Stealing has always created setbacks in the supply chain. While security measures have been developed to deter it, cargo theft is still rampant today. Some repercussions include a ruined reputation, diminished finances, low stocks and production, and increased planning and resources.

Read also: Safeguarding Supply Chains: Navigating the Surge in Fraud and Cargo Theft

Logistics professionals must be well aware of how fleets are compromised and how to prevent theft from happening. Here are some vital things they should consider.

Reputation Concerns

Reputation is always a major concern for businesses. Cargo theft may initially not seem related, but it is intertwined with company image. When an external party steals a consumer’s package in transit, they won’t point at the thief. The perceived fault falls on the company’s inability to protect it before it arrives at its destination. 

Most customers may be unaware of such a breach, which can lead to assumptions that the cargo company is responsible for stealing. There may also be concerns about the leak of personal information, as most packages feature those details to get to the right destination. Data privacy requires more recognition.

Global supply chain managers may brush this information off, but they should be wary of these blind spots. A Deloitte survey finds that global executives overestimate customers’ trust in their supply chain. For instance, executives gave themselves an average score of 80 on reliability, but their patron base only came up with a 65. Capability is another dimension they lacked, with professionals preaching 84 while consumers ranked it 75.

Cargo theft can contribute to this disparity in reputation. Once a company gets a bad name, it can bid farewell to its customer base. Many will likely avoid problematic delivery services. People may return but will likely look for more trustworthy brands with good security. 

A negative rep can also trigger mistrust with partners. Global supply chains depend on one another. However, a drop in consumer confidence creates less incentive to partner up. They may also worry about tainting their name in the process. 

Financial Impact

Cargo theft can also create financial problems. A bad reputation can result in fewer sales and deliveries, and slowed demand can create hiccups in the global supply chain. Some companies may not survive, resulting in company closures and an imbalance in the supply chain. 

There are also direct losses in terms of stolen products. According to reports, 925 cargo theft incidents occurred during the first quarter of 2024 alone, averaging $281,757 per robbery. A total of $76 million was lost overall. As operations become more planned and elaborate, each incident may have a higher financial impact than before. 

Expenses may also go to waste. Running a fleet vehicle is costly, but carrying and delivering cargo brings in profit to shoulder those numbers. Stolen freight eliminates the surplus and puts a company in the red.

Cargo theft removes operating profit for that specific trip. Multiple incidents happening to the same establishment within the same quarter can lead to bankruptcy. 

Many people are employed in the shipping industry. It’s estimated that 105,220 agents are working in cargo. They are responsible for inventory management, route movement, packaging, driving and so much more. Companies must pay these employees by the hour.

Some companies refuse to pay carriers when freight is stolen. Others may seek compensation or cite negligence and close the case altogether. Insurance premiums are costly as cargo theft continues to be a threat.

Dwindling Supplies

Global supply chains provide plenty of goods. However, robberies can raise questions about whether the products will last. Meeting demand has always been a recurring issue for executives.

For instance, food and beverages can take time to cultivate, manufacture and package. Unfortunately, they are the top targets of criminal activity due to an inflated economy and demand from desperate consumers. 

Cargo theft isn’t solely liable for delays within the global supply chain. For instance, the car industry faces a raw material shortage, with the deficit extending to 2025 and beyond. Overseas conflicts like trade wars and invasions have also halted production in automaking countries.

The added strain of losing products is difficult for producers to face. The blame falls on fleet managers who were unable to secure high-value items until they reached their destination. 

Unsafe Routes

Determining the best delivery routes is a major consideration in preventing cargo theft. Speed and efficiency are the top priorities that most supply chain professionals focus on when planning how to transport their freight. However, priorities also include package security and driver safety.

For instance, certain South Freeway intersections in Dallas-Fort Worth were common areas for cargo theft in 2023. Executives must either take the risk of going through the passageway for quicker delivery or plan a longer route to avoid it. The latter would require extra resources. 

Unsafe routes are even more of an issue on a global scale. Say there’s an ongoing rumor of robberies in a certain passageway at sea. Companies would have to determine whether to risk sending a cargo ship through or take a longer route. 

Risk Analysis

Every professional should be vigilant in preventing breaches with their cargo transport. A risk analysis can help narrow down the chances of cargo theft. For example, a probability study finds most past incidents involved stealing from a vehicle, which accounts for 64.2% of accidents. 

The study also found that truck theft accounted for 20.3%, while vehicle theft was 6.26%. Other incidents involve theft from the facility, trailer and container. Instill the strongest security measures in the areas with the highest level of probability.

Advanced Theft Mitigation

Cargo theft does not just target drivers. Some criminals launch cyberattacks to bypass authentication processes and access valuable freight. They may also use data to pose as reliable carriers, which can increase mistrust between point persons within the supply chain.

There are efforts to combat these issues. For instance, one company provides visibility software to pinpoint and mitigate freight shipping delays with AI. Alerts and other organizational tools can minimize room for error in security systems. The business secured $73 million in financing for research and development and customer acquisition.

Hold the Line on Supply Chains

Cargo theft is prevalent in the current landscape. Many global supply chains hold strong despite previous attempts, whether successful or not. Logistic professionals should persevere against such crimes and focus on delivering stellar service to consumers to strengthen their reputations and prevent loss.