As the nation struggles to ensure critical healthcare supplies and essential goods like food and household items make it to market in the wake of the COVID-19 outbreak, supply chain security has never been more important. A recent study looking at 2019 supply chain security issues found that cargo theft was already on the rise in the U.S. last year, long before the current outbreak put more pressure on supply chain security.
The report, from Supply Chain Quarterly, shows that in the third quarter of 2019, cargo theft rose by 13% in volume and 31% in value compared to the second quarter of last year. This highlights a problem that's been around for as long as freight has been hauled onto vehicles: when there's a valuable load of anything, there's always someone looking to illegally relieve the rightful owners of that cargo, whether in transit or storage. According to the FBI, cargo theft added up to some $33 million in stolen goods in 2018, more than 77% of which were never recovered.
The difference between cargo theft today and just ten years ago is that as logistics technology gets better, criminals become more sophisticated, and the modularity of containerized shipping makes it all that much easier for someone to hook their own truck to an unsecured trailer and simply make off with its load.
Increasingly digitized supply chains with improved analytics and IoT tracking devices that help supply chain experts more efficiently manage freight and fleets also hold a double-edged sword: there is a risk that these technologies can also be compromised when they're not protected with the right cybersecurity measures and leveraged by criminal networks to locate their targets.
Technically savvy thieves can use this kind of rich data to carry out strategic cargo theft operations that are far more damaging than simply driving off the warehouse lot with a random, unsecured container. According to one expert with Traveler's Insurance, they've seen a marked increase in technology like IoT sniffers and jammers by cargo thieves since 2014. With the dramatic increase in the value of some goods like healthcare-related PPE and testing supplies needed to address the COVID-19 crisis, targeted cargo theft of these items represents a significant threat to an already overwhelmed system.
As cargo theft grows more targeted, logistics experts must keep in mind that initiatives like digital transformation of the supply chain are not just an efficiency play, they are essential to our national security. Organizations that leverage the right combination of digital capabilities and cybersecurity protection will be able to reap bottom line benefits from improved asset utilization while also assuring the security of the supply chain for the most essential goods.
Logistics Security Logic
Some strategies and technologies that organizations should keep in mind to secure the digitalization of the supply chain include:
Geofencing Cargo for Security: Tying asset tracking technology at the chassis, trailer, and container level to GPS-enabled geofencing technology can make it possible to trip alarms, control chain of custody, and secure loads more meticulously.
Hardening Digital Supply Chain Devices and Data: Asset tracking technology is hardly a new field for fleet management; however, the hardening of these devices is not always top-of-mind for most organizations. But with strategic cargo theft on the rise, organizations need to think about how tracking devices are protected to keep the bad guys from not only turning off tracking in the commission of a crime, but also using the information these devices emit for illicit tracking of cargo in the set-up of an eventual heist.
Additionally, the backend infrastructure that holds the data from these devices needs to be considered as well. Organizations should be following the rule of least privilege, making sure that employees and partners can only access the logistics information they need to carry out their job rather than being able to download every piece of supply chain intelligence a database contains.
Defenses to Counter Insider Theft: The most recent BSI & TT Club Cargo Theft Annual Report shows that insider threats account for the majority of cargo theft today. Whether it is drivers who have gone rogue or employees who have been recruited to provide thieves with information or equipment access, the potential for insider malfeasance abounds when protections are not in place.
Examples of protection can include things like anti-tampering technology that triggers tamper alerts for cargo and creative employment of geofencing. For example, one BlackBerry customer created a geofence along their entire shipping route to ensure that drivers were not making unauthorized runs outside of their normal routes.
Ensuring Supply Chain Security
Unfortunately, many organizations have yet to take the necessary steps like these to secure their cargo end-to-end. As one insurance expert, Michael Nischan from EPIC Insurance Brokers and Consultants, told Commercial Carrier Journal:
“The biggest problem I see with the cargo and equipment theft problem is sort of like personal health. It’s that companies don’t want to deal with it. They’re either turning a blind eye to the situation, they think they’re immune for whatever reason, or they just don’t want to invest the time, the energy or the financial investment to combat the problem.”
Worldwide, BSI & TT Club estimates that some 15 significant cargo theft incidents occur every day. As logistics professionals digitize their operations, they've got to address supply chain health and bring security top-of-mind in the process in order to future-proof their operations.