Back To Basics: Stop Theft And Tampering In E-Commerce Logistics

Back To Basics: Stop Theft And Tampering In E-Commerce Logistics

● Start with the size of the problem – need the reader to understand that theft / tampering is a massive problem in Indian E-Commerce – there should be enough news articles and reports on counterfeiting etc in Indian Ecom – bring that out to show this is an urgent problem

● Then talk about what cos. Are doing to address it - Flipkart’s initiative on ‘Anti-theft’ packaging introduced in 2017. Statistical report on the improvement of change in theft and tampering in E-commerce logistics.

● Compare the data with global movement under E-commerce and existing problems which are still not solved or talk about that despite these initiatives the problem still remains.  Discuss the ways in which the theft/ tampering and fraud occurs in e-commerce and the impact to the brand/sellers as well as the marketplaces – there should be enough data on Twitter, YouTube around the bad PR brands/Ecom marketplaces get due to this

● Discuss the basic solutions which have been used such as tapes, secure cardboard packaging, simple/cheap plastic seals. See the technological advancements such as plastic seals with metal inserts, stronger/more durable plastic seals, plastic seals with USW and then Plastic seals with RFID. Plastic seals with RFID serve 2 functions for ecommerce of securing and managing fast moving inventory.

● Summarize how using better quality seals (like those described above) can actually help solve the problem vs. paying lip service to the problem by using the lowest cost seal.

The global Ecommerce market was valued at more than US$ 3.46 trillion before the Covid-19 pandemic. This number is expected to grow at a rapid rate by 2021 with consumer’s increasingly shifting to online shopping for their daily needs in comparison to traditional offline retail channels. The growth of E-commerce has unfortunately also seen a growth in supply chain theft, which was estimated to have risen to US$ 40 billion in the year 2019.

“Within the ecommerce industry, cases of pilferage, especially of electronic goods and high-end mobiles, have been a consistent challenge for ecommerce companies everywhere,” Flipkart Senior Director Satyam Choudhary said while talking to Hindustan Times.

Criminals have realised that Logistics companies are an easy target to infiltrate and cover up their tracks to make it seem like nothing ever happened. Such theft and tampering activities are not known to the company until it reaches the customer and the customer then has to raise a complaint with the E-commerce or logistics companies. This not only hurts the Ecommerce player with a loss in terms of revenue, but also hampers their brand reputation and market goodwill. The thieves have become so sophisticated that less than 3% of the culprits are ever apprehended as per BSI & TT Club Cargo Theft Report 2020

Logistics companies focused on Ecommerce have been using plastic security seals or tamper evident seals on bags and cartons carrying their products to improve security. Several of these companies have also built separate teams to only manage security in the supply chain. Tamper evident seals are designed to alert the recipient whether the courier bag or carton was tampered or not.

In addition to tamper evident strap seals, ecommerce logistics companies also use tamper-proof tapes and distinctive bags with their brand logo to secure the package.  These packages are often times stolen but never reported and also opened and then re-sealed to blend in with all the other packages. In all these cases, the brand cannot pinpoint the location where the product went missing and who to hold accountable for the theft?

Constant innovation is the only way to stay one step ahead of criminals. For example, look at how home security has evolved from using a bolt or lock on the main door to sophisticated door locks with multi-locking features to grills on windows, to motion-detecting sensors, and CCTV cameras. To secure one’s home or premises, people use multiple tools and innovation has led to the introduction of new products in the market. Similarly, in the logistics supply chain, it is important for brands and delivery companies to improve their plastic seal via innovation. Some of the innovations that Ecommerce delivery companies have undertaken include changing the color of the strap seal and the information that is printed on the flag of the seal. However, these can be copied by the thieves after some time. Another example is the introduction of branded or special purpose bags. For example, Amazon introduced special plastic bags to hide the packages, which are also difficult to open without damaging the bag. However, the irony is that these bags are available for sale to the public on Amazon’s marketplace.  Hence, a culprit can easily source these bags and for a minimal printing charge, add a logo or serial numbering. Now the culprit can easily tamper with the original bag, damage it in the process and then simply replace it with an identical one that was bought online. This is one of the many ways how tampering can occur.

Hence, the only solution for companies is to constantly innovate. We recommend two types of innovation considerations for ecommerce logistics.

1) Improve the physical security elements of the strap seal itself. Make the strap seal difficult to tamper or more tamper-evident in order to detect theft more easily

2) Add digital components to the physical security seal since it is extremely hard for criminals to recreate or alter the digital identity of a security seal and find a replacement in the black market

Sepio Products Private Limited believes in constant innovation to help combat supply chain theft and make the logistics and Ecommerce industry safer and more secure. As part of their innovation agenda, Sepio has introduced a new product feature namely a superior metal clip that is ultrasonically welded into the strap seal making it the most secure seal available in the market today. Sepio has also introduced Digital Strap seals called the Logi-E seal, which are not only tamper evident but also have a unique digital ID that cannot be replaced or replicated. Hence, a thief cannot obtain a counterfeit seal in the open market and replace it post tampering. These Logi-E seals are ideal for use on high value cargo like mobile phones and electronics that are prone to high incidences of theft and tampering.

‘Phygitial’ security is the future – combining physical security with the power of digital security. To explore how you can build a more secure and efficient supply chain, connect with Sepio Products at sales@sepioproducts.com .