How to Handle Documentation In Logistics

by Vector | Dec 21, 2021 4:02:39 AM

There's a growing divide in this country—and no, I don't mean politically! I speak of a different ongoing debate that happens in certain supply chain circles: how to handle documentation in logistics.

Why are we having this conversation now? Because it seems like we're at an inflection point. There's a growing sense that evolving tech could make the way we do things look very different in the coming decade. In turn, we're analyzing everything we can to uncover the best way to proceed.

We're looking at the past and the present of documentation.

  • What works well?
  • What actually doesn't?
  • What's legally required?
  • What actually isn't?

Ultimately, there's a collective sense that the future of documentation could simply be better in logistics. But how do we get there?

This conversation always seems to start with paper. After all, until a few decades ago, documentation always meant paper, right? That stems from the contractual nature of freight paperwork like bills of lading (BOLs). In turn, we always had to get a John Hancock from the fork truck driver. That was the proof of delivery (POD). There's lumper receipts. Scale tickets. That's all paperwork.

The problem is that all this paper needs constant management. And that takes resources. Human resources can be put to better use than managing the paper chain. But this is how we did things in logistics. It's often how we still do things.

But how long we will keep doing things on paper? How should we handle the future of documentation in logistics? Let's explore!

Has It Come Down to Virtual Reality Versus Fiat Reality Already?

First of all, an industry outsider might not think documentation in logistics is the juiciest gossip by the water cooler. This is what we're going to talk about? Have you seen the endless stream of entertaining things on TikTok? It might seem like there are a thousand better things to look into. But that segues us right to the point. We're ditching paperwork in essentially every other corner of life!

Documentation in logistics is simply one example of a broad cultural shift that's been well underway for some time already.

There are thousands of examples. Instead of schoolbooks? My kids carry laptop computers for all their schoolwork. Passing folded origami paper notes was big when I was in junior high in the 1990s. Nowadays, my teenager sends those "yes, no, maybe" questions by Snapchat. Can I get some cash, Dad? Ha, you should know better! I haven't carried physical dollar bills in five years! And with the rise of Bitcoin and blockchain technology, the line between dollars, digital, fiat, and cryptocurrency gets blurrier by the day.

Beyond social media and cryptocurrency, there are NFTs and the metaverse. Real real estate developers are selling real estate in the metaverse. That sounds blurry to me!

Ultimately, combine everything and it sounds like something out of science fiction. Maybe we should simply ditch boring old fiat reality altogether and enter the Matrix alongside Keanu?

Supply Chain and the Logistics Documentation Digitization Proving Ground

Let's not upload our brains to the Matrix just yet. But maybe you could argue we already have. (At least in part.) What I'm most interested in these days when it comes to technological advancements is utility. What does that mean? We're well into our second decade with smartphones. We like to say that everyone has more computation power in their pockets than NASA had when they sent men to the moon. But what are we doing with it?

Gone are the heady early days of social media. Now we have The Social Dilemma and other documentaries. We have leaked internal documents from Instagram that show the app is bad for teenagers' self-image. The jig is up. There's a dark side to social media. And you can't crumple up and throw away your phone like a junior high note.

The point here is that there's true utility within disruptive tech. For every bad tech use case, there's a good one. For instance, I don't hear anyone complain about mobile banking apps. No one still jokes about GPS that repeats "Recalculating" as it gets you lost in a cornfield.

What's changed? In short, something akin to Moore's Law. The downward pressure of the daily grind has facilitated the upward climb of tech. There have been continued iterations and improvements thanks to the firm but honest mother of invention: necessity. My favorite example of this is document digitization.

Digitized documents streamline the manual paper-pushing bottlenecks of the old logistics industry. That's a tangible benefit we can feel today. But also, the data created through digitization forms the backbone of subsequent iterations now taking shape. That's tangible for the future.

Documentation in Logistics: Prove on Time and in Full (OTIF)

Ultimately, we're discussing documentation in logistics. But really, we're talking about security.

Documentation is the backbone of the supply chain. That's because we're in the business of moving goods. Goods are another way of saying property. Thus, like real estate, possession of property must be carefully documented. After all, the old saying goes, "possession is nine-tenths of the law."  In other words, documents help keep the chain of custody crystal clear. That way, no one ends up in jail.

In real terms, logistics documents confirm certain basic assurances. We like having contractual assurance that the goods will be delivered on time, in full (OTIF).

Much of the ongoing supply chain crisis has been about goods not getting delivered on time. The "on time" side of things is tangible, which makes it pretty clear. We want our stuff! Is it here? No? Where is it?!

On the other hand, what about the "in full" part of the equation?

In my opinion, documentation in logistics is more vital when it comes the "in full" portion of OTIF. Logistics security issues center around the count. Did the goods arrive in full? Does the count match the documentation?

Sure, an odd driver might hit up a naive freight broker for a false detention charge. A driver or carrier might misrepresent themselves. And certainly, entire trucks have been stolen. In that case, you have neither on time nor in full. But for the most part, the more urgent security concern has been cargo theft.

Defining Cargo Theft

Cargo theft can be defined as occurring when an incorrect person is in unlawful possession of the goods.

The Texas Department of Public Safety defines cargo theft as "the criminal taking of any cargo including, but not limited to, goods, chattels, money, or baggage that constitutes, in whole or in part, a commercial shipment of freight moving in commerce.”

Unfortunately, some trailers are targeted more than others. The primary targets contain the most valuable goods. For example, electronics. And the longer a trailer or container sits in one spot, the more susceptible it becomes to bad actors.

Historically, the risk of cargo theft has taken the shape of five tactics.

The Five Tactics Used in Cargo Theft

According to a report at truckinginfo.com, cargo theft is on the rise. Travelers Insurance outlines five common cargo theft tactics.

  1. Straight cargo theft: Cargo is physically stolen from a truck. This is most common with unattended trailers. It's one threat of an ongoing container backlog at ports or yards.
  2. Strategic cargo theft: This typically means theft due to fraudulent or falsified documentation. In other words, this can include identity theft or false representation. Regardless, the goal of this tactic is to trick a rushed or naive freight broker into giving up legal documentation for a load.
  3. Theft using technology: For example, sniffers can detect GPS signals pinging off IoT devices inside a trailer or container. In turn, GPS jammers can disrupt those signals, which essentially hides a stolen truck.
  4. Cyberattacks: Travelers describes this as malware attacks or phishing scams that gain access to sensitive data.
  5. Pilferage: Small quantities of goods are stolen when a trailer or container is unloaded. In short, this is the primary reason behind a document like a bill of lading. You want to know: is it all there?

As noted, electronics are a popular target for cargo theft. The ongoing semiconductor shortage has much to do with that. Certain computer electronics feature a lot of chips. Processing units and gaming consoles are also high-value items, especially because of their use in Bitcoin mining.

As in any market, higher demand means higher prices. In order to protect against thieves, we must have proper security. This quickly becomes a conversation to have with the IT department. But there's no going back. This isn't a matter of yes, no, or maybe. The future of secure documentation in logistics will be digitized.

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.

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