Pilferage in Logistics Risk Management: 5 Prevention Tips

Inventory shrinkage and losses have always been among the biggest challenges in various sectors. Pilferage is fairly common in logistics. Due to the large volumes processed by facilities and the multiple stages of supply chains, small-scale theft (known in logistics as pilferage) often goes unnoticed. Nevertheless, that can damage a company’s reputation. Furthermore, minor losses can accumulate and lead to significant costs in the long run.

Fortunately, thanks to modern security solutions, facilities and other companies can minimize losses due to pilferage in logistics. In the following paragraphs, we’ll share a few tips about logistics risk management related to theft. We’ll also explore how innovative gate and yard technologies, such as SmartGate, can help reduce risk and deter pilferage by improving visibility and accountability.

Understanding Pilferage in Logistics

The small theft of single items or small quantities from a large shipment is called pilferage. Unlike grand theft, it’s subtle and often goes unnoticed. That’s why pilferage in logistics can be a major risk, as it can lead to large losses over a period of time.

Due to the multiple stages of supply chains, pilferage is hard to detect. Therefore, businesses need to implement security measures that secure packages and prevent petty theft.

Top 5 Tips for Preventing Pilferage in Your Supply Chain

There are many ways to prevent pilferage in logistics. Carriers, shippers, and facilities need to take measures to ensure that inventory shrinkage due to theft is minimized. Let’s examine a few of the logistics risk management measures related to pilferage.

1. Strengthen Carrier and Vendor Vetting

Weak links in the supply chain can lead to accumulating losses due to pilferage. Conducting background checks on partners, subcontractors, and employees is a must. In addition to these initial checks, periodic audits can further incentivize theft prevention.

2. Enhance Visibility and Tracking

Combining tracking and scanning solutions with gate visibility tools, such as OCR-enabled cameras, can significantly reduce visibility gaps at key entry and exit points. These solutions increase deterrence and support investigations by maintaining time-stamped records of gate activity.

3. Secure Cargo Handling and Facilities

Loading and cargo handling are the most common processes during which pilferage occurs. That’s why tools like surveillance cameras and controlled access zones should be used in docks and yards. Additional measures, such as frequent staff rotations and additional verification for high-value loads, can be used to further secure facilities.

4. Leverage Technology & Data Monitoring

In recent years, there have been various innovations that combine AI-powered analytics tools with dock and yard management systems. Some technologies are introduced as features of already established platforms (like Opendock’s SmartGate). Others are standalone solutions that can be integrated with logistics technology. These technologies can automatically audit data, identify patterns related to pilferage in logistics, or offer tight control during risky processes.

5. Educate and Enforce Compliance

Managers should implement proper policies regarding pilferage in logistics facilities. Most businesses prefer to have a zero-tolerance policy. It’s often combined with training staff members on anti-theft protocols and how to safely report theft without risking retaliation. Surprise audits and drills can test readiness and prevent errors.

Leveraging Technology Like SmartGate for Risk Mitigation

Nowadays, logistics risk management is handled by innovative solutions like SmartGate. These tools maximize yard visibility and minimize pilferage in logistics. Here are some of SmartGate’s features.

• Accuracy. By using computer vision and OCR technologies, SmartGate captures consistent, time-stamped visual records at gate entry and exit points.
• Centralized and versatile data. Whether supporting damage claims or investigating discrepancies, the software captures high-definition, time-stamped images at key gate events.
• Scalability and reporting. Businesses in logistics need solutions that are scalable and can be used for multiple locations. SmartGate is exactly that.

Frequently Asked Questions About Pilferage in Logistics

As supply chains have become more complex, logistics risk management has become paramount. Reducing pilferage, damage, and other risks can increase the reputation of a facility and make it a preferred option among carriers.

What Is the Difference Between Pilferage and Cargo Theft?

Pilferage is used to explain small-scale and often internal theft. It’s commonly committed by warehouse workers or drivers. On the other hand, cargo theft refers to well-organized and professionally executed large-scale theft of the entire load.

How Can SmartGate Help Reduce Logistics Risk?

SmartGate is one of Opendock’s features. It can be used alongside gate management and yard management solutions offered by Opendock.

SmartGate is an AI-powered gate visibility solution designed to improve verification and oversight at yard entry and exit points. As such, it improves yard visibility and tightens security. SmartGate can be used to support damage claims and assist investigations by providing verifiable gate records and visual evidence.

What Preventive Measures are Most Effective In Large Warehouses?

Large facilities need to combine different security layers in order to minimize theft. That includes processes such as controlled access to specific zones or technologies like cameras and AI video analytics solutions. Automated yard and gate management tools with real-time yard visibility are also suitable for both medium and large warehouses.

Prevent the Most Common and Costly Risks with SmartGate

By leveraging smart OCR technology and AI gate security, this Opendock feature can streamline check-ins and minimize pilferage. Solutions like SmartGate support facilities looking to strengthen gate controls, improve visibility, and reduce risk across yard operations.