Today, transportation and logistics companies are prone to a variety of security risks and challenges as they work to make business operations streamlined and integrated in this increasingly connected world. These challenges can range from managing fuel costs and their drivers – including the speed at which these drivers travel – to complying with regulatory standards. However, one of the greatest challenges in the field that companies face is combating cargo theft. Unfortunately, it’s also one of the costliest.
Nationwide, two million tractor trailers traverse the roadways annually. Sixty-seven percent of all freight travels on trucks and 90 percent of cargo theft occurs during transit. In the United States alone, cargo theft produces an annual loss of $35 billion and worldwide, the total annual loss is estimated to be as high as $60 billion. While cargo thieves typically target specific loads, the list of frequently stolen goods varies, including apparel, smart phones, watches, jewelry, gaming consoles, pharmaceuticals and even food. Goods are at risk at every point along the supply chain: in storage, during transfer and during transit. As the volume of world trade increases and thieves become increasingly sophisticated, the risk for cargo theft continues to grow.
So what does the theft of a load mean for a transportation and logistics company today? Of course there’s the cost of the lost load and effort of recovery, but the company may also face increased insurance premiums and deductibles. For highly sensitive products like pharmaceuticals and food, significant recall costs may be incurred. Such recalls often result in damaged brand reputation among both partners and customers. Re-building trust takes time and in some cases mending these relationships may not always be a possibility.
With the increasing frequency and sophistication of cargo thefts, it’s vitally important for transportation and logistics companies to protect their people, operations and assets. Many fleets today still depend solely on their drivers for safety and compliance, allowing room for human error. Instead, security measures must parallel the sophistication of thieves to be successful.
The most effective fleet management security comes from proactively controlling the fleet remotely. An advanced fleet security and control solution can not only provide real-time reporting when a shipment goes off-course, but can also enforce driver compliance. When the system detects that a truck has gone off its geo-route, the most advanced solutions incorporate an acceleration control system that can remotely and safely reduce the truck’s speed down to a complete stop, making it impossible for thieves to divert a shipment from its pre-defined route. Driver safety is also enhanced with a panic alert device that allows them to send an alert to dispatch to shut the truck down from up to a mile away. By moving from a reactive stance and leveraging the latest fleet management security and control solutions, a transportation and logistics company can virtually eliminate cargo theft among its fleet.
Ultimately, the benefits of employing advanced fleet security technology goes beyond security. For the shipper of ingested products such as pharmaceuticals, infant formula or food, it provides brand protection from product adulteration and the potential public health consequences. For the fleet operator, it can provide the additional protection necessary to carry high-value loads and an unprecedented level of control over fleet fuel consumption and driver behavior. That translates to sound business.
Don Hsieh is director of commercial and industrial marketing for Tyco Integrated Security.