As beta tests go, it wasn't much of a sampling. The three-month trial involved only 10 trucks used by FedEx Corp.'s Custom Critical "White Glove" unit, which transports time-sensitive, high-value goods requiring some form of special handling. But what emerged could tilt the playing field, albeit modestly, in favor of those tasked with securing their supply chains from villains, thieves, and scoundrels.
The White Glove unit was testing cellphone technology that would enable an employee to remotely disable a stolen or hijacked vehicle once it got back on the road. With the truck immobilized, the goods inside could be quickly recovered and the thieves apprehended because they couldn't stray far enough to elude law enforcement.
Carl Kiser, operations manager for the White Glove service, was impressed with the performance. "The technology worked," he says.
It is unclear how the new tool would be incorporated into Custom Critical's 1,400-truck fleet. The division already outfits about 20 percent of its trucks with devices affixed to dashboards and embedded in driver key fobs to automatically disable the truck unless the driver enters a special code to start up the engine. All of Custom Critical's fleet is equipped with global positioning system (GPS) technology that has become a mainstream tool to combat theft on the roads.
The ability to stop a stolen conveyance from a distance could become the latest weapon in the cargo theft wars, which cost American industry an estimated $6 billion to $20 billion annually in the value of goods pilfered while in transit. (Those estimates exclude the value of goods stolen from warehouses and distribution centers.) Firm figures aren't expected to be available until early next decade when the FBI rolls out a long-planned database dedicated to tracking cargo theft. Currently, the bureau consolidates cargo theft data with statistics covering other types of crime.
"Harden" the target
The effectiveness of anti-theft technology is in the eye of the beholder. IT vendors believe their tools can make great strides in combating theft and pilferage. Others are not so sure. Barry Brandman, president of Danbee Investigations, a consulting firm in Midland Park, N.J., that has worked in the supply chain security field since the mid-1970s, says technology, in and of itself, has limited value. Much of it doesn't work as promised or is quickly figured out by today's sophisticated criminal element, he says.
"These are businesspeople who are often part of organized crime groups that have their own supply chains," he says. Cargo thieves are so adept at swiftly spiriting their booty away from crime scenes that most property stolen out of supply chains is never recovered. Often, the goods end up in foreign countries.
"It generally takes less than four hours for stolen cargo to leave the state where the theft occurred, and everything from scheduling the hit and negotiating the sale price of the goods to the choice of export conveyance has already been arranged," says Brandman.
Arthur Arway, security director of the Americas for DHL Global Forwarding, the world's biggest airfreight forwarder, says anti-theft technology is most effective when it "hardens the target" by blanketing all channels through which thieves might try to infiltrate the supply chain. The idea, says Arway, is to create enough uncertainty in the minds of thieves so "they will avoid you and go after someone else."
Several vendors in the cargo security market have already begun offering some type of multilayered security program. For example, Safefreight Technology, an Edmonton, Alberta-based IT provider, uses its "SmartFleet" application to attack in-transit theft at multiple levels. Safefreight first asks clients to define "security zones" where trailer doors are scheduled to be opened. It then affixes sensors to the equipment that alert the user in real time if a door has been opened outside any pre-established zone, whether it be a small area such as a trailer yard or a large territory such as a multi-state region. Earl Bourque, Safefreight's chief technology officer, says most in-transit cargo theft occurs in confined spaces like loading docks.
The company's technology also tracks trailer schedules based on electronic interfaces provided to its customers. After the customer enters and submits the scheduling information, Safefreight uses its automated tracking system to monitor the driver, rig, and equipment in transit.
The SmartFleet system gives Safefreight customers a complete and accurate picture of their assets' location at all times, says Bourque. This helps reduce the potential for in-transit theft because the fleet is being constantly monitored and customers are notified in real time of any variances from preset conditions for routes, geographic zones, schedules, or door sensors. In addition, regular reports enable fleet managers to have a deeper and more accurate read of how effectively their equipment is being utilized, Bourque says.
"The goal of our systems is to take the technology beyond simple GPS tracking. We want to relieve fleet managers of the burden of continuously monitoring their fleets and enable them to optimize the security, safety, and efficiency of their assets," Bourque says.
Many shippers and anti-theft experts consider the driver to be the weak link in the security chain. For that reason, some anti-theft specialists have chosen to combat the problem with services and technology aimed at ensuring that carriers and their drivers follow pre-set procedures that minimize risk to their trailers and their loads.
As for how they monitor compliance, one method is to plant high-tech tracking devices inside loads. For example, FreightWatch International (USA), a global company that provides security services, makes use of a covert mobile wireless device manufactured by a Canadian company called Sendum Corp. The device, about the size of a folded-over cellphone, is used mostly to track truckload shipments of high-value goods such as pharmaceuticals and electronics. A vehicle with 24 pallets, for example, might be monitored by two or three of the embedded devices. The devices are inserted covertly, work off a satellite network, and will emit tracking signals at intervals that are pre-set by the user but which can be changed at any time. Generally, shippers or intermediaries embed the devices before the goods are packed. For the most part, trucking companies and their drivers are oblivious to their presence.
The devices will notify the user if the driver is not following pre-determined routes or established practices. The user then contacts the trucker who, in turn, relays the information to the driver. The reusable devices sell for $300 to $500 apiece, which doesn't include an ongoing subscription fee.
The process strengthens trucker and driver compliance, thus reducing the potential for an incident, says Ed Petow, director of quality control for Freightwatch (USA). "If you get compliance, there's less of a chance for theft," he says. Plus the prospect of surveillance tends to keep people honest. "I had one customer tell me that 'the trucking companies can't lie to me anymore,'" says Petow.
A role for RFID?
Even RFID is getting into the act. Mikoh Corp. of McLean, Va., has built and patented technology designed not to protect the asset while in motion, but the RFID chip tracking it. The chip automatically self destructs if removed from its original location, making it impossible for thieves to detach it and affix it to another item.
Mikoh officials acknowledge their company's technology will not directly prevent the theft or pilferage of an intransit shipment. They say, however, that once the RFID reader detects a security breach, users can take remedial action that may prevent future incidents. The company has also developed an advanced tag that leaves a smoke-like trace to indicate possible tampering, while the tag itself continues to function normally.
Mikoh's technology hit the market in September 2005 and today is used mostly by government agencies and onboard courier firms whose couriers carry time-sensitive and high-value material in briefcases. Perhaps the product's most widespread use is in Bermuda, where it's used to discourage tampering with the RFID chips used to ensure that commercial and personal vehicles are properly registered.
The RFID protection technology has gained little traction among large commercial users since its introduction. The lack of commercial customer uptake reinforces the perception that the cost of RFID tags and the expense and difficulty of implementation make it of doubtful value when it comes to fighting cargo crime.
Andrew Strauch, vice president, product management and marketing, says Mikoh is currently in the "educational" phase with commercial prospects. He reports that Mikoh is aggressively courting the pharmaceutical and healthcare industries, which he calls ideal candidates for technology to protect RFID tags because they make and ship high-value, perishable goods that are vulnerable to theft and tampering.
Strauch acknowledged his company's efforts have been hindered by the marketplace's lack of focus on protecting the RFID tags themselves. "RFID security has not been ignored," he says. "But users have been too busy figuring out the technology's economics and its effect on business processes to concentrate on the security of the tag itself." Mikoh's mantra, as expressed by Strauch, is "protect the tag, and you protect the asset."
Not the be-all, end-all
As with virtually all business applications, anti-theft technology cannot work effectively in a vacuum. Few dispute that the tools are less expensive, more user-friendly, and more robust than ever. However, experts warn against buying into the notion that IT offers the "silver bullet" premise that can solve what is a nagging and growing problem.
Brandman, a 36-year industry veteran, says anti-theft technology can only be effective when integrated into an organization's best practices. The growth in supply chain scope and complexity, the rise in the number of human touch points, and the fact that employees are involved, knowingly or not, in most thefts of mobile cargo combine to make the integration of technology and processes a requirement for a successful anti-theft program, he says.
"Technology must always be supported by appropriate policies, procedures, and trained personnel," Brandman says. Absent this holistic effort, "most end users will not know what they are buying," he adds.
Or as Jeanne Dumas, director of the Security Council for the American Trucking Associations, says, "Technology definitely has its place. But the best theft deterrent is common sense."
Technology's most meaningful contribution to the science of supply chain security may lie not in its ability to stop today's thefts but in its capacity to prevent tomorrow's. By mining data from previous incidents, company executives, security consultants, and law enforcement authorities can spot behavioral patterns that are more than coincidental. With the past as prologue, networks, processes, and technologies can then be tweaked to deter tomorrow's thieves.
The Florida Highway Patrol, which in 2005 launched a Web-based system to notify law enforcement and multiple state agencies of every cargo theft within two minutes after the incident was reported, added in 2007 an online mapping program that tracks theft histories by county.
A recent query into activity in Osceola County, south of Orlando, found that 11 cargo thefts had occurred during a six-month period, which, based on historical data, was determined to be a high incident rate. Armed with the data, the Highway Patrol's Cargo Theft Task Force planted decoy tractor-trailers at a specific location in the county to lure and trap suspected criminals. The bait worked: Within days, thieves hit the site, stealing one decoy trailer and five decoy tractors. The stolen decoy trailer was followed to the Miami area, where the thieves were captured and arrested.
The IT tools are having a beneficial effect, says Lt. William Jackson, who coordinates the Task Force and administers the theft notification application, known as the "Electronic Freight Theft Management System." From 2002 to 2007, the number of annual reported cargo thefts in Florida dropped by 31 percent, according to Highway Patrol data.
Furthermore, as word gets out about the agency's technological prowess, criminals are shifting their focus to other states, according to Jackson. As a result, the state, long a prime destination for stolen goods because of its proximity to Central and South America and the Caribbean, could see a long-lasting reduction in cargo theft, he says. "Thieves are leaving Florida," he claims.