5 Ways to Cut the Risk of Cargo Theft
Risk models provide a key advantage to firms operating globally, and are the first step in identifying key trade lanes, business partners, and the areas most likely to cause harm. The more you know, the easier it is to manage the risk.
While risk modeling is an important part of the Customs-Trade Partnership Against Terrorism (C-TPAT), few companies use the information to identify threats within their supply chain by trade lane, and their vulnerability against those threats. Part of threat analysis includes how the shipment is routed, the number of stops it makes, and identifying each player in the supply chain.
What’s Working, What’s Not?
In 2017, the C-TPAT will celebrate its 15th year. It was the first program to formally present minimum security guidelines for U.S. importers. It later expanded to include exporters, and became the catalyst for similar programs around the world.
Yet in 2016, cargo theft topped $26 billion, according to the British Standards Institute, and the longstanding trends of drug smuggling, human trafficking, and phishing scams are as prevalent today as they were 15 years ago.
Typical firms address the most glaring security needs, such as physical and access controls. Yet often, while the front door is locked, the back-door staging area is rife with access points for unscrupulous agents.
To reduce risk, follow these five sound security practices.
- Know the minimum security guidelines. C-TPAT is a trust and verify program with U.S. Customs and Border Protection (CBP) validations occurring every three to four years. Many firms flunk the annual training and brush up their program in advance of a CBP validation meeting. Be prepared with ongoing training and monitoring.
- Update your risk model. Risks within supply chains change, even if your trade lanes don’t. At a minimum, an annual risk model review is necessary to consider where you conduct business, and any changes that may cause your firm to be a target. Best practices include risk model reviews more frequently, ideally at least once every quarter.
- Identify and manage all business partners. Primary and secondary business partners are often easy to identify. However, service agents often subcontract. Best practices in this area include auditing service providers and the procedures they have in place for choosing subcontractors.
- Manage the routing. Direct routing may not always be possible. When it isn’t, does your team know how the cargo is arriving? Firms with advanced cargo security programs monitor everything from the routing of product to managing the transit time. Taking measures to control product routing reduces the risk of loss while the product is in transit.
- Automate for greater visibility. A holistic approach to cargo security includes the ability to see your product at all stages of transportation and distribution. Updating automation capabilities to include visibility from the supplier to your warehouse is critical to managing risk and monitoring business partners.
These five steps, along with a program to fully implement C-TPAT minimum security guidelines, will help reduce your risk of cargo theft or loss.