SC-integrity, Insurance Firm Team to Protect Cargo

An insurer mandates the use of SC-integrity's supply chain security service as a requirement for financial protection against cargo loss.

SC-integrity, an enterprise supplier of wireless-enabled supply chain security services, is teaming up with Lexington Insurance Company on a new offering touted as the first to combine technology with financial insurance in the fight against cargo theft.

Cargo loss represents a $50 billion menace every year, according to Ben Armistead of GTU (Greenwich Transportation Underwriters Inc.), broker representative for both SC-integrity and Lexington.

Under the partnership deal unveiled this week, Lexington Insurance has essentially instituted the use of SC-integritys products and services as a proviso for customers who want insurance against cargo loss, Armistead said in an interview.

Less than two years after the companys startup, SC-integrity has already signed up customers that include big overnight shippers, manufacturers, transport companies and government agencies, according to Denis duNann, the companys CEO.

Specifically, SC-integritys customer list includes Federal Express, Williams-Sonoma Inc.; Yellow Freight, TJ Maxx Inc., and the FBI, for example.

SC-integrity has already helped customers retrieve nearly $7 million in stolen goods, duNann said in another interview. Use of the vendors technology has led to several arrests.

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For instance, SC-integrity recently helped to pinpoint two law enforcement officials from Cook County, Ill., as culprits in a cargo theft incident involving shipments on route from Memphis, Tenn., to Chicago, duNann said.

In many other situations, employees of either the product distributor or third-party transportation carrier turn out to be to blame, Armistead said.

Makers of PCs and consumer electronics goods routinely ship truckloads of goods valued at $1 million and up, according to the underwriting expert.

"But many truckers dont have the wherewithal to stop theft. And [distributors] have been hard-pressed to insure truckloads for more than $250,000 on some commodities."

Armistead foresees use of the combined solution as a tool against terrorism and product counterfeiting, as well.

"Companies [importing] goods from other countries want to be able to know if a shipment has been corrupted at the point of origin," he said.

SC-integritys current product lineup includes SC-tracker and SC-intransit, according to duNann.

SC-tracker consists of small, portable devices enabled with cellular-assisted GPS.

"[The devices] can be hidden inside buildings, or placed covertly in [shipping] cartons," according to the CEO.

Through its SC-intransit service, SC-integrity hosts and manages software for tracking the locations of the devices.

The portable devices use cellular and GPS satellite-based communications to report to SC-integrity about their whereabouts every 30 seconds.

The service also includes an alert function, which provides immediate notification by a choice of phone or e-mail if either a vehicle or a carton within the vehicle moves beyond a stipulated set of boundaries known as the "geofence."

DuNann likened the supply chain security system in some ways to a home security system.

"Just as homeowners with home security systems are able to get discounts on home insurance, shippers who use SC-integrity can now get discounts on cargo insurance," he said.

Ultimately, duNann eyes creation of a third piece in the SC-integrity system.

Through an upcoming database dubbed SC-interrogate, shippers will be able to share information about cargo-related crimes, said duNann, who previously started up companies that include Verifone Inc. for fraud detection.

"Cargo loss is a much bigger problem than check fraud and credit card fraud put together," according to duNann.

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