Last year I attended a large supply chain conference with several thousand people in attendance. Shippers, brokers, carriers, warehousing technology, insurance and consulting agencies were all well represented.
While walking down a long corridor en route to the expo hall, a gentleman stopped me, and pulled me into a side hall. I felt like a character in a Tom Clancy novel, as if some sort of top secret information that would put my wellbeing at risk was about to be shared with me.
The gentleman explained that he worked for a brokerage. A recognizable name in the brokerage industry at that. He looked all around as if he was nervous to be seen speaking with me and carefully whispered so as not to be heard: “We had a theft two weeks ago. And it’s not the first one this year. I think we might have a problem. Can Tive help?”
Since then, the industry seems to slowly be coming around to admitting that theft and fraud issues are plaguing the industry, and also the scale and depth of these issues. The irony of the situation is that there are more tools and resources for combatting freight theft and fraud than ever before. Yet, the rates of theft and fraud are continuing to rise.
So what is the issue? And what is the solution? Why is this happening and what can be done? In short: Freight thieves today are strategic, and the efforts to protect cargo are largely tactical.
Strategic Criminals vs. Tactical Defenses
Sun Tzu once said, “Strategy without tactics is the slowest way to victory, and tactics without strategy is the noise before defeat.”
Organized crime groups have studied the intricacies of supply chains. They know how transportation networks work, and they know the weaknesses in these chains that are easy to exploit. From double brokering schemes to turning otherwise legitimate drivers and warehouse workers to infiltrating reputable companies and cyber crime, bad guys are strategic and they are good at executing their strategies.
Meanwhile, shippers, carriers and freight brokers are frantically and tactically deploying technology and “solutions” as if they were playing Whac-A-Mole. Instead of deploying tactics as part of an orchestrated strategy, technology solutions are deployed in silos in response to acute events.
In other words, the bad guys are proactive with their strategies and the good guys are reactive in their response.
For example: An organized crime group may pose as a carrier to an unsuspecting broker in order to double broker a load, leading to a theft of the cargo. After being taken advantage of, the broker may quickly deploy a carrier vetting platform to protect from falling victim to this again.
So what’s wrong with this response? Well, it lacks strategy, and that leaves the broker vulnerable to other schemes. The bad actor steals yet another load through another scheme, and the broker deploys yet another technology to combat that avenue of theft. And the pattern continues.
So what can be done?
Building the Security Layer Cake
Here is a three-step guide to building the security layer cake:
1: Build and define a security strategy that stacks probability and odds in your favor: It’s important that this strategy can be woven into the operational day-to-day so that it becomes routine. In this sense, strategy is closely akin to both company culture and processes.
2: Determine the implementation of the strategy: This is where the construction of the technology layer cake is woven together to make a protective fabric. Choices around multiple technologies and protocols to deploy—but also how they will be connected and woven together—are key. Technologies operating in silos prevent the overall strategy from being able to reach its potential, and maximizing impact is the goal.
For example: Including carrier and driver vetting as a driver check-in protocol, along with photos of the truck and trailer and notation of documentation and any embedded tracking devices at the origin facility, can feed both operations and security systems. This enables operations teams to have clear documentation and tracking, while equipping security teams with valuable information should the unexpected occur.
And this example is just the beginning. The ability to share shipment information quickly with outside agencies—including law enforcement, investigators, insurance, and more—aligns and informs multiple organizations so they can more easily work in tandem with one another.
3: Execute: Teams need to be trained not just on the individual technologies they are using to combat freight theft, but on the overall defense strategy and orchestration of these technologies. The order of operations is key, and teams and individuals need to be trained to manage risks the way a conductor orchestrates a symphony.
At its best, technology equips people and makes them more capable. And when technologies are strategically woven together, the result is an amplification of their impact.
The best strategies are communal, and extend beyond the individual company. To the degree that the supply chain industry as a whole needs to weave technologies together strategically to build systems and process that are better equipped to withstand the onslaught of theft and fraud attempts, the industry also needs to lean into building a network and ecosystem of trusted relationships between companies and people that span across multiple sectors (law enforcement, technology, insurance, logistics service providers, and peers to name a few). There is strength in numbers—and there is greater insight to be found in multiple perspectives.
The elephant in the room is cost. Deploying technology, building systems and networks, taking time to learn the ins and outs of the issues at hand: all this takes time and money.
However, this money shouldn’t be viewed as pure costs, but rather as an investment. The ripples of freight theft extend beyond just the value of the cargo lost. The costs associated with a re-shipment on rush, coupled with delays and unhappy customers, can add up. And on top of this there are concerns about name brand products being sold on the black market.
In the same way that smart phones are no longer luxurious nice-to-haves in the business world, strategy, technology, networks, and security ecosystems are now mandatory.
What a Modern Cargo Security Ecosystem Looks Like
So what does the layer cake look like?
– Carrier and driver vetting that are baked into a driver check-in procedure that captures information about the equipment moving the cargo, along with what tracking methods and devices are embedded and on board.
– Embedded GPS devices working in tandem with software for layered and contextualized enhanced alerting logic. This includes alerts about route deviations, prolonged stops, red zone and risk zone activity, and cut seal and light alerts for catching deviations early on.
– Workflow automations designed to empower immediate response. Automating specific actions for certain situations based on tracker data can give response teams a head start in responding to a timely situation.
– 24/7 live monitoring: Having a monitoring team that is plugged into a greater law enforcement network—and equipped with robust SOPs for any unexpected event—completes the layer cake. If embedded tracking devices are the foundational layer, 24/7 security monitoring is the all-important corner piece. You can’t have one without the other; the layers in between serve to strengthen the overall structure.
– Analytics backed by robust and dependable aggregate shipment data from embedded tracking devices. It’s been said that AI and machine learning are only as good as their input data. Embedded tracker data provides a dependable source of rich shipment information that can expose and highlight previously unforeseen patterns and trends. This insight can be key to productive and impactful network optimization efforts.
Preparedness Will Define the Future of Supply Chain Security
In summary, the freight theft and fraud issues and threats plaguing supply chains are not going away anytime soon, and there are no silver bullet solutions to slay the bear that is freight theft and fraud.
Building a layered strategy—by weaving together technologies and networks into a strong ecosystem—will ensure those within the network and ecosystem are far from being the slowest ones running from that bear.
It’s been said that in the moment of truth, people (and businesses) do not rise to the level of their expectations; rather, they fall to the level of their preparedness.
Hoping for the best is healthy, but it isn’t a strategy. Buying tech without a strategy and hoping it does the trick is also not a strategy.
Hoping that this issue works itself out and wishing for the best is only as effective as the strategies deployed to meet the challenges at hand. The strongest defense against modern freight theft is not a single tool, but a connected ecosystem built before the next incident occurs.
