Robust warehouse physical security is essential to protect the supply chain from vulnerabilities and cargo theft, says Tim Purpura, Vice President of Global Sales & Marketing, Morse Watchmans.

Supply chain security

Warehouses and distribution centers involve daily inbound and outbound supply chain production and trucking transportation to prepare cargo and freight for their intended destinations.

Among vast buildings and trucking fleets lurk opportunistic insider and outsider thieves, seeking to pirate away cargo to profit from the dark web and the black market.

Criminals seize opportunities to turn stolen goods into cash, while warehouse and distribution providers and corporations struggle to make up for lost revenue.

When cargo and finished goods go missing before they reach consumers, profitability is at stake, which creates a downward spiral that affects businesses, the stock market and consumers who bear the brunt of inflation to make up for supply and demand losses.

Cargo theft on the rise

Cargo theft has been around since the origins of early trading around the world, which has evolved into current sophisticated supply chain logistics, but along with it have come more tech-savvy thieves and cargo theft rings.

Annual revenue loss due to cargo theft is shocking.

According to Overhaul’s US and Canada Annual Cargo Theft Report 2023: “Overhaul recorded a total of 1,183 cargo thefts throughout the US with an average loss of $586,917 each.

“These numbers represent a 9% increase in volume and a 67% increase in average value when compared to 2022.”

Whenever cargo is stationary in warehouses, or being loaded onto trucks, that is when thieves observe vulnerabilities and seize opportunities to steal.

According to a report by Verisk’s cargo risk management company, CargoNet: “in the last quarter of 2023, 766 thefts occurred with just over a third of them occurring in warehouses.”

Although there is not any single one cause of warehouse and cargo theft, the economy, inflation and a surge in demand for products, which precipitated from the effects of the pandemic, are contributing factors along with technological advances that allow criminals to infiltrate and hack computer systems.

According to Overhaul’s Whitepaper A Strategic Solution to Strategic Theft: “While the increase in a business’s cadence of marketing its products can be very profitable, it can also lead to taking shortcuts, becoming complacent, or being lackluster in reasonable compliance with good supply chain security practices.

“In other words, even if goods need to be moved more quickly, it shouldn’t be at the expense of safety and security.”

Security technology and cargo theft prevention

Proactively reducing and preventing cargo theft in warehouses requires a combination of security solutions including a master security plan and loss prevention policies and procedures.

Loss prevention policies and procedures must include strategies for insider and outsider theft as well as regular training for employees.

Along with this, layers of security including asset management, access control, video surveillance, cybersecurity and warehouse management technology help to create efficiencies that work together to eliminate vulnerabilities.

Additionally, having strict “zero-tolerance” security policies help to minimize insider employee threats.

The role of electronic key control for warehouses

One important layer of security technology that significantly improves access control and asset management is electronic key control.

Warehouses and distribution centers have hundreds of keys to warehouse doors, offices, inventory storage rooms, overhead doors, mechanical rooms and fleet vehicles that are often randomly placed in desk drawers or carelessly left in vehicle ignitions.

Every warehouse portal and door, including rooftop doors and all perimeter doors, need to be secured along with the keys that belong to them with an accountability tracking system to prevent cargo theft.

When keys go missing, this can significantly delay logistics operations and all too often, keys can easily slip into the hands of individuals who plan to wreak havoc by pilfering or stealing inventory stock or fleet vehicles.

Electronic key control systems manage and track who accesses each key, reducing the chances of unauthorized individuals obtaining keys to access inventory or fleet vehicles for nefarious reasons.

A key control system records every key removal and return along with who removed it and when, what time, and what day of the week.

Besides reducing incidents of cargo theft, reducing incidents of lost keys saves warehouse and distribution centers thousands of dollars in re-keying costs.

Authorized users access the key control system by entering their credentials through a PIN code and/or biometrics.

The keys individual users are authorized to remove light up and are available for immediate use.

Keys that are late being returned are tracked and alerts are sent to key control administrators so immediate action can be taken to ensure that the missing key is returned by the individual who is using it.

At the end of a work shift, all keys are readily available for individual use for the next shift.

This provides accountability for every employee because every key transaction is recorded with information as to who used the key and who returned it and where and when.

If there are multiple networked key control cabinets in a warehouse, keys can be returned to any location, where they are always secured and locked and available for access by authorized individuals only.

Key control allows warehouse security managers to download audit trail reports that help with pinpointing the areas of the warehouse associated with suspected theft activity, along with the names of warehouse personnel responsible for the keys to those areas.

When key control is paired and integrated with video surveillance and access control systems, the layered security technology approach creates greater security efficiencies and data to minimize security theft incidents.

Multi-factor authentication

Extra security and protection are always needed for valuable items around the clock, such as fine jewelry, electronics and sensitive areas of the building with restricted access, such as safe rooms.

Key control systems provide this extra security through multi-factor authentication programming capability, which requires more than one authorized key control administrator to enter credentials to obtain keys.

This is also ideal for computer server room access, so computer hardware remains locked up and locked away.

Protecting computer room hardware is just as important as the data itself.

When thieves make off with the hardware, the valuable inventory management software and its data can be hacked and tampered with, so that stock and inventory numbers do not match up or are adjusted to account for stolen items.

Besides keys, key control systems can be customized with asset management lockers, which adds another layer of security to securely store personal assets such as wallets, laptops, tablets, mobile phones, hand-held radios and even the proximity cards for access control systems.

A practical physical security solution

Electronic key control systems secure and manage one of the earliest security solutions in this world – keys.

For centuries keys protected property, people and goods, and still offer security and protection around the world today.

While no longer carved from wood or bone or ivory, metal mechanical keys are assets that need to be kept out of the wrong hands in warehouses.

Key control is essential to add to the security technology stack, which also easily integrates with other security technology and business systems to provide more security data in real-time.

With today’s sophisticated warehouse and cargo theft rings, adding key control security technology provides another reliable method of protecting warehouse assets with the aim of reducing incidents of theft.

This article was originally published in the November edition of Security Journal Americas. To read your FREE digital edition, click here.