Technology vs. Cargo Crime

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2 Technology vs. Cargo Crime Taya Tuggle, Air & Ground World Transport Gary DelVeccio, Logistics Security Consulting LLC Sergeant Carlos Rosario, Miami-Dade Police Depart.

3 Losses in the Freight Environment Missing Goods Time / Productivity Claims Damage

4 Technology vs. Cargo Crime 1997 TAPA Founded in USA 1999 TAPA Extended to EMEA 1999 TAPA Extended to APAC Shippers 3PL s Brokers Carriers Insurers Law Enforcement Manufacturers Freight Forwarders TAPA TODAY: Members of the World s Leading Consumer Product Brands as well as their Logistics and Transport Providers with combined annual sales of over 900 Billion USD, as well as Law Enforcement, Insurers, and Other Trade Association Members.

5 TAPA Standards Today s TAPA Standards Freight Security Requirements (FSR 2014) Truck Security Requirements (TSR 2014) Parking Standards (Europe only) Air Cargo Standards (TACSS EMEA and ASIA)

6 1. Perimeter Security TAPA s Freight Security Requirement 5. Security Procedures 2. Access Control Office Areas 6. Standard Truck Security 3. Access Control - Facility Dock/Warehouse 7. Pre-alerts 4. Security Systems 8. Enhanced Security Requirements

7 Technology vs. Cargo Crime The Current Environment (2013) 731 reported incidents 80% In-Transit Estimated value $93,000, Running average $120, per loss California, Texas, Florida, Georgia consistent Hot Spots 95% of incidents are believed to be preventable Stats Sourced: Supply Chain Information Sharing and Analysis Center s (SC-ISAC)

8 Technology vs. Cargo Crime Objective Proactively secure high value/high theft shipments from origin to destination. Combine layers of emerging track trace and communication technology with evolving Logistics Security Protocol and Practices. Evolution into predictable pattern of acceptable shipment activity and route performance

9 Robust exception base application Technology vs. Cargo Crime Redundancy GPS GSM/AGPS Sensors Covert- CDMA/GSM GPS CDMA SMS Two Way

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11 M2M In The Supply Chain Craig Montgomery SVP of Marketing, ORBCOMM Reducing costs, increasing revenue and improving operations.

12 Factoid 1 The total logistics costs associated with delivering a $3.60 box of cereal from the field to the consumer s table is about $.37 in the US. The net retail profit is about $ Council of supply chain management professionals.

13 Factoid 2 US expenditures on logistics are larger than the national GDP of all but 12 countries. (For example, US logistics expenditures are larger than the GDP of Mexico.) CSCMP s 21st Annual State of Logistics Report.

14 Factoid 3 Supply chain glitches torpedo shareholder value. After adjusting for industry and market movements, the total shareholder value loss associated with a glitch can be as high as 25% Georgia Tech Study

15 Factoid 4 Companies employing sophisticated supply chain methods enjoyed 12 times greater profit than companies with unsophisticated methods Bain & Company

16 Factoid 5 In 1980, logistics represented 17.9% of US GDP. Today, it is 7.7%. By comparison, estimated logistics costs represent 15 to16% of China s GDP and 11 to 13% of India s GDP Council of supply chain management professionals.

17 Factoid Conclusions The supply chain is economically very important. India s GPD is $1.8 Trillion (USD Dollars). A parity improvement to the U.S. yields $79B in cost reductions (-35%). It impacts company valuations significantly. Technology helps drive that value and efficiency. M2M is a key to unlocking this value.

18 Things Have Changed Yesterday s Supply Chain Today s Supply Chain Customers Customers Retail Warehouse Retailer Retailer Wholesale Distributor Retail Distributor Manufacturing Suppliers Sub- Contracted MFG Suppliers MFG

19 How Does M2M Impact The Supply Chain? Source: Accenture Report: Wireless M2M in the Supply Chain

20 Opportunities to Unlock Value with M2M Fleet tracking Inventory-condition monitoring Inventory-level monitoring Tagging of high-value assets and inventory Event-based monitoring of driver behavior Field force management Preventive maintenance Smart warehouses/supply chain facilities Source: Accenture Report: Wireless M2M in the Supply Chain

21 Many Touch Points Temperature Control Violations Damaged Goods Bill of Lading Integration Higher Insurance Costs Automated Delivery Information Online Lower Customer Care Costs Lower Inventory Costs Goefence Alerts (road / rail / water) JIT Manufacturing Planning

22 Port of Long Beach Real Life Example of Impact Supported heavily by Interstate 405, where daily traffic is 374,000 cars between exit 21 and 22 in 2008 alone, making it the highest count in the nation. 1 The city of Long Beach is spending $1.5B for a new middle shipping harbor, which will only increase impacts on traffic and associated costs. The use of container tracking could allow for: Less effusive container trips inland of tractor trailers Better inbound / outbound traffic planning by the Port Lower road maintenance costs for LA County as a whole Lower taxes on small business operations for Cal Trans projects 1. Most Travelled Urban Highways Average Annual Daily Traffic". Fhwa.dot.gov

23 Summary The game has changed, and it won t turn back. Power has shifted to the customer. Margins are being compressed in most sectors. Even minor disruptions have significant impact on the supply chain. Companies must adopt M2M to drive greater visibility across the supply chain and its appendages. Businesses must transform their approach to how they solve problems by leveraging info across the supply chain ecosystem. These issues span from tracking, monitoring and reporting across global geographies which requires: Hardware solutions that are durable. Communications platforms that are flexible (Cellular, Satellite). Software applications that are robust (SaaS, XML, Integrated).

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