How cargo theft creates problems for global supply chains:

Theft has always been a hindrance to the supply chain. Despite the security measures put in place to stop theft, cargo theft is still rampant today. Some of the consequences include damaged reputation, financial losses, insufficient inventory and production, and increased planning and resources.

See also: Maintaining Supply Chain Security: Responding to a Surge in Fraud and Cargo Theft

Logistics professionals must fully understand how fleets are attacked and how to prevent theft. Here are some important things they should consider.

Reputation issues

Reputation is always a top concern for businesses. Cargo theft may initially seem unrelated to a company’s image, but it is. When an outsider steals a consumer’s package while in transit, they don’t blame the thief. People assume that the fault lies with the company for failing to secure the package before it reaches its destination.

Most customers may not be aware of this breach, which could lead them to assume the shipping company is responsible for the theft. People may also be concerned about personal information being exposed, as most packages display this information so they can be delivered to the correct destination. Data privacy needs more recognition.

Global supply chain managers may be ignoring this information, but they should be aware of these blind spots. A Deloitte survey found that global executives overestimate the trust that customers have in their supply chains. For example, executives Average score 80 Reliability, but their customer base only gave it a score of 65. Competence was another dimension where they were lacking, with professionals giving it a score of 84, while consumers gave it a score of 75.

Cargo theft can exacerbate reputational disparities. Once a company has a bad reputation, it can say goodbye to customers. Many people may avoid problematic delivery services. People may come back, but may seek out more trustworthy brands with better security.

A negative reputation can also trigger distrust among partners. Global supply chains are interdependent. However, falling consumer confidence can reduce incentives to collaborate. They may also worry about tarnishing their reputation in the process.

Financial impact

Cargo theft can also cause financial problems. A bad reputation can lead to reduced sales and deliveries, while slowing demand can cause problems in global supply chains. Some companies may not survive, leading to company closures and supply chain imbalances.

Stolen products also caused direct losses. According to reports, 925 incidents of cargo theft In the first quarter of 2024 alone, there were 30 robberies, with an average loss of $281,757 per robberyIn total, $76 million was lost. As operations become more planned and complex, each incident can have a greater financial impact than the previous one.

Expenses can also be wasted. Operating a fleet of vehicles is expensive, but delivering and transporting freight can bring in profits to offset those costs. Freight theft can wipe out the surplus and put a company into the red.

Cargo theft can result in loss of operating profit for that particular flight. Multiple such incidents within the same quarter for the same company can lead to bankruptcy.

Many people are employed in the shipping industry. It is estimated that 105,220 agents working Freight transportation. They are responsible for inventory management, route movement, packaging, driving, etc. The company must pay these employees an hourly wage.

Some companies refuse to pay the carrier when cargo is stolen. Others may seek compensation or close the case on the grounds of negligence. Because cargo theft remains a threat, insurance is expensive.

Supply reduction

Global supply chains deliver a vast array of goods. However, the looting could raise concerns about whether those products can last. Meeting demand has been a recurring problem for executives.

For example, it takes time to grow, manufacture, and package food and beverages. Unfortunately, they Is the primary goal Criminal activity driven by economic expansion and desperate consumer demand.

Cargo theft is not the only cause of delays in global supply chains. For example, the automotive industry faces shortages of raw materials. The deficit will continue until 2025 Overseas conflicts such as trade wars and invasions have also brought production to a standstill in car-producing countries.

The added stress of lost product is too much for producers to bear. The blame lies with fleet managers who fail to protect high-value shipments before they reach their destination.

Unsafe routes

Determining the best shipping routes is a major consideration in preventing cargo theft. Speed ​​and efficiency are top of mind for most supply chain professionals when planning how to move cargo. However, package security and driver safety are also priorities.

For example, some South Freeway intersections in Dallas-Fort Worth It is a common area for cargo theft 2023. Executives can either risk passing through the aisle to speed up delivery or plan longer routes to avoid it. The latter requires additional resources.

Unsafe shipping routes are a problem worldwide. Let’s say there are rumors that robberies are common in a certain sea lane. Companies must decide whether to risk letting a cargo ship pass or choose a longer route.

Risk Analysis

Every professional should be alert to cargo transportation irregularities. Risk analysis can help narrow down the likelihood of cargo theft. For example, a probability study found that most past incidents involved vehicle thefts. 64.2% ACCIDENT.

The study also found that truck thefts accounted for 20.3%, while vehicle thefts accounted for 6.26%. Other incidents included facility, trailer and container thefts. Implement the strictest security measures in areas with the highest likelihood.

Advanced anti-theft measures

Cargo theft doesn’t just target drivers. Some criminals launch cyberattacks to bypass authentication processes and steal valuable cargo. They may also use data to impersonate reliable carriers, which can increase distrust among key players in the supply chain.

Some are working to address these issues. For example, one company offers visualization software that uses artificial intelligence to pinpoint and mitigate freight delays. Alerts and other organizational tools can minimize the room for error in security systems. Received $73 million in financing For research and development and customer acquisition.

Protecting the supply chain bottom line

Cargo theft is prevalent in the current climate. Many global supply chains have continued to remain strong despite past thefts, whether successful or not. Logistics professionals should persist in combating such crimes and focus on providing top-notch service to consumers to enhance their reputation and prevent losses.