Video management systems increase the bottom line and optimize security in logistics
Author: Paul Fisher, published in Security Magazine
Thousands of trucks, freights, ships and air freights carry millions of packages globally each day, yet the capabilities of humans to accurately track and inspect transported goods remains difficult. Logistics providers and shipping managers are tasked with delivering products on time and in prime condition – while also maximizing space on transportation. In tandem, they are required to ensure the security of the product, as well as the safety of warehouse staff and drivers. Security and business optimization in logistics calls for a multi-tiered approach – a solution that addresses security while streamlining operations, reducing costs and increasing revenue.
So, what is the role of video security systems in logistics and how can these devices support a versatile, flexible approach while generating more revenue? Traditionally, security directors might utilize video as a way to replace security guards – as video can see as much as three or four individuals could – and use it as a way to put one person in several places at once. However, the real return on investment (ROI) comes into play when video is utilized to enhance operational efficiency for processes such as trailer and truck inspection. Video systems, in this regard, can fill gaps left by lack of personnel or simple human error in logistical operations.
Video systems to increase revenue in logistics
Most shipping managers are responsible for inspecting each trailer before it departs the loading dock to ensure packages are secure and to evaluate whether the truck can handle additional inventory. This typically means there might be 200+ dock doors in a 400,000 sq. foot facility, and dozens of trucks waiting to leave, with only a few inspectors evaluating each shipment.
Industry experts estimate only 80 percent of trucks are actually inspected for product security and confirmed to be carrying the appropriate amount of product. These uninspected trucks are at risk for unsecured packages arriving damaged and, more importantly, with empty space and underutilized capacity. The loss in revenue from uninspected trucks is extreme. For example, a truck filled to 75 percent capacity, instead of 74 percent, can amount to somewhere between a $6 million and $12 million increase in revenue for logistics companies – directly impacting bottom lines.
With this in mind, the logistics and shipping industry is always looking for ways to improve operational efficiencies and reduce shrink. By utilizing a video system to monitor inspections, as well as track shipment size, logistics providers can ensure trucks are actually being inspected for safety and load capacity.
Using video for misclassified products or shipment validation
Revenue is lost every year because of accidental product misclassification. All products being shipped have a classification, and each classification has a specific associated cost. These per-pound costs fluctuate based on the value of the product, required insurance, risk and other factors.
For example, a sporting goods manufacturer shipping ammunition and firearms, under the code for clothing, would bill a 200-pound load at about $100, when the actual bill should be closer to $300. When multiplied by hundreds of packages a day, the total missed revenue is staggering.
Video systems can help correct this problem by detecting anomalies between billed amounts and package size. Certainly, security cameras cannot see through a box, but for example, a logistics manager would expect a box with 200 pounds of clothes to be fairly large. However, if the box were full of firearms or ammunition, the video could reveal a much smaller package. This anomaly, when flagged by a video system, could prompt an operator to investigate the contents of the box and contact the manufacturer to rectify the billed amount. Leveraging a VMS system in this way can assist logistics companies in capturing millions in missed revenue, that not only result in ROI on a security investment, but also continued annual bottom line profits.
Video systems to reduce OSHA violations and false claims
The logistics industry requires a tremendous amount of human labor to operate, from warehouse and shipping personnel, to truck drivers and machine operators. The more labor hours and employed individuals, the greater the risk for on-the-job injuries and Occupational Safety and Health Administration (OSHA) violations. Injuries also carry the additional risk of insurance payouts, lawsuits and loss of business – as well as false claims.
Video security systems can help mitigate risks for potential injury, deaths and safety violations by increasing overall safety and encouraging the enforcement of safety policies. For example, operators can use business intelligence provided by security video systems to audit seatbelt use for forklift drivers, object detection for potentially accident-causing blockages, spill detection to prevent slips and falls, and that pedestrians are using appropriately marked walking paths. Assigning an individual to monitor this activity can be costly and it can also be difficult for a person to detect all safety concerns. By using video systems to automatically capture data at all times, the information can be more accurately analyzed, stored and used for educational purposes in the future.
OSHA statistics indicate there are roughly 85 forklift fatalities and 34,900 serious injuries each year, with 42 percent of forklift fatalities from operators being crushed by a tipping vehicle. The safest step for the driver to take is to wear a seatbelt. A good example of utilizing a system for enforcing safety standards is a facility that used video to audit seatbelt usage, which showed only a 65 percent compliance rate. After the information was presented to the manager and employees, the next audit resulted in a jump to 87 percent compliance rate. In the event of an injury, this type of verifiable data can go a long way to prove the employer is serious about employee safety and investing in ways to improve safety culture within the company.
Additionally, where security guards are deployed, video systems enhance guards’ efficiency allowing them to have eyes on multiple areas. When coupled with video analytics, these systems can alert guards to specific situations such as motion in areas that should be unoccupied, or traffic proceeding in an unauthorized direction. While ultimately this means a reduction of guards, it does allow the guards on duty to be more efficient with their time and monitoring. The end result is increased employee safety and lower operation cost.
Video surveillance for an extra layer of security
Hundreds of thefts and losses from interstate shipments happen each year, sending logistics providers in search of solutions to add additional security measures. Security in warehouses and loading docks is of the utmost importance – offering a holistic view on facility operations and security from truck arrival, to loading and departure. Using license plate recognition analytics, logistics providers can ensure incoming trucks are who they say they are, as well as offer an extra measure of access control security. Where enhanced perimeter security is needed, video surveillance can notify security personnel of any suspicious behavior, or loitering.
Investing in an open, sustainable, versatile and flexible video management system can help logistics providers differentiate themselves from competitors by offering cost-saving measures and enhanced safety and security. From improving operational efficiencies, reducing OSHA violations and false claims, to increasing shipment sizes – a video system can greatly increase safety and the bottom line.
This article originally ran in Security, a twice-monthly security-focused eNewsletter for security end users, brought to you by Security Magazine.