Supply chain disruptions, delays and loss of goods are costly global problems.
The supply chain must be protected against those disruptions by establishing processes like counter-terrorism evaluations, identifying the most critical elements of the supply chain system, and bolstering resilience so the supply chain can recover quickly from any disruptions.
Supply chain assessments should begin with identifying any risk that will interrupt the flow of goods from the location where materials are originally sourced, to the product being put on store shelves. A strong cargo security program should connect each and every critical link along the chain in a holistic way.
Cargo Theft, Port Shutdowns and Strikes
Supply chain disruptions, delays, and loss of goods in transit are global problems from a variety of threats.
In the U.S., over $35 billion is lost annually due to cargo theft. South Africa has seen a 30 percent increase of violent hijackings this year, with thieves targeting high-value goods like cigarettes along with lower-value items such as clothing.
Daring vehicle shipment thefts are becoming increasingly commonplace in China. Criminals deploy Hollywood-like tactics by boarding speeding trucks and passing down stolen goods to their accomplices. Thieves stole $55,000 of pharmaceuticals this way in one month, with a further $40,000 of leather goods stolen the following month.
This map shows some of the most dangerous areas for such thefts in China in 2015.
Download the Paper: Heightening Supply Chain Security
At a minimum, a strong cargo security program requires these critical elements:
- Define risks – Companies need to work with their suppliers and providers to determine which risks are most likely to occur within their supply chain, rank them according to those most likely to occur given each unique scenario, and determine which risks carry the most disruption.
- Implement risk mitigation “must-haves” – A strong cargo risk mitigation strategy starts with C-level support. Other must-haves including budget and organizational structures to support the program and financial incentives to encourage compliance to policies.
- Follow best practices – Cargo risk management strategies should address the best practices of people, processes and technology.
- Develop and manage importer self-audits – At the most basic level, perform regular supplier audits, diagram the supply chain, and profile suppliers according to location, transportation modes, port of shipment, carriers and each supplier’s tier two and tier three supplier network.
- Develop corrective action plans – Once risks are identified and ranked, shippers should establish corrective action plans (CAPs) for deficient suppliers and other supply chain issues.
- Provide risk mitigation training and remediation – This training, together with a formal, written security manual, should include overall awareness training and follow-up requirements, including in the areas of procedural, personnel, documents and records, and facility security.
With a better understanding of your vulnerabilities, and programs to manage and correct them, your company will be in a more secure position. Learn to implement best practices in supply chain security: download our new ebook, Heightening Supply Chain Security, to gain more transparency into your overall risk posture and better control in the case of a disruption.