LP Magazine

JAN-FEB 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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BUMPS IN THE ROAD 41 LP MAGAZINE | JANUARY–FEBRUARY 2019 streams, shipment delivery and retailer reputations become intertwined. The consequence of crime disrupting supply chains isn't only about insurance claims and loss of revenue; it's about brand protection, customer loyalty, and future sales. So it's not only gains in supply chain security that will be tested but also perhaps the value of LP professionals themselves. In the Yard The risk of theft in retailers' distribution centers (DCs) is much as it has always been—and the best strategy to prevent it is too, according to one director of loss prevention. "There is no silver bullet. It's just a matter of having a strong overall security program, where you've got good people, and layer in technology, and work to deter crime with the same approach that you have in stores," he said. Just as stores are more likely to be hit when they are in disorder, distribution centers need to appear "buttoned up" to dissuade crime, he said. That means walking your fences, checking your lighting, implementing robust video surveillance, instituting tracking systems for both trucks and product, and having well-defined access-control programs. As a blueprint, some LP leaders noted that it helps to follow the physical security attributes identified by the Customs-Trade Partnership Against Terrorism (C-TPAT), the voluntary supply chain security program led by US Customs and Border Protection, which was created to improve the security of private companies' supply chains with respect to terrorism. Still, it's not enough to have the right tools and protocols in place. It takes ongoing investigation, assessments, and audits to ensure vigilance against ever-present adversaries. For example, access-control systems generate a wealth of data, but it can only point to a driver's suspicious after-hour visits to a distribution facility if it's scrutinized. "If you're not looking at what your tools are telling you," an LP director warned, "then they're not doing you any good." Overall, retail LP teams do a good job of preventing theft at distribution facilities from causing material harm to their businesses, according to security consultants and supply chain LP professionals we interviewed. "We all have our cases now and then—people will go into cartons and take onesies and twosies—but it's not enough to really move the shrink needle for a company," said one. "If your DCs are secure, and your yards are secure, then the opportunity for theft to cause significant damage is pretty minimal." The bigger risk for theft today comes as a package leaves the control of a retailer and is placed in the hands of third-party logistics providers (3PLs), say experts. While subcontractors and small carriers may pose more risk, experts say that even the big carriers like UPS and FedEx have issues inside their buildings and operations that result in loss. Problems are likely to worsen under today's labor shortage, particularly the acute issue of too few drivers for too many packages. "I think the 3PLs are suffering like everyone else under the labor shortage," said one LP supply chain professional. "They're having to take what they can get to move boxes." America is short about 50,000 truck drivers, according to the American Trucking Association. If the current trajectory continues, that number could exceed 174,000 by 2026, says the group. Fewer drivers can cause trailers to be staged loaded for long periods of time, putting shipments at added risk. It also puts shipments in the hands of drivers that may not have passed a rigorous background screening a few years ago. Realistically, retailers will likely have to come to terms with paying more to transport shipments and that drivers they probably wouldn't want will be in control of their packages, experts believe. On the Road Data on cargo theft is, generally, trending positive. Both CargoNet and SensiGuard's Supply Chain Intelligence Center have tracked year-over-year declines in the number of cargo thefts for the three years leading into 2018. The FBI reported an increase in the number of thefts in 2017, but that likely reflects an increase in the number of law enforcement agencies reporting cargo theft data. (In 2017, a total of thirty-three states and the Bureau of Indian Affairs participated in the submission of cargo-theft data.) A new study by the National Retail Federation (NRF) reports a major drop in the percentage of retailers that say they were victims of cargo theft in 2018. And everyone's data seems to point to a conclusion that the total value of It's not enough to have the right tools and protocols in place. It takes ongoing investigation, assessments, and audits to ensure vigilance against ever-present adversaries. For example, access-control systems generate a wealth of data, but it can only point to a driver's suspicious after-hour visits to a distribution facility if it's scrutinized.

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