LP Magazine

MAR-APR 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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52 MARCH–APRIL 2019 | LOSSPREVENTIONMEDIA.COM Modern-Day Pirates Pillage Different Seas The Closer You Look at Cargo Crime, the More Complicated the Problem Becomes A single fragment of cargo crime reflects just how big supply chain issues are becoming for retailers. The battle with cargo thieves is as long as human history. The theft of yesteryear involved pirates attacking merchant routes, and it's no different now. Trucks have simply replaced wooden ships and horse-drawn stagecoaches. International crime syndicates are today's marauders. Indeed, if you contemplate everything that shipments of retail goods go through—the threats they must avoid, the obstacles to overcome, the roadblocks to navigate—it can seem downright miraculous that packages ever get to where they're supposed to. Risk is a cargo shipment's constant companion, whether it's sailing on seas, flying in the sky, or traversing the roads and rails. Previously, we peeked behind the curtain of supply chain risk management, taking an overview of the myriad activities related to sourcing, procurement, conversion, and logistics—and the risks inherent in all of them. Here, we undertake a similar look-see into one extremely small segment of supply chain risk: cargo crimes against domestic ground shipments while in transit. Cargo relates to shipments via rail cars, planes, or trucks from the point of origin to final destination. If any merchandise is stolen in between—at a storage facility, terminal, warehouse, wharf, truck stop, or highway—then it is called cargo theft. Theft related to cargo during ground transport is perhaps the risk we're all most familiar with, and yet—as with the supply chain more broadly—the closer you look at the risks, the more complicated security seems to be. Data provides useful intelligence, certainly, for example by demonstrating that most cargo theft occurs on weekends. But the risk picture is also a little murky. A complete and accurate understanding of cargo crime is hamstrung by limited reporting by the transport industry, fuzziness over exactly who is the "victim" when shipments are stolen, and by the absence of law enforcement systems to ensure consistency in reporting and tracking. While we know a lot about cargo crime—the when, where, and how—there is much we don't know, especially exactly how often it occurs and how much value is lost because of it. Cargo crime mirrors the broader supply chain network in another way. Just as the supply chain is growing ever more intricate and fragmented, the tentacles of cargo crime continue to spread. A retailer's risk today, for example, more frequently extends beyond the fifty-three-foot trailer and is now reaching all the way to the doorsteps of customers. An Evolving Problem The danger starts as soon as a load of cargo is loaded on a truck. It's at risk from curtain slashing, pilferage, hijacking, vehicle theft, theft of full or partial truckloads, and last-mile courier problems. It's even at risk during loading in the guise of deceptive pick-up. Cargo endures additional risk because carriers often subcontract with multiple other transportation providers, and it's multiplied because shipments aren't typically able to be received 24/7. Economic losses include those related to insurance, reorder costs, administrative costs, claims, and most noticeably, top-line sales. While the universe of risk to ground cargo is expansive, the locations of crimes are rather narrow. The bulk occurs within relatively few geographic areas, typically near big ports and in states that are logistic hubs. Data shows a vast majority of cargo thefts occur in a handful of states: By Maurizio P. Scrofani, CCSP, LPC Scrofani is an LPM contributing writer and well-known supply chain asset protection professional with over twenty-five years of experience in retail and manufacturing, including leadership roles with Macy's, Bloomingdale's, Delonghi, and Toys"R"Us. He was cofounder and president of CargoNet, a supply chain theft prevention and recovery network solution of Verisk Analytics. Currently, Scrofani is a consultant to retail, transportation, and manufacturing companies. He can be reached at maurizio@mpsconsultants.com.. SUPPLY CHAIN continued on page 54 Just as the supply chain is growing ever more intricate and fragmented, the tentacles of cargo crime continue to spread. A retailer's risk today, for example, more frequently extends beyond the fifty-three-foot trailer and is now reaching all the way to the doorsteps of customers.

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