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Cargo Theft: An Ongoing Threat to Life Science Companies

There are over 2 million trucks on the road across the United States.  Over 63% of all freight is shipped in trailers.  New highly sophisticated organizations have targeted the poorly guarded warehouses or truckers and some of the most highly vulnerable to cargo theft are the Medical Device and PhRMA companies.

According to FreightWatch International, an Austin-based cargo security firm, there were reports of $425 million in stolen cargo in the U.S. last year alone, and some FBI agents believe thieves could be making off with anywhere from $10 to $30 billion a year.

To help organize against this criminal activity, the industry organized the Pharmaceutical Cargo Security Coalition (PCSC) to help companies who make regular shipments  with best practices and take the necessary precautions to secure their valuable products and ensure there isn't a threat to our nation’s drug and device supply chains.

Recently I helped a client secure the proper insurance coverages  to meet the requirements needed to win a large government contract to store a highly sensitive serum.  A major reason for their selection and our ability to successfully place their insurance needs was due to their excellent facility management and security operations at their warehouse. 

Companies in the supply chain business who regularly win the large PhRMA or government contracts must be able to demonstrate best in class procedures.

Many Life Science entrepreneurs, who have fought through the clinical trial and FDA process to grow their business to the point of product distribution, may not realize cargo theft is an issue.  Or they may believe that simply outsourcing it alone will take care of such threats. Raising the awareness of this issue along with good risk management efforts can greatly help mitigate against this rising industry problem.

The following are some preventative risk management best practices examples for the warehouse/logistics firms provided by Chuck Forsaith, Director of Supply Chain Security for Purdue Pharma Technologies Inc., and Chairman of the PCSC:

• Check both your security alarm and camera surveillance systems to ensure they are all working properly and make sure cameras all have clear fields of view.
• Ensure your back-up cellular alarm system is fully functional
• Perform outdoor perimeter checks, look at fencing, all your windows, all your doors, as well as your roofs to ensure they are properly secured
• Make sure all of your exterior lighting is functional – perform a full check one night this week and replace/repair any lighting units that are defective before the weekend
• Don’t make it easier for potential burglars by leaving anything “out” outdoors (or within a warehouse) that they could use to help facilitate a crime, such as (inside) keys to forklifts
• Today - make contact with every employee on that call list and make sure they respond immediately to any calls they receive from either your alarm monitoring contractor or the police

If you have any questions you’d like to discuss, don’t hesitate to contact me. 
 

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