5 steps to stop cargo loss

July 12, 2005
Thieves are like lions watching a herd of gazelles, looking for signs of weakness, says Kirk Rider, senior marine loss control consultant for Fireman's

Thieves are like lions watching a herd of gazelles, looking for signs of weakness, says Kirk Rider, senior marine loss control consultant for Fireman's Fund Insurance Co.

"Thieves will take the path of least resistance," says Rider. They'll watch for signs of poor security procedures or look at the condition of the yard for signs of lax procedures in selecting a potential target. Sometimes they'll put a person inside as a temporary or seasonal worker to size up the vulnerability of a target, or they'll simply offer an employee money for information.

If thieves want your goods badly enough, you won't stop them. George Gazey, also a loss control consultant at Fireman's Fund, cites the example of a group nicknamed the "hole in the wall gang" who simply broke through a wall and carted off the goods from an unattended warehouse.

To reduce crimes of opportunity and to cause all but the most determined thief to look elsewhere for an easy score, Rider and Gazey offer these five steps you should take to protect your warehouse:

1. Employee background checks are a good start. Many companies don't conduct even simple background checks on warehouse employees. Whether companies view the cost as disproportionate to the wage level or they think there is no need for an extensive background check on someone who is only handling cartons, pallets and boxes, most thefts involve some type of internal involvement. Background checks should be conducted on all warehouse employees by a reliable and competent third party, Rider and Gazey suggest. The investigator will check criminal history, employment and residence history.

While many employers feel that a check for felonies is sufficient, in many cases, someone arrested for a felony crime will have the charges reduced to a misdemeanor. The ideal process is to base the decision on the crime itself.

Ensure that any temporary employment agency that supplies warehouse workers is also conducting thorough background checks.

2. Be visible on the dock. Most shipping and receiving operations don't have a management person or "dock master" on the dock checking that all inbound and outbound shipments are properly documented, counted and examined for condition. Another role for this person is to ensure that the shipment matches the accompanying documents. Often, this process is conducted later in the day or, in some cases, several days later. At that point, it's too late to reconcile any discrepancy.

Many facilities will load trailers the night before they are scheduled to be moved. The trailer will be parked in the yard overnight, leaving the trailer and its contents vulnerable to theft. Trailers should not be loaded until the day of departure, or, once loaded and processed, they should immediately depart for their destination.

High-value commodities should have special handling procedures in place. Since these shipments are more susceptible to theft loss, special handling procedures and segregated storage locations should be used.

Access to shipping and receiving information and documentation is another concern. Where does a thief obtain information on what shipments are arriving or departing? How do they know when a shipment is departing and to what destination? Supervision and accountability, therefore, applies not only to the goods but also to the information about the shipments themselves.

3. Access and intrusion detection take on significant importance. Checking identity of drivers entering and leaving the facility is only part of the solution. Matching drivers, documents and loads and restricting access while they are on the premises helps during operating hours, but many warehouses don't have 24-hour security protection and have only minimal alarm systems to cover the facility outside operating hours.

Older warehouses (and some newer ones) rely on alarm systems that include a "clapper bell" mounted to the outside of the building or individual door alarms with no central monitoring capability. There are no glassbreakage alarms, motion detectors or laseractivated alarms. And, where these devices are present, their central monitoring station may not have cellular or radio backup systems in place. Even where systems are in place, testing once a year all but negates the value of the system. Gazey points to site visits where devices such as motion detectors were in non-working order or had come loose in their mounts and were no longer pointing at the area they were supposed to monitor. Judging by the dust on one such unit, Gazey says, it had been that way for a couple of years. In addition to testing the systems, they should be examined regularly by qualified technicians.

The various types of systems should be used in combination. Door alarms using two contacts which, when separated, trigger an alarm are of little use if the thieves cut through the center part of a loading dock door or, as in the case of the "hole in the wall gang," they use a piece of heavy equipment to knock a hole in a side wall of the warehouse. Door alarms — in combination with motion sensors, glass break sensors and vibration sensors — assist in detecting this type of activity.

Central-station alarm monitoring provides the best coverage, but all systems and the companies that install them should meet Underwriters Laboratories (UL) standards. Then the systems should be tested regularly by a competent third party, and the tests and their results should be documented along with any discrepancies and their remedy.

4. Closed circuit television systems (CCTV) must be adequate to provide sufficient coverage and a clear picture. Recording equipment connected to the CCTV system must be in a secure area.

A viable CCTV system should be linked to a centralized security system where the alarm activation components also activate the cameras. Cameras should be located in dock areas, final packaging areas and crossdock operations. While overt cameras will deter crimes of opportunity, these should be combined with covert cameras whose location is known only to management. Surveillance tapes should be retained for 30 to 45 days.

In many cases, single or even multiple types of systems can be defeated. One break-in occurred undetected when thieves cut through a dock door without disturbing the contact switches. A motion detector that should have been triggered by the activity was disabled by someone leaving a storage closet door open, blocking the motion detector's "view" of the area. Whether or not this was intentional refers back to point number one (employee background checks). It also speaks to the need to combine alarm systems and CCTV monitoring.

5. Work with law enforcement, conducting regular tours and visits by law enforcement and fire protection agencies to familiarize them with your operations and security procedures. This will also provide opportunities to garner suggestions on how to improve your systems and procedures.

Another area that is increasingly important in dealing with local law enforcement is response. Many agencies charge for response to false alarms or require verification before they respond. The better they understand the facility systems, layout and operations, the more likely they are to respond in a timely manner.

Responding to an alarm to provide verification to law enforcement can consume valuable time. It can also be dangerous for a warehouse manager who comes onto the facility and surprises the thieves. Managers should be trained in how to respond to alarms.

Training in security procedures is important for all employees. A thorough policy that is merely documented and filed away is not effective. Security procedures should be part of employee training, and that training should be documented and performance measured. In the end, the best systems will only offer a deterrent if procedures are a part of daily practice.

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