Hidden cost of transportation: Theft

Transportation and Logistics focus on productivity and efficiency. Within logistics, there is a common goal of reducing the use of resources without jeopardizing quality in the production, packaging, and transportation processes. However, security is a concern for the operations team as it has been a growing concern in the U.S. and around the world. In a three month period from June to August, there were a total of 202 thefts in the U.S. which incurred an average loss of around $166,000. As a result, we can see that the security of goods is equally important as production logistics. Businesses have to lower costs by implementing stricter policies in the transportation of goods. One of the culprits of the increased theft is the use of unsecured lots. In turn, businesses can invest in secured lots for drivers to park the trailers in which prevents future theft. On the other hand, businesses can avail of successful middlemen to complete the transportation process like Fedex. Like what Mahesh Nagarajan said, middlemen can give businesses the cheapest price as they can avail of economies of scale reducing the average price. Overall, the article illustrates how theft is a risk in the logistics process which businesses need to solve.

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