The complexity of contemporary supply chains, along with the steady increase in global commerce, increases the chances that a shipper will experience losses from damage, missed deliveries and theft. Even so, companies aren’t powerless to mitigate the risk of loss. Here are five steps they can take to help secure their cargo. 

1. Map your supply chain. 

The logistics of product movement can be complex, with every step subject to error. The sheer number of transportation modes utilized can include trucks, rail, ships and planes. Each is subject to unexpected delays. And the number of geographic nodes through which the shipment must pass can include airports, rail heads and seaports. Each is a potential logistical choke point. 

The first step in the process of ensuring safe cargo delivery is to paint a picture of how and where the shipment will move. “A detailed initial mapping procedure is essential for efficient operations,” says Ron Greene, Overhaul’s senior vice president, Intel and Fusion Center. “It allows a company’s risk assessment to be much more accurate and granular.”

To ensure that each step is taken in the correct order with a minimum of disruption, the shipping company must sketch out the entire delivery path before cargo leaves its point of origination. Which transportation companies will move the product? What is the exact path? Which ports and warehouses will lend the greatest efficiency? At what day and time will the shipment arrive at each point along the way? 

2. Identify and Quantify Risks. 

Once the mapping of a shipment is completed, the company must assess the potential for costly disruptions at each point along the route. What are some plausible scenarios that could affect the movement of cargo?

“Look at seven risk factors as the boilerplate base for each specific supply chain,” says Greene. “These are civil unrest, political unrest, contraband or smuggling, infrastructure events, terrorism, theft and weather.”

Utilizing the best intelligence tools available, shipping companies must exercise foresight to identify which of the seven risk factors might occur at each portion of the route, quantify the damage that could result, and determine appropriate actions to mitigate risk. 

Analysis of potential risks can be based on historical data specific to the region through which the cargo will ship, experience gained from previous shipments, and a general knowledge of logistics. “You're never going to be able to define every single risk profile,” says Greene. “But you can get very close to understanding the most likely events along any given transportation lane that could disrupt, delay or damage shipments.”

3. Track Supply Chain Events. 

Visible shipments are safe shipments. Knowing the risks that are likely to occur along a supply chain route is one thing. Tracking their occurrence in real time is another. 

No longer can a company rely on its freight forwarder, increasingly subject to bottom-line pressures, to monitor the movement of cargo to final destination. 

“Your freight forwarder's going to find the cheapest way to move your shipment,” says Greene. “If they can send cargo to a certain port to save a few dollars, they'll do it.”

Because it has the most to lose, the shipping company must be the one to ensure security every step of the way. That can only be done by maintaining visibility of shipments at all times and quickly identifying and responding effectively to disruptions.

“Without real time tracking, your ability to identify risks and react to different scenarios is greatly impeded,” says Greene. “You're just not going to have the right information at the right time and be able to reach the right person to mitigate risk.”

4. Know the Red Flags.

If maintaining the visibility of cargo in real time is important, so is keeping an eye open for the visible evidence of security events when they occur. “You need to know your red flags,” says Greene. “You must have a good idea of the intelligence you will gather in real time that will allow you to make security-related decisions.” 

Thanks to the 24/7 news cycle, many such events are reported quickly. These include incidents of political and civil unrest, infrastructure disruptions and weather events. 

Another important red flag is often overlooked: inadequate vetting of supply chain partners. Logistics companies will often subcontract cargo movement to third parties. “Shippers need to find out if these third parties have the necessary experience,” says Greene. “Are they insured properly? Is their equipment up to par? And are they vetting their own employees?” 

5. Network with Local Contacts.

Step five is to maintain a network of important people to contact in the event of a security issue along the planned cargo route. These include local law enforcement officers, trucking dispatchers and port operators. 

“You need to quickly and efficiently communicate with those who have the capacity to change the scenario when a breach occurs,” says Greene. “You may need those individuals to take action, such as holding back a cargo from loading or recovering stolen freight from criminals.”

Assessing the quality of the organizations in the call list is also important. “In North America, we have the luxury of expecting timely responses from law enforcement agencies when problems are reported,” says Greene. “We need to anticipate scenarios in other parts of the world where local agencies may not respond in a timely manner.” Additionally, local regulations may prohibit law enforcement from responding to a request from an overseas private company unless it’s represented locally by an authorized entity.

“The risk of not taking these five steps is that you will lose control of your supply chain,” says Greene. “And if you're not efficient and can't deliver a service that the customers demand at a price point that they'll pay, you may be out of business at some point.”

Overhaul: Global Leader in Supply Chain Risk Management

Overhaul is an international leader in spotting and reducing supply chain risk. Founded in 2015 and active in 130 countries, the company serves hundreds of clients in a variety of industries with high-value or temperature-sensitive products. Examples are electronics, pharmaceuticals, food, tobacco, alcohol, high-end retail and luxury goods. 

“Logistics is a complex business, and every company has a unique footprint,” says Greene. “We specialize in adapting our risk management solutions to individual operations.” 

By drawing on technology to monitor the status of in-transit freight, Overhaul’s real-time, preventive risk-reduction process issues alerts when problems occur. “A litany of scenarios can trigger an in-transit alert,” says Greene. “They include a door popping open, a temperature change, an extended delay, or even a truck moving in the wrong direction or traveling on the wrong road. Many times, the alerts will be leading indicators to a risk that, if allowed to continue, could be costly for a client in terms of spoilage, theft or shipment delays.”

Whatever the exception, Overhaul will immediately take action to find a solution. With their decades of experience in supply chain risk management, the company’s team knows the details of how cargo moves from supplier to customer. Their response is informed by the company’s intelligence arm, which identifies, quantifies and communicates information about the ever-changing risk profile of world markets. 

And if outside help is needed? Overhaul is prepared. “When the supply chain experiences an emergency, we can quickly reach out to local law enforcement,” says Greene. “That’s one of our core competencies.”

Resource Link: www.over-haul.com