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Preventing cargo theft and counterfeiting through track-and-trace

Preventing cargo theft and counterfeiting through track-and-trace (Photo: Jim Allen/FreightWaves)

Of the several issues that threaten the freight industry, the problem of cargo theft has had a debilitating effect on the industry’s operations – with hijackers becoming more organized and tech-savvy, leading to losses of over $15 billion every year within the U.S. freight market. Though there is no one magic bullet to eradicate cargo theft completely, technology can improve defenses. 

“The bad guys are becoming more sophisticated by the day. And because of this, companies are looking to implement tracking technology all the way from the raw material to the finished product,” said Randy Rubenstein, director of business development at LocatorX, a track-and-trace technology startup. 

Such an end-to-end monitoring system will virtually render it impossible for thieves to hijack freight by targeting weak links and blind spots within its supply chain. For instance, cargo theft is a common occurrence within the luxury goods segment; thieves often exploit a blind spot and hijack finished goods by removing them from their packaging. 

This is because luxury companies do not put their trackers on their products, but rather place them on the packaging, making them sitting ducks for hijackers. Rubenstein pointed out that the scenario is slowly changing now as companies are embedding sensors within the product itself, making their supply chains more resistant to thievery. 

Scott Fletcher, the president and CEO of LocatorX, explained that apart from inhibiting cargo theft, end-to-end tracking also helps to repel counterfeit items that are introduced into supply chains. Concerns about counterfeit products flare up in a truly global supply chain setting. The presence of several stakeholders spread across the value chain, and a general lack of transparency across global supply chains lead to a scenario that can lead to cargo chaos.

“You’ve got many third parties that are involved in manufacturing today, so much so that the brand may not even be doing the production. You’ve got some components that are coming into the mix and packaging coming in from third parties. This leads to an opportunity for bad actors to introduce counterfeit items,” said Fletcher. 

The tracking sensors that exist within supply chains today are usually the Internet of Things (IoT) devices. Though the IoT sensors are generally small in size, they might not be minuscule enough to be deployed ubiquitously across every step of a supply chain. Fletcher pointed out that LocatorX’s technology could circumvent this problem, with a solution that is structurally similar to an RFID tag – thus coming in handy as it can be embedded in items without damaging or altering its aesthetic outlook.  

“We are bringing in nanotechnology to supply chains. Our solution is based on a miniature atomic clock that we can put on labels. When you look at the structure of our solution and also the features we offer at our price point, businesses can bring it onto a tube of toothpaste or a bottle of ketchup, let alone expensive luxury products,” said Rubenstein. 

The technology involves putting a chip within the label that is powered by an energy-harvesting coil within it. However, the solution requires negligible energy to power its operations, and thus, there is no need for connecting it to an electrical connection or a battery. LocatorX, apart from tracking a product, can also deliver real-time updates on humidity, temperature and other dramatic changes in environmental conditions around the product. 

“Early next year, you will have the atomic clock, which will help you track an item with an accuracy of just a foot, with the price point being in pennies. This makes its application transformational, which is what LocatorX is all about,” said Rubenstein. 

Fletcher pointed out that companies must look to monitor their supply chains, because there can be several unintended consequences with counterfeit products entering their system, apart from the obvious fall in consumer trust and brand value. 

“For instance, olive oil is one of the most widely counterfeited products in the world. When they counterfeit olive oil, they usually either substitute it with a completely different type of product – like peanut oil or sunflower oil. If you have a peanut allergy and you think you’re buying a certified olive oil product when it actually contains traces of peanuts, you might get sick,” said Fletcher. “This is why we believe that we are solving a problem that has never really been solved in the market before.”