Valuable goods are a big target for cargo crime, resulting in a negative impact on brands
Cargo crime is on the rise, especially for goods that can be easily sold for cash on the black market like food and beverage, tobacco, alcohol, electronics, fashion and cosmetics. When manufacturers fall victim to cargo crime, they lose more than the value of the lost goods —when criminals sell damaged or spoiled goods, it jeopardizes the brand’s reputation.
Moreover, competition with the black market drives prices down and causes a dramatic increase in the cost of insurance and deductibles along with the risk exposure. In some cases it can reach a point where certain goods can’t be insured at all. In extreme cases, theft results in markets “out-of-stock” and major loss of sales.
Cargo crime is expected to rise due to the COVID-19 / Corona-virus crisis
According to a study on job displacement and crime, people commit more property crimes during mass layoffs. The economic pressure and lack of a weekday routine are key drivers for the “crime for-profit” increase, providing additional motivation to commit a crime. Opportunities for cargo crime are also on the rise as government countermeasures have created major disruptions in global supply chains.
Border control, disruptions in port operations and railways, and the scarcity of commercial flights are leading to longer, unpredictable supply chains. Facing increased consumer demand, companies will have no choice but to initiate immediate business continuity plans to prevent supply chain risk exposure, shipping more and more goods to compensate for unexpected losses and delays. This means a rapid increase in the volume of goods in transit that are waiting to be picked up in various unsecured locations, for longer periods. Together, all of these factors result in an opportunity, or “perfect storm” for cargo theft. Furthermore, companies could be exposed to various and unpredictable cargo threats that aren’t likely to be the governments’ top concern as they focus on dealing with the pandemic. As a result, governments aren’t likely to allocate scarce resources towards combatting cargo crime. Therefore, COVID-19 poses a major security threat to the consumer-goods industry. Cargo theft leads to losses of billions of dollars, organized crime is getting more sophisticated, and illicit trade is growing and expanding its reach across industries
Reduce risk and mitigate impact with in-depth data analytics of goods-in-transit
Companies can and should take action to mitigate the risk of cargo crime, especially during the pandemic. The key to mitigation is reliable data analytics about goods-in-transit. Real-time tracking of cargo location at any given moment, and the ability to monitor and analyze the container seal, temperature, humidity (and other aspects), gives companies the data they need to ensure the security of their goods-in-transit.
For live shipments, alerts should be sent as soon as a security breach is suspected: for example, if a container door is opened in an unexpected location, or cargo is traveling along an unapproved land route or parked in an unsecured location. When companies receive alerts in real-time and escalate the situation, they can either prevent the theft or proactively mitigate losses.
Data gathering for cargo theft investigations
Once theft has occurred, accurate cargo data is invaluable for supporting an investigation. The data is used by both the company and its insurer to facilitate the claim, by identifying the responsible party and increasing the likelihood of expedient compensation. When shipping luxury goods or sensitive goods with high taxation rates, it’s important to pinpoint the location of the theft to avoid paying excess taxes for the stolen goods. For example, one of Contguard’s customers, a consumer goods company, saved millions in taxes by using data analytics to prove that the theft occurred mid-ocean, and therefore no taxation was applicable. The data gathered can also be useful for law enforcement investigations.
Companies can use aggregated data about their goods-in-transit for policy decisions, using it to identify trends, anomalies, and patterns in their cargo security risk profile. Bottom-up route analysis can reveal all the locations where the cargo stopped, and correlations with the exact geolocation of suspected security breaches can reveal the areas where cargo faces a high risk of theft. Companies can then adapt their security policies, instructing their logistic providers to avoid certain parking locations. Such data can also support law enforcement authorities: for example, repeated patterns can reveal the locations of organized crime activity. These analyses also enable benchmarking of route alternatives and logistics providers, based on their cargo security score.
Contguard offers an inclusive package of data products for goods-in-transit
In order to track and monitor their goods-in-transit, and then leverage that data to mitigate security risks, many companies reach out to Contguard.
Contguard utilizes AI and IoT devices to track and monitor goods-in-transit for leading global brands. We take care of all the technical and logistics aspects of the IoT devices, which are attached to the goods and send live data about their location and condition. The data is then processed using Contguard’s cloud analytics solution. Customers can log in to Contguard’s unique platform, CGInsights, to track their live shipments and manage exceptions in real-time, as well as generate long-term insights using Contguard’s analytics platform.
In addition, Contguard offers a 24/7 global escalation service, taking appropriate action upon any alert (based on pre-defined protocols). To complement the offering, Contguard’s experts work with customers to generate insights and recommendations based on its innovative analytics platform.