Editor's note: Lisa Greenleaf will be appearing on the May 4, 2012, episode of Quality Digest Live at 11 a.m. Pacific, 2 p.m. Eastern. That episode will be available on-demand beginning Monday, May 7, 2012.
For as long as cargo has been transported via road, there has been cargo theft. Whether from the backs of Mesopotamian camels crossing the Syrian Desert, Chinese convoys traveling the Silk Road, or pioneer wagon trains traversing the U.S. prairie, cargo theft has plagued commerce, slowed economic development, and raised prices.
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According to the U.S. Census Bureau and other sources, 120,000 businesses generated $220 billion of revenue in 2007, using seven million six-or-more-wheeled trucks to transport 1.3 billion tons of cargo over America’s 8.5 million miles of roadways. Trucking accounted for more than 28 percent of all the freight tonnage moved that year, the latest year for which census figures are available.
FreightWatch International, a leading provider of logistics security that tracks cargo theft in the United States, recently published a report that estimates 2.5 tractor trailers are stolen each day in the United States. For the two-year period covering 2009 and 2010, the average value of stolen cargo topped $520,000 for each incident, meaning nearly $475 million per year of truck freight was being stolen.
To put truck freight loss into perspective, consider the following: The FBI estimates that between $4,000 and $8,000 is taken at each of the 8,000 U.S. bank robberies in a typical year. That high-side total of $64 million is less than one-seventh of what is lost to truck freight theft. If the above comparison isn’t already frightening enough, consider the fact that many believe the actual cost of stolen freight is significantly higher that than the nearly half-billion-dollar estimate cited above.
A November 2010 bulletin issued by the FBI titled, “Inside Cargo Theft: A Growing, Multi-Billion-Dollar Problem,” says, “Because cargo theft statistics have never, until recently, been a separate reportable category in the Uniform Crime Report (UCR) and because many companies don’t report cargo crimes (to avoid bad publicity, higher insurance rates, damage to reputation, and embarrassment), the exact dollar losses aren’t known. Industry experts estimate all cargo thefts ring up as much as $30 billion in losses each year.”
To be fair, it should be noted that the FBI estimate covers all forms of cargo theft, not just trucking. However, if one were to combine the facts that the FBI’s estimate ($30 billion) is 60 times higher than the numbers derived from FreightWatch International’s figures ($475 million); and more than a quarter of all freight tonnage shipped is done so on trucks, it’s not far-fetched to assume that the stolen truck freight costs are at least 10 if not 20 or more times greater than bank robbery losses.
As if the direct value of the theft loss is not alarming enough, the FBI goes on to say that cargo theft is “...usually a ‘gateway’ crime. In many instances, a cargo theft investigation will turn into a case involving organized crime, public corruption, health care fraud, insurance fraud, drug trafficking, money laundering, or possibly even terrorism. Criminal groups use the illegal proceeds they gain from stealing cargo to fund their criminal operations. And the fear is that terrorists could use their proceeds to launch attacks or fund training.”
Organizations that ship products (consignors) maintain full control of their products as they are prepared for shipment to customers (consignees), who assume responsibility upon successful delivery. Neither side, however, has control over the security of the materials while in transit; that responsibility lies with whichever of the 120,000 trucking firms is actually transporting the products.
The Transported Asset Protection Association (TAPA) is a unique forum of more than 600 members that unites global manufacturers, shippers, logistics providers, carriers, insurers, service providers, law enforcement, government agencies, and other stakeholders with the common goal of reducing losses from international supply chains.
The association operates around the world, with key regional branches in Europe (TAPA EMEA), Asia (TAPA APAC), and the Americas (TAPA AMERICAS), and smaller groups in Brazil and Japan. Branches include chapters in South Africa and Mexico, with new chapters developing in other countries plagued by cargo crime. Each TAPA branch or chapter participates in the worldwide organization while also addressing the needs of its own regional members.
The mission for TAPA AMERICAS is to protect high-value, theft-targeted assets in the transportation supply chain in the Western hemisphere by:
• Collecting and exchanging data and intelligence information on a global basis
• Cooperating on preventive supply-chain security within the industry and with government organizations
• Setting and promulgating best-in-class standards for facility security and transport
• Working as a parallel organization with TAPA EMEA, TAPA APAC, and other global TAPA branches and chapters
Theft of electronics, pharmaceuticals, clothing, high-end foodstuffs, auto parts, building supplies, and almost any other cargo of value is a daily event in the Americas. This type of crime leads to billions of dollars in lost revenue, compromised brand integrity, and in some cases, harm to consumers. While government programs such as Customs-Trade Partnership Against Terrorism (C-TPAT) focus on keeping dangerous items out of the supply chain, TAPA focuses mainly on the issue of theft. But because the concerns are interrelated, TAPA and government agencies work together in confronting these challenges.
The leverage TAPA exerts has had a measurably positive effect in promoting standardization and industry change to reduce cargo crime. Major freight handlers are joining TAPA or employing TAPA-recognized security standards for facility certification as well as for freight care and handling. TAPA has become a worldwide benchmark for security handling guidelines and practices. Business insurers are asking prospective customers about their security practices, and specifically whether they hold TAPA certification.
Two standards have been developed by TAPA that are used by manufacturers, shipping, and logistic companies to ensure the security of their goods in transport: the Freight Security Requirements (FSR)—designed to ensure the security of goods during storage; and the Trucking Security Requirements (TSR)—designed to ensure the security of products while being transported by trucks.
The Freight Security Requirements (FSR) provide minimum levels of security essential for the protection of products during storage and transit within the supply chain. There are three levels of security certification: A, B, and C. Class A certification represents the highest level of security and is typically required when dealing with heavy vehicle transport of technology goods. Class B is often required for many contracts, depending on the level of risk associated with goods and transport, while Class C is commonly used where only minimum levels of security are required to conduct any type of business in a given sector.
The FSR addresses seven categories: perimeter security, office access control, facility dock and warehouse access, security systems, security procedures, standard security requirements, and pre-alerts. The subjects or types of activity that fall within each category are listed below.
1. Perimeter security: fencing and gates; closed-circuit TV systems; lighting; perimeter alarms; and facility openings, such as window, doors, skylights and the like.
2. Office access control: visitor and employee entry points to office.
3. Facility dock and warehouse access: escorted visitors, closed-circuit TV resource access, recording and archiving, high-value storage area cages and vaults, motion-detection alarms, and similar items.
4. Security systems: monitoring and archiving intruder alarm, electronic access, closed-circuit TV systems, as well as the restriction of access to such systems.
5. Security procedures: There are three general categories—documentation, background checks, and terminated employee. Documentation covers security awareness training, emergency contact lists, employee container (lunch box) policies, random trash inspections, and more. Background checks involve employee criminal and work history confirmation. Terminated employee procedures involve record keeping and access-prevention protocols.
6. Standard security requirements: solid-top and hard-side truck requirements, tamper-evident security seals, vehicle immobilization devices, two-way communications capabilities, unscheduled event reporting, route-risk assessment, loading and unloading procedures, and other truck-related elements that are addressable before and after a truck is on the road. Other security-related requirements include driver training, remote vehicle tracking, escort availability, real-time base and police communications, and others.
7. Pre-alerts: delivery capabilities with regard to departure and arrival times, driver and company identification, shipment information, seal numbers, and others.
The Truck Security Requirements (TSR) provide minimum acceptable levels of security throughout the supply chain utilizing trucking and associated operations. This standard also has three levels of security certification; however, the levels are designated by numbers: 1, 2, and 3. Classification 3 is the lowest tier, requiring only 60-percent compliance of nonmandatory standards and requires reassessment only upon consignee, consignor, or other TAPA-member demand. Classification 2 demands compliance with 80 percent of nonmandatory standards and requires reassessment either annually or upon significant changes to the truck route. The most stringent, Classification 1, shares the reassessment requirements of Classification 2, but also demands 100-percent compliance with all nonmandatory standards.
The TSR addresses six categories: physical security, security systems, security procedures, personnel security, driver training, and enhanced security requirements. The subjects and types of activity that fall within each category are listed below.
1. Physical security: locks for truck doors and fuel cap, physical conditions of the trailer (e.g., hard-sided or box trailer, reinforced curtains) high-security locks for trailer, tamper-evident seals on trailer, trailer immobilization devices, top- and side-markings, and others.
2. Security systems: incident-notification procedure documentation, two-way communications, satellite or equivalent tracking systems, navigation and route-deviation alerting, home base or third-party alerting systems, alarm systems and cab or trailer immobilization devices.
3. Security procedures: load collection and vehicle sealing, delivery procedures, route scheduling, incident reporting, vehicle maintenance, stops, secure parking, contingency planning, key management, and other elements.
4. Personnel security: driver screening and vetting, pre-employment checks, and hiring and termination procedures.
5. Driver training: security awareness, collection and delivery handover procedure, and robbery response preparation.
6. Enhanced security requirements: These relate only to Classification 1 certifications, as should be expected, and involve double-driver requirements and overt or covert armed escorts, where applicable.
The appropriate security level will be dictated by any number of elements. The value of the shipment is obviously a significant factor, but there are other considerations as well, including overall route safety, load perishability, inherent cargo dangers, weather conditions, and others.
Generally, the level of FSR certification will be determined by the needs of a carrier’s customers. In most cases, when dealing with high-technology or high-value goods, a carrier will be required to have achieved a Class A certification. Class B is often required for many contracts, again, depending on the level of risk associated with the materials under transport. Class C is typically sought when a minimum level of security is needed.
TAPA certification is recognized globally as the industry standard for cargo facility and transport security, and is awarded only to facilities that comply with the highest security standards. However, the actual process by which TAPA certification is granted is not overly complex.
TAPA certification is applied at the facility level and typically involves a one- or two-day inspection of a facility with repeat inspections occurring during a three-year period. To date, about 800 certificates have been issued worldwide.
The auditing process is not done by TAPA, but rather through a TAPA certification body, of which there are a limited number—only six worldwide, as of this writing. Companies that seek certification must contact one of these approved firms.
TAPA-approved certification bodies use the highest FSR standards when auditing transportation supply-chain facilities. If the completed audit results in a satisfactory score, TAPA AMERICAS will issue the appropriate A, B, or C level certificate through the auditing firm.
Certification applies only to a specific facility within the transportation supply chain. A company cannot claim to be TAPA-certified unless each and every facility within its transportation supply chain has a current certification.
Cargo theft has been a problem since cargo was invented, and total prevention will most likely never be realized. However, TAPA certification signifies that a particular facility has taken a number of precautions that minimize the probability that theft will occur. Naturally, a facility that has been certified to meet particular security standards will be more attractive to a security-concerned shipper than a noncertified facility.
The TAPA community features open communications and provides valuable information to its members. TAPA standards are relatively simple to implement, and certification is easy to earn, making the cost to certify readily affordable. TAPA standards fit well with other security management systems, such as ISO 28000, and are rapidly being adopted as best practices by many of North America’s leading shippers.
While there are certainly a number of present-day benefits to be derived from being part of the TAPA community, the future holds even more. Communications and technological advancements will continue to change the way assets are protected while in transit. With its emerging role as a leader in transported asset protection, the TAPA community will not only be able to be the first to enjoy the benefits of improved security measures, TAPA also can influence the development of such measures to help ensure a smooth and secure flow of goods throughout North America and the world.
Lisa Greenleaf has been a quality manager for 25 years and responsible for product quality and customer interface in the electronics and technology fields. She has participated on numerous government and regulatory body committees responsible for the establishment of military and commercial specifications that apply to the printed circuit board manufacturing industry. She is currently a certified lead auditor for ISO 9001 and QC 080000, the IECQ standard addressing hazardous substance process management. She manages a team of approximately 40 auditors in her role as the business field manager for North American systems at TÜV Rheinland of North America.
