returns policy at no cost to them. This now leaves the retailer searching for options. 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 or individual merchant. 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. The result of this evolution in the supply chain is the development of the end-to-end service provider. These logistics companies support retailers as a hybrid solution, providing services that range from distribution, customs clearance, transportation, and final-mile delivery. It can include a mix of their own proprietary distribution centers and trucks mixed in with a vast network of contracted transportation providers, which can also incorporate national post offices in the final-mile delivery. If this sounds confusing, it’s because it sometimes is. However, if done correctly it is a very sound and cost-effective method for the retailer to ship a customer order to someone who may be located on the other side of the planet.

For example, picture a consumer in Seoul, South Korea, ordering a pair of shoes from a US-based retailer. The order will be picked, packed, and shipped out of the retailer’s distribution center in Atlanta, Georgia; however, the retailer is contracted with an end-to-end logistics provider. The parcel arrives at the provider’s US distribution center, is scanned in, and then placed with other retailers’ packages all destined for Seoul. The end-to-end provider then uses a large network of contracted partners that will handle that parcel as it moves from the US to Korea. The key to this type of solution is volume. The more volume the end-to-end provider can get from the retailer, the lower the cost is to the retailer. Having a Proactive LP Plan Based on this very complex network, one may ask how anything resembling loss prevention can be incorporated into this model. The answer is simple. As I mentioned earlier in this article, the shear growth of e-commerce is creating industries and subindustries that did not exist five years ago. With retailers worldwide continuing to look for cost-effective shipping solutions and customers demanding more flexibility, it was inevitable these type of hybrid solutions would be created. If the retailer has a direct contract with the end-to-end solutions provider, then the loss prevention responsibly will fall on that solution provider. Remember that once the parcel is received, the solution provider essentially owns it. With a high probability and depending on how the contract is worded, responsibilities may include labeling, customs clearance, tracking, security of the parcel, investigation of losses, and claim liability if the package is lost or stolen. Therefore, it is essential that a comprehensive loss prevention program is in place with the end-to-end solutions provider. However, it doesn’t stop there. What about all these contracted companies that are used? Here is where the rubber meets the road and where loss prevention must have a proactive plan in place that consists of the following elements:

■ A comprehensive security protocol that the contracted carriers must adhere to.

■ A robust auditing program that reviews compliance in the areas of security, scanning, and inventory control. As with most auditing, the basis is going to lie with the contractual verbiage that’s in place.

■ Loss analytics that can identify trends by country, company, route, and final mile. The foundation of this reporting is looking for package exceptions where the scanning stops, or what is commonly known as “going dark.” This is very similar to what retail loss prevention uses when running exception reports, except you are looking for trends for all touch points in a global supply chain. Regardless of whether a package circulates the globe and touches five different companies, if a scan is put to the package, and you can review that through reporting, you will see where losses are occurring.

■ Proactive communication 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 to accept help and identify problems before they get out of hand. The one caveat is that unlike dealing with transportation companies in the US, there are specific government laws in each country that may limit the ability to conduct certain audits. This is more directed at specific actions, such as reviewing criminal background checks or drug screenings for employees versus operational processes. However, as a good rule of thumb, you should always check with your legal department and inquire about country-specific laws related to the transportation industry. As e-commerce continues to evolve, so will loss prevention. We have literally entered a new era in how the consumer shops and retailers must continue to figure out ways to ship these orders. What was once a supply chain dominated by a few large, proprietary companies is now expanding into a multifaceted approach that involves a myriad of companies that must all work together to support this growth.

 

 

Glenn Master

Glenn Master

Glenn is the Co-Founder and inaugural Chairman of the ISCPO. He currently is employed with Newgistics as the Sr. Director of Loss Prevention 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 a Bachelor’s in Criminal Justice from the University of Texas-Arlington.

ASSOCIATED COURIERS, INC. is the latest to be ISCPO Carrier Certified

–NEWS RELEASE–

Regional Transportation Carrier Awarded Ground-Breaking Security Certification

The International Supply Chain Protection Organization (ISCPO) adds Associated Couriers, INC. to its roster of certified final-mile carriers.

Dallas, TX (November 19, 2018) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce Associated Couriers, INC. has been officially awarded the ISCPO Carrier Certified designation, as part of the ISCPO’s Carrier Security Audit & Certification program.

Associated Couriers, INC. has achieved full compliance with ISCPO Carrier Security Requirements, which includes a comprehensive due diligence process and analysis of various security standards necessary to ensure the integrity of goods flowing through the carriers and their clients’ extended supply chain.

“We will continue to see the demands on eCommerce from both consumers and businesses. There is an inherent increase in complexity and risk within transportation,” says Byron Smith, Vice Chairman of the ISCPO. “The ISCPO Carrier Security Audit & Certification program helps recognizes those that execute above and beyond in universal controls and standards, carrier accountability, and transparency within the marketplace among the growing third-party regional carriers.”

Carriers awarded the ISCPO Carrier Certified designation demonstrate their commitment to maintaining elevated levels of security, both internally and externally with their clients. By adhering to one framework of standards set by the ISCPO, time and resources are saved on all fronts. Clients have peace-of-mind that their goods are secure while in transit. Carriers save time and expense by not having to toggle between different client security programs. And, the end customer gets their package on time.

“Earning ISCPO certification is a landmark achievement,” says Anthony W. Anderson, CEO of Associated Couriers, Inc. “Ensuring the multiple stages of security necessary is a base-line value for logistics providers, especially final mile and ecommerce partners.  We go above and beyond by using top of the line technology to track each package and monitor each delivery until final delivery.   We provide photo POD and e-signature to our customers to ensure closed-loop tracking and a near 100% on-time performance record.  We take great pride in maintaining an impeccable record of near zero loss, which reflects our strict adherence to security protocols and efficient practices, and continuous investment in loss prevention staff and technology.”

ISCPO Vice Chairman Smith adds, “The ISCPO Team would like to congratulate the Associated Couriers Team on their achievement. Their more than 40 years of logistics experience has formed a solid framework of best practices in internal operating procedures, delivery and return protocols, loss and theft prevention programs along with their dedicated people and facility management. Associated Courier, INC leads the way with high industry standards as a regional carrier.”

Ken Snarzyk, the Safety & Compliance Officer stated he is honored to have earned an ISCPO Certification. “It ensures security for our network through to the final mile and is an excellent addition to our US DOT, TSA and C-TPAT certifications.  We are continuously committed to upholding the highest security and chain of custody standards for all of our clients’ logistics and supply chain needs.”

For more information about the ISCPO Carrier Audit & Certification Program: ISCPO Carrier Security Audit & Certification Program

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information, email:

info@iscpo.org