LOJACK SUPPLY CHAIN INTEGRITY. Solving the Commercial On-Highway Theft Problem for Cargo, Trucks and Trailers

Transcription

1 LOJACK SUPPLY CHAIN INTEGRITY Solving the Commercial On-Highway Theft Problem for Cargo, Trucks and Trailers

2 TABLE OF CONTENTS OVERVIEW... 3 Securing the Supply Chain: Evolving Solutions to Meet Today s Needs... Uniquely Qualified to Lead the Emerging Commercial On-Highway Security Market... LoJack SCI InTransit A Comprehensive, Innovative Solution... The Right Technology for the Right Application... Covert protection and tracking... Real-time surveillance and web-based monitoring... Integration with law enforcement for dispatch and recovery... The Wisdom of Sharing Intelligence... Support... Standing Apart from the Crowd & Contact Information

3 OVERVIEW A recent survey by Chubb Group Insurance Companies revealed that broken links in the supply chain are one of the top three threats to business operations and one of the most significant breaks in the supply chain is theft. In the cargo security market, it is estimated that $10 billion $30 billion in merchandise alone is stolen from cargo ships, trucks, ports, railroads and highways annually in the U.S. And, according to the Transported Asset Protection Association (TAPA), 85 percent of all business security losses are attributed to either the theft or loss of product in transit. These facts were echoed in the first annual Cargo Theft Study* conducted by LoJack Supply Chain Integrity (LoJack SCI). The study, which was released in April 2009, revealed that cargo theft is a serious, ongoing problem that is extremely profitable for professional thieves and very costly for organizations throughout the supply chain. According to the study, of the 353 incidents reported in 2008, 299 of them involved cargo According to LoJack theft on our nation s highways. Of the 353 reported incidents, 145 provided a SCI s 2008 Cargo dollar figure. The total reported losses amounted to nearly $51 million dollars Theft Study, companies ($50,821,224) or more than $350,000 per incident. reported an average Often, stealing cargo is only one component of theft. The trucks and loss of $350,000 trailers transporting cargo are also vulnerable. For example, in one recent per incident. incident, a tractor-trailer containing a load of 12 pallets of Owens Corning shingles bound for Houston was hijacked in Dallas. The tractor, trailer and cargo all were stolen. According to industry officials, the combination of truck and cargo theft is responsible for more than $10 billion in business losses each year. Clearly, adding truck theft losses to that of merchandise makes the growing problem of Commercial On- Highway Security that much greater. Add in the theft of trailers and the numbers climb even higher. Although there is no hard data on overall recoveries, anecdotal information indicates that the percentage of recovered stolen property is very low. With so much valuable property at risk and at stake in the Commercial On-Highway Market, ** it is becoming an increasing priority for businesses to find new, effective measures to ensure the security of cargo, trucks and trailers and even more important to recover those assets in the event that theft occurs. Securing the Supply Chain: Evolving Solutions to Meet Today s Needs Back in the days when technology wasn t available to provide immediate access to information, supply chain security was limited to physical barriers like, locks, seals, fences and guard gates, uniformed guards at entrances and limited 3

4 surveillance equipment, such as video cameras. These measures were set up to protect production, warehouse, distribution and transportation facilities. They may have been effective while cargoes were confined, but once the assets left the protected areas, they became vulnerable to something as simple as a pair of bolt cutters, but specifically to organized thieves who found cargo theft a low risk, high reward crime. As mobile communications, technology and web-based solutions became more prevalent in the supply chain, many companies made investments in fleet management systems in an attempt to protect their fleets and cargoes. However, most fleet management systems provided GPS-based features that focused on operations, maintenance and maximizing equipment utilization but did not protect cargoes from theft. Some solutions did provide the ability to access real-time location of equipment within a limited geographic range. While this type of solution may help to run and maintain an efficient fleet, it did not and still does not adequately address the problem of theft protection. And, the theft problem continues to grow each year. From 2007 to 2008, claims at the Chubb Group*** showed that incidents of on-highway theft increased 40 percent, reinforcing the fact that fleet management and fleet protection are two separate efforts that require different solutions. In today s world, with increasing incidents of theft, the ongoing threat of terror and seemingly more frequent natural disasters, there is an increasingly critical need for solutions that truly protect the integrity of the supply chain solutions that go beyond fleet management and even fleet protection, to include not only fleet, but cargo recovery as well. LoJack SCI s primary mission is to deliver powerful, effective solutions that address the needs of businesses operating in today s vulnerable supply chain, providing valuable information, resources, protection and recovery. Uniquely Qualified to Lead the Emerging Commercial On-Highway Security Market Founded in 2004 as Supply Chain Integrity, today LoJack Supply Chain Integrity is the only company that provides a truly integrated solution for supply chain protection from covert tracking, monitoring and recovery to investigation and prevention. In 2006, LoJack Corporation (NASDAQ:LOJN), the premier worldwide provider of tracking and recovery systems, made a strategic investment in Supply Chain Integrity and two years later became a majority shareholder. This investment brought LoJack s resources, recovery expertise, trusted brand and especially important, its law enforcement relationships, to this innovative, emerging company creating LoJack SCI. Today, LoJack SCI s flagship solution, LoJack SCI InTransit, has emerged as a powerful result of the union of the two companies. 4

5 LoJack SCI InTransit A Comprehensive, Innovative Solution LoJack SCI InTransit is a comprehensive, innovative solution for the emerging Commercial On-Highway Security Market that provides the technology, intelligence and support needed to create a visible, secure and reliable supply chain operation. The Right Technology for the Right Application: LoJack SCI InTransit is a multi-faceted solution that integrates the right technology, whether it s GPS, Assisted GPS, Cellular (CDMA and GSM) and integration with Radio Frequency, into the right application to deliver the most advanced features available for: Covert protection and tracking Real-time surveillance and web-based monitoring Integration with law enforcement for dispatch and recovery GPS CELLULAR RADIO Covert Protection and Tracking Not only does LoJack InTransit integrate the right technology into the right application, it leverages the LoJack Stolen Vehicle Recovery System, which adds an unprecedented layer of protection for trucks and trailers. Since most theft occurs while the driver is out of the truck at an unsecured location, having a tracking device hidden in the cargo as well as on the truck and trailer, gives the driver the freedom to stop at a rest area or truck stop knowing that his entire rig is protected. It s like having your own personal covert surveillance team to keep watch on your cargo and tractor-trailer without incurring the expense that type of solution requires. For cargo, the state-of-theart tracking technology that supports two tracking platforms (CDMA and GSM) with motion sensor and Radio Frequency integration is hidden within the cargo. The flagship device is small enough to be easily concealed, robust enough to help recover your cargo if stolen. Battery performance is optimized through our exclusive device management software, which enables the most efficient use of device and battery life for the entire logistics cycle. LoJack InTransit can customize the appearance of the unit 5

6 to blend in with cargo making the device that much more difficult to detect. Coverage is currently available in the United States, Canada and Mexico. For trucks, the LoJack Stolen Vehicle Recovery System uses patented Radio Frequency-based technology that has a special FCC-allocated frequency and operates on a 12V or 24V power source. It contains an internal backup battery and can be installed on tractor-trailers, straight trucks box trucks, vans, service trucks and commercial auto fleets. For trailers, there is a covert LoJack device specifically designed for untethered trailers that is self-contained with a longlife battery. No external power source is required and it can be installed on approved trailer models, including box trailers, flatbed trailers, lowboy trailers and dump trailers. There is a special device available for refrigerated trailer units. Protection and tracking entails far more than simply installing covert devices on the cargo, truck and trailer. What distinguishes LoJack SCI from the competition is its experience and expertise with technology solutions for realtime surveillance and web-based monitoring. Real-Time Surveillance and Web-based Monitoring LoJack SCI s monitoring software is the most feature-rich and adaptable mobile asset monitoring application available. LoJack SCI developers customize its applications to quickly, accurately, and cost-effectively fulfill the unique needs of customers. The intuitive web-based interface also enables customers to tailor tracking tools to match their precise requirements, maintain constant surveillance and control fast-developing situations. The monitoring application uses Microsoft Virtual Earth, which provides a number of views of the cargo while in transit including map and aerial satellite views to know where the cargo is at all times. The software enables a user to see where a truck has stopped and also provides a view of the surrounding terrain. There are three different types of virtual fences available for surveillance and monitoring: Geo Fence can be used to specify a High Risk Zone in locations known to be dangerous. When a truck enters the zone, the frequency of reports 6

7 generated can be increased and text or alerts can be sent indicating the time entering the zone and the time departing it. Route Fence indicates the approved route for the load to travel. Text or alerts can be sent indicating entry to and exit from the Route Fence, and frequency of reports can be increased if the truck bearing the cargo leaves the fence. Location Fence can show the origin, destination and Safe Zone, i.e.: secured yard for the cargo. Text or alerts can be sent indicating the cargo is leaving its origin, entering and leaving the Safe Zone and arriving at its destination. Other alerts are also available that monitor the status and condition of cargo in transit, including Stationary, Distance to Destination and Arrival. Customers may have their own monitoring personnel or may use the LoJack SCI Monitoring Center, which provides advanced monitoring services. The Center is staffed by highly skilled professionals and is available 24/7/365 to provide world-class monitoring and device management support. For example, the leading provider of less-than and full-truckload services is respected and trusted by many shippers, including global airlines and freight forwarders to transport their goods expeditiously and safely between California and Florida. This transportation company provides a guaranteed 56-Hour Turnaround Commitment to its customers for the delivery of their goods. To ensure the guarantee delivery, the company utilizes the resources of the LoJack SCI Monitoring Center for constant surveillance of its trucks, evaluating all en route circumstances related to their defined security protocols and offers logistical adjustments as necessary to make certain it is able to fulfill its turnaround promise and hence retain its leadership position. The LoJack SCI Monitoring Center also is the focal point for responding, validating and dispatching the appropriate law enforcement or investigative agencies based on customers established protocols. Integration with Law Enforcement for Dispatch and Recovery A Key Differentiator: LoJack SCI is the only company in the emerging Commercial On-Highway Security Market that has the benefit of LoJack Corporation s unique and longstanding relationship with law enforcement agencies throughout the U.S. Plus, LoJack SCI has developed its own extensive multi-agency law enforcement database and recovery network that complements LoJack s existing relationships and includes cargo task forces, state and local law enforcement agencies and private investigators, as well as LoJack law enforcement liaisons. The combination of these two resources creates a formidable asset that no other company can duplicate. 7

8 For reported cargo theft: as soon as LoJack SCI receives a theft alert pertaining to cargo or a disruption in the supply chain, a specialist in the Monitoring Center notifies an appropriate department in its network of law enforcement agencies to handle the process of tracking and recovery. For reported truck or trailer theft: to expedite activation and tracking of a truck or trailer that has been reported stolen, the LoJack Stolen Vehicle Recovery System s software and databases are directly integrated with each state s crime computers. Police enter the report and the identification number is matched to the LoJack System registration number. After the match, the LoJack System is activated by police, which causes the small, hidden radio transceiver in the truck or trailer to emit a silent, continuous Radio Frequency signal. LoJack s Police Tracking Computers (PTCs) are installed in law enforcement vehicles, helicopters and fixed-wing aircraft to optimize tracking and recovery. Through the PTCs, the stolen asset communicates its whereabouts to authorities in real-time via the signal that is emitted from the hidden transceiver. This vehicle-to-vehicle communication delivers unprecedented precision in last mile tracking, which is optimal for recovery. Plus, LoJack has a distinctive staff of law enforcement liaisons, all former police officers with a specialization in vehicle theft prevention that work directly with LoJack SCI and law enforcement agencies in the fight against theft. Many law enforcement professionals acknowledge this as the optimal method for the recovery of trucks, trailers, and now, cargo. Recently, a well-known cosmetics company placed two LoJack SCI InTransit tracking devices in its 19-pallet shipment that was being transported from Chicago to Miami. The cargo, valued at more than $150,000, was stolen en route. Within approximately 24 hours of being notified of the theft, LoJack SCI monitoring specialists were able to provide law enforcement with the location of the cargo. The load was found within 30 feet of where the tracking device indicated it would be. Law enforcement was able to recover the cargo and identified a suspect who was placed under arrest. In another instance, gunmen drove into a truck terminal, stole a tractor-trailer loaded with a shipment of tobacco valued at $1,000,000, crashed through the gates and escaped. The LoJack SCI Monitoring Center was notified of the heist Approximately forty-five minutes later, law enforcement located the tractor-trailer... and within minutes was able to contact local law enforcement with the location of the tractor-trailer. Approximately forty-five minutes later, law enforcement located the tractor-trailer and was able to return it to the terminal. After an investigation, four suspects were arrested for the theft. LoJack SCI InTransit provides the covert tracking and monitoring solution that actually recovers stolen cargo. It also provides intangible benefits, including 8

9 helping law enforcement fight the problem of cargo theft which aids police in combating organized crime rings and getting wanted criminals off the streets. But most important, LoJack SCI InTransit helps protect both the supply chain and a company s bottom line. As an added incentive, insurance companies have recognized the positive impact that their insured customers investments in supply chain security and transportation asset protection solutions have on their overall risk profile. In most cases, the insured customers who make these investments can expect consideration from their insurer for loss deductible waivers and positive underwriting, which could lower their annual insurance rates. LoJack has specific programs with several insurance companies, including Chubb, Hanover, Liberty Mutual and Progressive. The Wisdom of Sharing Intelligence The 9/11 Commission Report stated that there is a heightened need to move from a need to know to a need to share mindset. LoJack SCI is fulfilling that need to share through its Supply Chain Information Sharing Analysis Center (SC-ISAC), which provides an extensive, diverse community of customer members from private industry to law enforcement with a platform to report information and combat supply chain threats. SC-ISAC is one of 11 existing ISACs that were instituted as part of a presidential decision directive under both the Clinton and Bush administrations to provide information critical for the safety of the infrastructure in the U.S. SC-ISAC aggregates intelligence not only from its members, but from the 10 other ISACs, as well as the Department of Homeland Security. It serves as the information sharing source that captures, analyzes and disseminates historical incident and case data on threats and vulnerabilities in the supply chain, including cargo theft, product diversion, and counterfeit cases. SC-ISAC provides actionable information to government, law enforcement and its private sector members and plays a vital role in bringing together cross industry organizations that contribute to the protection of the national infrastructure. The world s leading manufacturing, logistics and retail corporations are among the many member companies using SC-ISAC and LoJack SCI s solutions. At the end of 2008, SC-ISAC had more than 1,500 users from nearly 600 organizations a number that is increasing rapidly. The value that SC-ISAC provides continues to grow with each additional contributing member. As detailed earlier, LoJack SCI published its first annual Cargo Theft Study report based on information from SC-ISAC and will continue to issue these reports to the public at large annually and to members quarterly to provide the industry with important statistics and trend information. Membership in SC-ISAC provides benefits that cannot be found elsewhere, including: Alerts: Immediate notification of potential threats to the supply chain as they occur; available information on terrorist threats and natural catastrophes that could impact a member s interests 9

10 Bulletins: Twice Weekly news, advisories, incidents, events affecting the supply chain; industry-specific bulletins regarding counterfeiting, in-transit cargo theft and illegal diversion that will help in an individual organization s investigation, recovery and prevention efforts Situational Awareness: Up-to-date information including live maps and data feeds on external situations that could potentially disrupt and threaten the supply chain Events: Upcoming tradeshows, conferences, seminars, and other educational, networking, and collaborating opportunities that impact the supply chain across a broad spectrum of industries Advisories: Updates as they occur on government regulation and compliance requirements and strategies LoJack SCI s foresight and understanding of the market need for sharing information were catalysts for the development of SC-ISAC and one more example of how the company stands apart from the competition. Support LoJack SCI offers a wide range of support both as part of LoJack SCI InTransit and as stand-alone services. Clearly the most notable support within LoJack SCI InTransit is provided by the company s relationship with law enforcement, which includes Cargo Task Forces, state and local law enforcement agencies, private investigators, as well as LoJack Corporation s law enforcement liaisons. LoJack SCI also provides implementation support for its InTransit customers, which can encompass solutions such as asset protection, consultancy and incident and case management. LoJack SCI s support extends to its sales team who can offer prospective customers the opportunity to experience the capabilities and value of its solutions through its Pilot Programs. The sales team also works closely with customers to tailor buying and leasing options to meet exact requirements that balance security and business needs. Standing Apart from the Crowd Balancing security and business needs is indeed a challenge in today s world. In fact, maximizing efficiencies and minimizing risks particularly in the supply chain are essential for an enterprise s bottom line performance. No other company provides an integrated solution like LoJack SCI. LoJack SCI has the right management, partners and technology plus the power of LoJack s core technology, resources and law enforcement connection to deliver a comprehensive Commercial On-Highway Security solution that protects assets in the supply chain and ultimately impacts profitability. For more information, visit or call (800)

11 * The LoJack SCI Theft Study was based on information the company collected and analyzed in 2008 from members of its Supply Chain- Information Sharing and Analysis Center (SC-ISAC), the only source for information and analysis sanctioned by the government that helps the supply chain community and law enforcement protect the supply chain from illegal and disruptive activities. ** On-Highway Market includes truck stops, rest areas and other scheduled stops en route *** Chubb North American Cargo Theft 2008 Annual Recap 11