According to industry observers, cargo theft and loss estimates range from $10 billion to $30 billion a year. Yet, when we talk to logistics and shipping companies to offer solutions to deter cargo theft, the most common response we are given is "We don't have any theft problems and even if did, our insurance will pay for it!"

If no one truly has a theft problem, our insurance rates would still be affordable and we would have little need for the products and services offered by so many of today's' cargo theft organizations and associations. We all understand that cargo theft is an extremely sensitive issue, but it seems to me that when people deny having a problem with cargo theft, we are contributing to the problem and enabling thieves to grow their lucrative business at our expense.

We recognize that once word gets out that products have been stolen, it could hurt your company's reputation. But, until people start to be more open about the subject, cargo theft will only continue to thrive. As a group, we need to support taking proactive measures against cargo theft. By doing so, we will help ourselves to bring profits back into our organizations, save time, reduce labor and most importantly, increase our customers overall satisfaction.

Who pays the price for cargo theft?
Even though much of the actual loss is recovered by insurance claims, the recovery is typically at the wholesale cost. And how many times can you really report a claim to your insurance company without ramifications? High insurance premiums and the loss of sales will eventually take a toll on your company's hard earned revenues. In addition, the inevitable resale of stolen goods on the "black" market tarnishes your company's good reputation. When you see a $ 3,000 big screen TV at the local retail store, and then find the exact same TV being fenced through an internet site for $ 1,800 you can be reasonably confident it's stolen goods. Having your products sold through these types of channels not only hurts your relationship with your valued distribution partners, but it also diminishes your products perceived value.

In addition, take into account the cost when your products are not delivered to your retailer on schedule. The time and additional cost to track, replace and reship is never recovered. Potential charge-backs from the big box retailers will quickly transform any potential profits into a significant loss. Then, to top it all off, how much does it cost your sales team to perform damage control with an angry customer? The beating your sales department could take is lowered customer expectations, reduced sales, cancelled PO's, and if your customer can't get the product they need from you on time, they'll seek help from one of your competitors! Throughout the years, cargo theft and loss has managed to wreak havoc on even the strongest business relationships.

Lack of product availability and selection at a higher price beats a path right to the consumer's wallet. Unfortunately, most all retail manufacturers today have to build cargo loss into the price of the product. With soaring fuel and energy costs impacting every aspect of consumer goods along with increased transportation and insurance rates, just how much more can the consumer bear? We all need to be smart and educate ourselves to the reality of cargo theft. Instead of pretending that cargo theft is not a "real" problem, companies need to establish figures on their losses and subtract that figure from their bottom line profits. Once this is achieved, you can promptly calculate how much security you need to implement within your operations.

Take a stand against cargo theft
While technology plays an important role in security with GPS tracking systems, LoJack and security monitors, your efforts should include a solid plan for internal security procedures and processes. Here are some tips you can easily implement starting today.

Know who's in and around your building
• Watch for unknown vehicles parked around gates and entrances
• Report any people using video cameras or taking notes outside your facility
• Watch for unauthorized persons on the grounds or near entrance
• Set up 24-hour security and cameras
• Vehicles that seem to be following drivers - thieves work in teams and may follow vehicles waiting for an  opportunity to hijack driver and cargo

Report suspicious activity immediately
• Criminals can move stolen goods quickly, contact law enforcement immediately
• Respond to alarms. Frequent "false alarms" could be a sign potential thieves are testing facility security systems and response times

Manage Information Flow
• Share load information to only those individuals who have the need to know
• Warehouse workers should remain as such. There's no need to be in the front office with access to customer  files
• Maintain strict inventory control

Know your supply chain
• Know the carrier and driver scheduled to pick up and verify their personal ID If they refuse to provide ID, do not tender cargo to them
• Monitor delivery schedules and routes
• Occasionally review security processes of supply chain partners

Employees first
• Screen and train employees
• Develop employee partnership and communication programs
• Spot check inventory control
• Start an anonymous tip line for employees to report suspicious activity

Give your shipments some true identity
Preventing theft does not need to cost a fortune but rather an investment of time and training to establish some internal security procedures. For tractor trailer rigs, you can implement high tech solutions such as surveillance monitors and GPS tracking systems or for individual packages and pallet shipments; you can use low-tech solutions such as custom printed theft-deterrent labels, self-voiding seals and tamper-evident tapes.

Tampering and pilferage of palletized goods are usually crimes of opportunity so you'll want to select a quality security tape or label that leaves a visual residue. This will make it virtually impossible for thieves to cover their tracks without visual detection at the point of transfer or delivery. This is important because most receiving operations do not take time to properly inspect their in-bound shipments. In many cases, thieves pull products from the middle of the pallet and then put the pallet back together in a way that disguises their work. Using security products that make it visually obvious that the load has been compromised helps recipients to quickly identify and refuse shipments that otherwise may have a concealed loss.

Concealed loss takes more effort to locate the point of theft, and worse yet, contributes to a lot of finger pointing and blames shifting between many shippers and consignees. Pallets that are properly identified help to reduce these types of conflicts. When products are stolen, having good product identification will greatly assist the police in their recovery efforts. Merchandise that shows no evidence of tampering can be returned to the rightful owner and marketplace faster than pallets that have been broken into.

Avoid using "stock-off-the-shelf" security tapes as these items can just as easily be purchased by thieves and re-applied to your shipment to make them look intact. Custom imprinted tapes and labels cannot be easily replicated in the field. Make sure to change the imprint or tape color on a regular basic to keep thieves off balance. Prompt visual detection at the point of transfer and destination is essential to reducing theft and pilferage.

It's critical that your customers fully understand and buy into your security procedures. If they know how your pallets are prepared at point of origin, the better they can identify tampering once the shipment is received at their facility. The faster they can identify a tampered shipment; the sooner authorities can be notified. Achieving supply chain security is simple when we all work together to implement a sound procedures that employees can follow on a daily basis.

Summing it up
"When it comes to transporting cargo from one point to another, there are many occasions for security to be breached," Bob Frucci, CGM-AST Director for North America said. "For shippers to overcome threats, the key is maintaining constant, thorough vigilance to ensure there are no weak links anywhere along their entire supply chain." Frucci also points out that rising fuel costs have complicated supply systems, and that "makes the cargo easier to hit. It's going to be handled more times. More time, more handling, more hands in the game."

Don't sweep your cargo theft problems under the carpet. There are a wide variety of organizations available to assist with discreet and proactive security planning to ensure your company saves money, time and achieves a higher level of customer satisfaction. Get involved to combat cargo theft through various cargo security associations:

Los Angeles County Sheriff's Department Cargo Cats www.cargocats.us/index3.htm
Western States Cargo Theft Association www.wscta.com
Southern Florida TOMCATS www.dot.state.fl.us/mcco/information/cargo_theft.htm
International Cargo Security Council www.cargosecurity.com/ncscCustoms-Trade Partnership Against Terrorism (C-TPAT) www.customs.gov.xp/cgov/import/commercial_enforcement/ctpat

About the authors: Jon Rodberg is Vice President at Eden Outsource, the West Coast distributor for CGM-AST theft-deterrent products. Bob Frucci is CGM-AST Director for North America. To contact Eden Outsource please email jon@edenoutsource.com or visit their web site www.edenoutsource.com. To contact CGM-AST please visit their web site www.cgm-ast.com.