Logistics and supply chain operations have been grappling with a significant surge in cargo theft in recent years, with incidents increasing by a staggering 57% from 2022 to 2023, according to a report by Cargonet. This escalating issue not only poses direct financial losses to businesses through loss of product and the ultimate sales value, but also has far-reaching implications on end-consumers and the broader economy. Many large businesses have pointed to fraud and theft as drivers of price increases and tighter profit margins.
As financial pressures mount, there is a correlation to the cadence of fraudulent activities within supply chains, highlighting several questions that demand answers.
Who is in the driving seat? Literally. Who is handling shipments of high value cargo that are being re-routed, stolen, and disappearing from the legitimate supply chain?
How can the rise in cargo theft be stopped?
The answer lies in robust, efficient and reliable ID and identity verification for logistics and freight businesses.
The domino effect - cargo theft leading to rising prices
When a product goes missing from the ship or truck it’s being transported by, the repercussions go beyond the immediate loss of goods.
Upon realizing that the levels of stock which left the warehouse in Point A are not what arrives at the store in Point B, companies faced with the cost of stolen merchandise might look to make small increases to prices in a bid to make up for the lost goods. This ultimately places the burden on the end-customer who is the furthest away from being responsible for the losses in the first place. Though this feels particularly unfair when we consider the already rising prices of goods and cost of living, many retailers have pointed to theft as a driver of increased costs.
To highlight the extent of the problem, the BSI Supply Chain Risk Insights Report for 2023 highlighted a 30% increase in supply chain theft, with food and beverage items being particularly targeted.
Groceries go missing. Those that don’t end up being sold for a premium.
It’s clear that mitigating cargo theft is far more than a corporate imperative – it has quickly become a critical societal concern.
Who is in the driving seat?
The key to addressing this complex challenge is to gain visibility of where the goods are going missing, and who is responsible.
To do so, identity verification emerges as a vital tool.
By implementing advanced ID verification processes, businesses can ascertain and authenticate the identities of drivers and personnel involved at every stage of logistics operations.
Prevention is undeniably more effective than recovery when it comes to combating theft in supply chains. By implementing robust ID verification processes, organizations operating global supply chains can proactively safeguard against significant product and financial losses. When drivers and other stakeholders in the supply chain are aware of stringent identity checks and the high risk of detection, the temptation to engage in theft diminishes significantly.
The role of AI
Modern technologies play a pivotal role in enhancing ID verification capabilities. Artificial intelligence (AI) algorithms can be leveraged to detect and flag fake IDs commonly used by fraudsters. These AI-driven systems analyze multiple data points to identify suspicious patterns or inconsistencies in the ID itself, providing a sophisticated layer of security against identity fraud.
In addition to AI-based verification, cross-checks with authoritative databases further enhance the accuracy and depth of identity verification. Integration with Department of Motor Vehicles (DMV) databases allows real-time validation of driver credentials, ensuring that only legitimate and authorized personnel are entrusted with the responsibility of transporting goods.
The adoption of stringent ID verification measures is not just about protecting businesses—it's about safeguarding consumers and society at large from the adverse impacts of escalating cargo theft. ID verification allows businesses to answer: who is this individual, and do they have a legitimate right to transport or have access to my goods?
Combating the rise in cargo and supply chain theft requires a multifaceted approach, with advanced ID verification technologies playing a pivotal role. By leveraging cutting-edge solutions in identity verification, businesses can proactively deter theft and protect both their business interests and those of end consumers. As the industry evolves, prioritizing prevention through effective ID verification measures will prove instrumental in safeguarding against the rising tide of cargo theft and its detrimental impacts on businesses and consumers alike.
