IMSecure

Savings through Security: Lower Costs can be Realized with Container Security Solutions.

Torry Shealy

December 10, 2008

            By increasing security measures, those involved in shipping containers in the supply chain could realize significant savings. Increases in productivity, faster transit time through ports, and reduced cargo theft all could be realized by increasing security standards in shipping. Using advanced devices to lock and track containers would be a major advance toward realizing these savings.

According to an A.T. Kearney report stated that integrating an integrated security device on shipping containers could save $1,200 per container, per transit through productivity gains.[1] These savings would be seen from increased efficiencies such as "reducing inventories and out-of-stocks, minimizing lead-time variance and increasing manufacturing uptime" can be achieved by automatically tracking containers.[2]

Another benefit is to move the container through the port and on to its destination without delay. Avoidance of non-invasive inspections could have an average savings of $300 per container, per transit while not having to undergo an invasive inspection could save as much as $1000 per container, per transit.[3] This is mainly due to the container being able to get out of the port faster. There has been proposed expansion of "Greenlanes" at ports in the US for those who uphold C-TPAT and CBP standards.

The International Cargo Security Council reported and estimated $25 billion in merchandise was stolen in the US each year.[4] The European Union estimates that 8.2 billion Euros worth of cargo was stolen off of trucks every year.[5] The total worldwide theft of cargo approaches $50 billion according to Freightwatch International Group.[6] These numbers are considered to be low since not all cargo thefts are reported. In addition, the American Association of Port Authorities estimated that there are $60 billion of in-direct costs that are associated with cargo theft. These include, insurance costs, investigative costs, re-order costs, administrative costs, paying claims, fraudulent refunds, loss of sales and loss of reputation.

Using effective security devices on the shipping containers that these items are transported in would save individual companies millions of dollars each. RFID, bolt, and cable seals will do nothing to stop a criminal from breaking into a container that has been stolen. GPS tracking technologies are showing some promise in tracing stolen containers but does nothing to deter the thieves. What is needed is a device which can integrate anywhere, anytime communications with a difficult to defeat locking mechanism along with interior sensors to monitor for six wall intrusion as well as other sensors that can monitor conditions in the container.