Unless you ship jewelry or pharmaceuticals, package security probably doesn’t rank too high on your list of worries. Maybe once in a while a packer gets away with a tee shirt bound for Tuscaloosa, or a driver takes home a set of towels embroidered with someone else’s monogram, but chances are you don’t lose too much sleep over it.
Even when the costs of pilfering are in the thousands, it’s hard for mail order distribution officials to stay focused on the issue for long. “The volumes are such that they really don’t care,” says Erik Hoffer, the president of CGM Security Solutions, a Somerset, NJ-based vendor and inventor of secure tapes and seals.
Hoffer says he often sells his products to a distributor that is having theft problems one year only to have the firm cancel its orders the following year after the number of thefts goes down. Why? “They always say, well, we don’t have a theft problem,” he laments.
One reason for the lack of concern, says Hoffer, is that many firms see shipping as a profit center. “As soon as you cut into that profitability, they get antsy,” he explains. As a result, although transportation-related theft sets the economy back $25 billion every year, Hoffer says that the direct-to-consumer retail world appears on the whole to be surprisingly uninterested in the problem.
However, here at the O+F Department of Package Security, we are shocked and dismayed by this kind of complacency. As a result, we are raising the package security alert level to Code Ultramarine. When an ultramarine alert is announced, fulfillment professionals are directed to read any advice on packaging security they happen to have in their hand, to swear that they will take the issue more seriously in the future, and as evidence of their seriousness, to write generous checks to editors of magazines that print such public service articles.
Further, until the end of a Code Ultramarine condition, distribution officers will do well to consider the following advice:
Watch your employees It’s a harsh observation to make, but theft often begins at home. No matter how trustworthy you think your employees are, it never hurts to invest in monitoring systems for your facility. David Gealy, a systems consultant at Forte Industries, a supply chain consulting and systems integration firm based in Mason, OH, says that he is seeing more and more distribution centers equipped with X-ray machines, guards at the door, and swipe-card entry systems. If you rely heavily on temporary help, he says, you may want to consider such restrictions. Obviously, if your distribution facility stocks valuable merchandise such as jewelry, antiques, or high-end electronics, you would be well advised to install security cages as well as a state-of-the-art security system.
In day-to-day warehouse operations, there’s a lot you can do to boost security, says Sam Braden, distribution center manager for Tazo Tea Company (a subsidiary of Starbucks Corp.) in Portland, OR. In its workplace, for example, Tazo has put in place several protective measures since the terrorist attacks of Sept. 11, 2001. Employees can access the building only with a photo badge, and card readers are installed at all entry points. Because Tazo imports a variety of teas from different countries, trailer and container seals are reinforced and monitored constantly, with questionable shipments subject to a rigorous inspection protocol. The facility holds monthly safety meetings to review security measures and discuss any suspicious events or employee behavior. As another precaution, mandatory background checks are conducted on all agency and company workers.
Buy the right kind of tape to reduce pilfering. But just what kind is the right kind? The answer depends on whom you ask. Vendors of high-tech security tapes claim that theirs is the best. Mike Messmer, vice president and general manager of Novavision, a Bowling Green, OH vendor of sophisticated security tapes and labels, says that his firm’s tapes have a number of advantages. Some can leave a message if the tape is pulled off, such as “This Box Has Been Opened,” and include small lines that are difficult to re-match if someone tries to close the box after cutting the tape. Another kind of tape Novavision sells, holographic silver polyester tape, comes with a unique serial number every nine inches, and a printed hologram on the surface that can be customized.
Of course, if the problem is more serious than simple pilfering, other theft-averting materials can be added to the box as well. One possibility: tiny (1- to 3-micron) phosphers printed on a label or anywhere on the box that can be seen only with the help of a special laser. These materials have been developed by Stardust Technologies of Bellevue, WA. Using these phosphers or “taggents” is better than applying holograms, says Michael Preininger, Stardust’s director of marketing, because they’re not overt. The costs of using the system can be fairly modest: A clothing manufacturer, for instance, could put Stardust taggents on its tags for 20 cents per thousand.
But opinion is far from unanimous about paper versus plastic. Bob Collins, product manager at Better Packaging in Shelton, CT, touts the virtues of the old-fashioned paper tape his firm has sold for 80 years. His reasoning: Paper tape bonds with corrugated boxes, so there’s no way to open the box and shut it again surreptitiously. Plastic, however, does not. The company has even hired outside testing firms such as SGS and Underwriters Laboratories Inc. to conduct studies that demonstrate the advantages of water-activated tape. The studies revealed that water-based tape is 96% more effective than plastic tape as a barrier to would-be sneak-thieves. One sign that they may be on to something: Collins counts the FBI among customers who use Better Packaging’s water-based tape dispensers.
Try security seals If your products are highly vulnerable to tampering, you might want to look into physical barriers such as seals and “smart” containers outfitted with RFID tags. Before the 2001 terrorist attacks, Sidney Frank Importing Company Inc., a food importer and wine supplier based in New Rochelle, NY, was accustomed to sealing only a small percentage of the shipments that it sent to domestic wholesale distributors. Since the attacks, however, the company has made it a practice to seal all outbound shipments. Affixing security seals “is more prevalent than it used to be,” says SFIC director of logistics Steve Davies. “For us, it’s both a security measure and a claims measure, because our truckers know exactly what’s in the container.”
Before you go out and buy seals, it’s important to understand what they can and cannot do for you, advises Christian Corrado, vice president of customer support at APL Logistics. “Seals vary in quality and technology, from wire to cable locks and e-seals,” he says. It is difficult to monitor physical seals, Corrado adds, because warehouse and other personnel often have legitimate reasons for breaking them. Electronic seals pose their own problems, such as expense, bandwidth limitations, high risk of obsolescence, and vulnerability (in a recent test, 200 electronic seals were breached in less than three minutes each).
Similarly, a smart container presents challenges. It can be tracked, and its contents ascertained (and presumably protected), but its use raises several questions: What should be monitored (opening, all six sides, weight, radiation)? Where should it be monitored — at its origin or destination? Who pays for its purchase and maintenance?
Pack with the route in mind Of course, packages can sometimes come apart even without outside help. When air-filled dunnage came on the market about ten years ago, packers sometimes didn’t consider the fact that cushions will expand if the goods they are protecting are shipped to a higher altitude or warmer climate, according to Alfred H. McKinlay, a packaging consultant based near Albany, NY. “You can blow out the size of the box if you put too much air in it,” he says.
Another common mistake is assuming that the weight-certification stamp found at the bottom of most corrugated boxes will work in every circumstance. McKinlay says that these certification stamps were developed by the railroads about 100 years ago and have never changed. In fact, a committee he chairs for the Institute for Packaging Professionals concluded that the real weight limit is generally about half of whatever is noted on the box. The reason is that handling of small-parcel shipments by the big parcel services is much rougher than used to be the case for railroad or less-than-truck-load shipments. McKinlay also notes that capacity may be even further compromised if the boxes are old or kept in conditions of high humidity.
Local conditions can make a tremendous difference to box strength — as Kevin Howard, senior packaging engineer of the Hewlett-Packard Company’s printer division in Vancouver, WA, learned first-hand.
A few years ago, HP sent Howard out to India to figure out why an unusual number of printers were arriving damaged. Howard found that HP’s original boxes weren’t strong enough for the market. Given high humidity, temperatures that often ranged between 95 and 115 degrees Fahrenheit, hand-stacking of inventory, “dirt and dust like you wouldn’t believe,” and no freeways, he says, he realized that they had to come up with a stronger alternative. By increasing the varnish on the boxes, enhancing the boxes’ compressive strength, reinforcing the strength of the tape, and redesigning the box itself to make it stronger when stacked horizontally rather than vertically — the typical configuration hand-stackers choose — he says he was able to reduce package damage significantly.
Form a powerful lobby Some problems aren’t easily overcome. William Augello, a law professor at the University of Arizona Law School in Tucson and long-time specialist in transportation law, says he believes that theft is probably even more prevalent now than it used to be when he began his practice 52 years ago.
Small parcel shippers face a number of insurance dilemmas when they use a major parcel carrier, according to Augello. “If you declare a high value, you’re a target,” he says. “If you don’t declare a high value, you’re going to get a hundred dollars. So what do you do?”
To make matters worse, if the shipper does choose to insure, the carriers’ insurance typically won’t cover the most likely scenarios — theft or damage. Employee theft is excluded, Augello says, and if something is damaged, the services typically respond to damage claims by saying that the package wasn’t sufficiently protected; after all, if it were, then it wouldn’t be damaged.
“[Trucking] deregulation was supposed to generate more competition among carriers so that the shippers would get a fairer shake,” he says. “When it comes to liability issues, the reverse has happened, because they all follow one another’s lead.”
Why do shippers get taken advantage of? “The reason is that shippers do not have a lobby. Truckers have a lobby, railroads have a lobby. But shippers, on the other hand, are a little slow. They have their own individual lobbying campaigns where they pursue their own interests, but there is not a shipper lobby that bands together to move for improvements in liability.”
Bennett Voyles is.a business and financial writer based in New York City. He can be reached at firstname.lastname@example.org.