Theft of $60,000 Worth of Freezies is a Symptom of a Wider Supply Chain Issue

August 3, 2016

 

 

DC

At Argentus, we love to discuss interesting Supply Chain stories from any angle, and this is an interesting one, to be sure. In the dog days of summer, strange stories have a way of popping up: recently, CBC posted a story about two truckloads of Kisko Freezies that were stolen from a Brampton truck yard. Apparently, the value of the more than 10,000 cases of the summer-time treat was approx. $60,000 wholesale. The article describes how cargo theft, a persistent problem for companies for decades, has evolved from simple hotwiring in the past to a “complicated shell game” whereby thieves pretend to be shipping operatives with a false company name, orchestrating pickups of freight that never get delivered.

As the article notes, shady practitioners working in the black market for goods often prefer to steal food and other highly-perishable items rather than electronics that have highly-traceable serial numbers. Perishable items like Freezies are easy to unload because, within a few days, the evidence has been eaten – in this case especially on a hot day.

It’s the kind of interesting, light story that an outlet like CBC can’t pass up at the height of summer – the kind of story that conjures images of a Freezie shortage leading to lots of warm-weather temper tantrums. But the story also contains some interesting things to think about for those who follow the world of Supply Chain, as we do.

The first interesting angle of this story is that it highlights an under-discussed Supply Chain issue: and that’s the security of freight as it moves from point A to point B. As the CBC article notes, cargo theft has created a black market worth $5 to $6 billion a year. For reference, the size of Canada’s Transportation and Warehousing industry – the above-the-boards part – is about $70 billion a year. So cargo theft represents a significant Supply Chain challenge, one of the many that Supply Chain practitioners have to deal with – a rapidly-proliferating list that also includes efficiency, customs documentation, labour disruptions, weather events, commodity prices, customer service, supplier relationships, and, of course, keeping all the data straight. Oh, right, and the issue of maintaining a so-called Cold Chain for perishable, refrigerated goods, which no doubt Kisko has in mind. (Please feel free to let us know which 10 or 15 other major Supply Chain considerations didn’t make it onto this list). These days, Supply Chains are expected to be nimble, efficient, strategic and responsive, and security against this kind of fraud is yet another aspect of this worth mentioning. 

The other angle with this story is a bit more unusual, but also worth thinking about: apparently, the thieves not only stole the truckloads of Freezies, but also the information about the loads from the company’s Supply Chain database. Kisko was able to track down the missing Freezies, but – according to company President Mark Jacobs – lost about half of the inventory’s revenue because of the loss of data.  This shows the importance of Supply Chain data in the internet age, but more than that, it points out just how much Supply Chains are truly everywhere, even when you might not expect them. It shows that even criminals and the black market value Supply Chain data on a level that would have been unthinkable even a few decades ago. In Jacobs’ words: “This organized crime is so sophisticated their Supply Chain would really be the envy of any of us in the industry.” In any case, the Freezies were returned safe and sound.

Happy summer, everyone. logo_icon

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