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Awareness of Seasonal Risk in the Supply Chain*
The growing logistics demon – colloquially known as cargo theft – is about to enter its busiest season. In 2013, theft activity concentrated in the fourth quarter with a cumulative 242 incidents; the greatest number of incidents reported in late September, just before the beginning of the holiday shipping season. Additionally, the United States has seen a significant rise in driver theft incidents, which involve either direct theft by the driver, the driver’s voluntary collusion or complicity in the crime, or a deceptive criminal posing as a legitimate carrier resource. Typically a crime of opportunity, thefts by drivers fluctuate in volume year-to-year. However, this method reached an all-time high in 2013, with a 76% increase over 2012 and a 389% increase over 2011. This growing trend – surreptitious driver – warrants acute awareness as the shipping industry enters its peak season.
According to the July 14, 2014, article by Michael G. Malloy, “Driver Turnover Stays Above 90% in 1Q at Large Truckload Carriers,” in Transport Topics, there is currently a 90% turnover rate of full-truckload (FTL) drivers in the United States – a huge disadvantage and security risk to an organization’s supply chain.
Moreover, fictitious pick-ups continue to be a growing threat in our industry. The frequency of fictitious pick-ups increased sharply from 2011 to 2012, remained relatively constant in 2013, and have resumed a steep upward path during the first two quarters of 2014: 26 fictitious pick-ups have already been reported this year, totaling over $3.5M in lost cargo. Forty percent (40%) of these incidents targeted electronics and apparel. These low-risk, high-reward incidents continue to be relatively easy (for the criminal) to organize, while becoming increasingly painful for enterprises to endure.
The peak season of July to September frequently infuses risk, chiefly brought about by the supply and demand imparted on transportation operations. Limitations on available carriers often necessitate brokering (as well as re-brokering to the second, third, and sometimes fourth order). Logisticians, Transporters, and Security Professionals can combat this threat by taking a proactive approach to cargo security. Awareness of the threat is integral. Exercising proper due diligence when sourcing carriers is essential. In addition, ensuring that all participants in the supply chain comply with industry best practices is paramount. The organized criminal dedicates an inordinate amount of time to surveillance, preparation, and rehearsals; we must dedicate ample resources to proactively combat this growing threat.
*Unless otherwise noted, all information has been sourced through the FreightWatch International Supply Chain Intelligence Center.
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