Liz Parks September 14, 2016
Those in charge of security for cargo belonging to retailers are up against some of the wiliest and most sophisticated criminals in the country. And the situation is getting worse, according to Anthony DiPasquale, senior vice president and U.S. marine cargo product leader for Aon Risk Services. This is particularly true during holidays, when retail cargo thefts have increased by as much as 40 percent versus non-holiday weekends. DiPasquale’s responsibilities range from covering the cargo as it moves from overseas to distribution centers to retail stores, but also includes goods stored in distribution centers and on store shelves. “We refer to it as cradle-to-grave coverage,” he says.
The products he insures are owned by high-end retailers, department stores, jewelry, apparel, cosmetic, appliance, electronics and furniture stores, as well as mass market stores that carry a wide variety of high-value products like pharmaceuticals.
One thing that almost all of Aon’s clients have in common, he notes, is that they often have limited financial resources for cargo loss control. The choices they make about how to best provide cargo security must be very strategic and backed, whenever possible, by research and data that helps them react as proactively as possible to what cargo thieves are planning. However, not all retailers are prepared to plan strategically, and some are not operationally adept at ensuring that security policies are well-known and well-executed throughout the organization.
Watching and waiting
Retailers with high-recognition brand names are “key targets for thieves,” DiPasquale says. “There is a lot of work that goes into protecting and developing a formal security plan.”
Although it can seem to some that cargo theft is random and opportunistic, the opposite is the case. “Cargo thieves are actually very sophisticated criminals and they tend to run in gangs. They are very organized, very specialized groups that go after cargo theft.” In the United States, cargo theft is estimated to be between $12 billion and $15 billion a year, DiPasquale says. One of the attractions for thieves is that products stolen from retailers are easily moved on the black market.
Retailers, especially those who haven’t given a high priority to cargo theft, perhaps because they have not been hit that hard yet, need to understand that “these very sophisticated criminals are watching the trailers while they’re on the move,” he says.
“They are watching specific facilities where they know there is desirable cargo. They are watching, and they are often a step ahead of the security people assigned to protect the cargo. They are planning and waiting for the optimal opportunity to get the goods.”
Holiday weekends are “obviously more vulnerable,” he says. “There are less people around and the thieves are ready for any opening.”
Based on their surveillance, the thieves know when guards are around; they know who comes in and out of the facilities and when the guards make their rounds — when the lights go on at night and off in the morning. “They watch all these things and they develop patterns, and from that, they determine the best time to strike.”
But if a retailer has invested in a good security team, he says, “they know what’s going on around their facilities so surveillance maneuvers can be compensated for.”
Problems arise because retailers don’t always have good security, DiPasquale says. “A lot of retail companies are dealing with limited budgets so they do the best they can with the tools they have. It becomes a cost factor for what they can actually do.”
And retailers are vulnerable whether they manage their own transit or use third parties. DiPasquale describes one case where thieves tripped a security alarm “on purpose, just to see what the response would be,” he says.
“If the response is slow, they might hit next time. Sometimes, though, they will trip an alarm two, three or more times, just to make the guards think the alarms are false. Then when no one responds the third or fourth time, they hit.”
Between 70 and 75 percent of the time, DiPasquale says, “the theft is based on the help of an insider, some inside information that the criminals get. They may have learned where a particular load is going to be, or where the designated rest stops will be. Then they’ll be ready to hit those particular cargos.”
Retailers need to be scrupulous in protecting documentation. “Only the people who need to know should have documentation information,” he says. “Retailers don’t want the documentation touched by many people. Only on a need-to-know limited basis should people have that information.”
A good practice, he says, is to give drivers “just the information to get to their destination following a specific route and to let them carry further information within a sealed security envelope that can only be opened when they reach their destination. This way the drivers don’t know the specific contents in their trailers. They have only the information they need.”
This is especially important, he says, for cargo being transported across high-crime areas like California, Florida, Texas, New York, New Jersey and even parts of Tennessee and Kentucky, “any place where criminals know the goods are.”
NEW YORK, NY–(Marketwired – Jul 12, 2016) – USPack Logistics (www.gouspack.com), a leading same-day transportation company, today announced that the International Supply Chain Protection Organization (ISCPO) has granted it Security Certification. The ISCPO Carrier Security Audit is a framework for collaboration between customer and service provider, to mitigate risk and provide universal controls when using regional third-party logistics carriers.
USPack provides transportation services to ecommerce companies and healthcare organizations whose success depends on special handling and high levels of security. Following a thorough examination of operating procedures, systems and access control, security of deliverables and returns, loss and theft prevention, hiring, workforce training and facility management, USPack has earned the distinction of being the first transportation company to achieve full compliance with the ISCPO standards.
“USPack has demonstrated an unparalleled commitment to loss prevention, and we are pleased to bestow this well-deserved honor,” said ISCPO Chairman, Glenn Master.
Organizations that depend on last-mile carriers and delivery services demand assurances that each hub of the supply chain is thoroughly and routinely assessed. By embracing these standards, carriers acknowledge the need to comply with collection of best loss prevention and theft detection practices within the Security/Loss Prevention industry.
“Earning ISCPO certification is a tremendous achievement,” said Mark Glazman, EVP of USPack Logistics. “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.”
USPack, founded in 1986, is based in New York, New York and provides custom transportation solutions for ecommerce and healthcare companies nationwide. Recognized as an innovator and service leader in the same-day transportation industry, US Pack operates in 21 states along the Eastern Seaboard, the Mid-West and the Pacific Northwest regions of the US.
In-Transit Cargo Theft: Impacting the Retail Supply Chain
Cargo Crimes, Supply Chain Disruption Increasing at an Alarming Rate
John Tabor • December 11, 2015
A recent survey of retail security directors showed that almost half of those polled had been the victims of a supply-chain disruption directly related to cargo theft in the past year. This is a significant increase from just five years ago.
Envision the following scenario. You are at home around 8:15 at night watching television with your wife or kids when the phone rings. The caller is one of your regional LP managers in the Southeast. He tells you that you just had a tractor load of high-end apparel worth $2,000,000 stolen in Florida while parked at a truck stop. The driver had gone in to use the facilities, and when he came out ten minutes later his tractor and trailer were gone. While no one ever wants to receive a call like this, you can be prepared for it.
In order to fully understand the issue of cargo theft, you need to know why it exists, who is perpetrating it, how you can reduce your risk, and ultimately how to react to a cargo theft loss.
Most of those reading this have had some level of store- or logistics-security exposure. Good loss prevention programs involve some form of a “layered” approach. Based on the exposure, some, if not all, of the following countermeasures may be employed—surveillance cameras, alarms, locks, lighting, EAS, safes, employee awareness training, and others. Loss prevention professionals would be remiss in their duties if they did not explore all of these attributes to secure their stores.
That said, remember that virtually 100 percent of the merchandise in retail stores is delivered by truck. In many cases the only two preventative measures put in place to secure that same merchandise and deter cargo theft in transit is a key to the tractor and a seal on the rear doors.
By Keith Goble, Land Line State Legislative Editor
Stiffer punishment for truck, rail or container cargo thieves in Texas took another step this week toward becoming reality.
The Senate voted 30-1 on Wednesday, April 29, to advance a bill that would establish cargo theft as a specific offense and impose escalating fines and punishment based on the value of goods. The bill awaits further consideration in the House.
Texas Sen. Judith Zaffirini, D-Laredo, said that cargo theft by organized crime rings has become a serious problem in the state, as well as nationwide. She put the losses to the state at $23 million between 2012 and 2014.
“Cargo theft is a growing problem nationwide accounting for an estimated loss of $10 billion to $25 billion per year nationwide,” Zaffirini said speaking on the Senate floor. “Because we have one of the busiest ports of entry in the country, Texas is especially vulnerable to this growing problem.”
According to FreightWatch International, in 2013 Texas ranked behind only California in the number of cargo thefts. Florida, Georgia and Illinois rounded out the top five.
Lt. Gov. Dan Patrick has said that two of his biggest priorities are keeping people safe and fostering economic conditions. He said that cargo theft puts both at risk.
See the attached proposed Texas Cargo Theft Statute
An Interview with a Loss Prevention Expert
Byron Smith – Thursday, May 28, 2013
Newgistics’ Director of Loss Prevention, Glenn Master, recently spoke on how to address shrink challenges across the supply chain head-on at the RILA conference in Orlando along with David Sacramone, Regional Loss Prevention and Safety Manager with Office Depot.
On any given day, millions of boxes are transported through the global supply chain to consumers. Having to rely on contracted transportation entities, which are outside of their span of control, creates numerous shrink challenges for retailers.
The Gist caught up with Glenn to learn more about his session at RILA and how Newgistics’ fulfillment and returns and delivery solutions address loss prevention.
The Gist: Glenn, thanks for your time. What type of audience did you speak to at RILA? What do you think the biggest problem your audience faces when it comes to loss prevention?