No Celebrating Holiday Cargo Theft

Thanksgiving weekend is historically a hotbed of cargo theft activity. Freightwatch International reported that last year’s holiday cargo thefts averaged about 3 per day, which is about a 27% increase compared to non-holiday weekends.

Last year’s Thanksgiving weekend led to 18 reported thefts, totaling in excess of $1,500,000 in goods stolen.

Worse yet is that both Christmas and the New Year fall over a weekend again this year!

In general, average cargo theft losses are between $125,000 to $150,000 per incident, but that number greatly depends on the goods being stolen. You have lots of $50,000

and $60,000 loads outweighing the large $1,000,000 loads that catch the headlines.

Cargo is most often stolen (80% or so) from “unsecured parking areas” like truck stops, parking lots and freight terminals.

Additionally, cargo theft is very geographically based.

About 85 to 90% of cargo theft occurs in one of about 7 “Hot Zones” around the country. Those are: California (especially around Los Angeles/Long Beach), The Chicagoland area in Illinois,

The Atlanta metro area in Georgia, Florida, (especially in the Miami area), Dallas and Houston, Texas, The greater Memphis, Tennessee area and the port areas of New York/New Jersey.

Essentially, any time a truck is stopped for a length of time, the chances for cargo theft increase dramatically. This is especially true if the vehicle is left unattended.

Food and beverages are typically the most commonly stolen commodity, but consumer electronics re-emerged in the top spot last quarter.

Food and beverages are stolen readily because everyone has to eat and drink and the security protocols surrounding these loads is often lax due to their relatively low values. They are also targeted

because they are easy to fence and hard to trace. This is especially scary when you think about it further..could the meat or produce in your tacos be stolen?

As the holidays approach, cargo thieves begin targeting very specific items.

Consumer electronics (especially TVs and gaming consoles), home and garden goods (mainly appliances), clothing, shoes and cosmetics will top cargo thieves Christmas Lists this year!

While cargo theft is often thought of as a victimless crime, every consumer pays the price. Each year, cargo theft costs the country somewhere between $15 billion to $30 billion in losses.

Additionally, most cargo theft isn’t committed by chance. Would be thieves are often very well organized and methodical about how they are going to execute their crimes. Most goods are stolen to meet an “order” from one of their clients. Even if there is no order for the goods, the criminals usually have well established fencing  and storage methods in place which includes the use of both legitimate and illegitimate motor carrier operations.

While some of those losses are insured against, many are not. Those costs have to be made up somewhere and that is usually in the final costs that are passed down through the supply chain to the consumer.

Even if a loss is covered by motor truck cargo insurance, the insurance companies are now in a better position to secure higher rates for those trucking accounts who have losses of any kind.

Cargo theft losses are particularly problematic to insurance underwriters because these are often viewed as mostly preventable losses.

Cargo theft is a real exposure for trucking companies, especially for small and mid-sized businesses!

The unfortunate reality is that this group of truckers (who represent around 90% trucking companies) have the least formal security measures in place and they tend to have the most restrictive cargo insurance coverage.

Unlike many other types of insurance, cargo insurance is not a regulated line of insurance.

This means that insurance companies who offer this coverage don’t have to have the coverage forms or the rates that they charge for coverage scrutinized by state insurance regulators.

While competition tends to keep rates in check, each insurance company is free to include or exclude any coverage that they don’t wish to provide for any policy. The bottom line is that every single motor truck cargo insurance policy can be different than the next one, even if it is two policies issued by the same insurance carrier.

So, the chances of a small motor carrier having a theft loss is higher and the likelihood of that loss being covered with insurance is lower. This, alone, has led to many good motor carriers going out of business.

Even if the loss is covered by the motor carrier’s insurance policy, the trusted relationship that the carrier once enjoyed with the shipper or broker is now damaged and the trucking company’s reputation is tarnished. A client of mine likened a cargo theft to marital infidelity once..he said that even though the shipper can forgive their carrier partner for the transgression, the level of prior trust may never be regained.

The best cargo theft prevention is achieved when you take a layered approach of physical and procedural controls. Use ways to deny criminals access to the goods being hauled and reasons to target your company.

1) Avoid having the truck stopped within 250 to 300 miles of beginning the trip. Many times, cargo thieves will target a particular truck. They will follow the truck and wait for the driver to stop for     an extended period (food, shower, bathroom, etc.).

    The brief separation between the driver and the truck offers the criminals the perfect opportunity to sweep in and take the load.

2) To help achieve number 1, ensure that you or your driver is well rested, has enough hours of service remaining and has taken care of their basic human needs prior to beginning their trip.

3) Drivers must be aware of their surroundings at all times, and this is especially true when discussing cargo theft prevention. They must pay close attention to see if anyone may be following

    them.

    When choosing where to park during extended trips, opt for areas where other trucks are, that are well lit and that provide some natural opportunities for prevention like backing up close to an       embankment or building, etc.

    Doing this will provide some natural barriers to entry for the trailer while the activity will promote any suspicious activity being noted and/or reported more quickly.

4) Most cargo theft can be prevented for less than $100 per truck. This is accomplished by using a heavy duty padlock on the rear door(s) of the trailer and an “Air Cuff” lock in the tractor. The padlock discourages would be thieves from popping and shopping in the back of the truck while the air-cuff lock prevents the physical movement of the tractor by preventing the tractor and  trailer brakes from being released.

     The leading air cuff lock can be purchased for around $75. Use the remaining $25 to purchase a hardened steel padlock with a protected shackle. Many times, cargo theft comes down to an ease of doing business for the criminals. If you’re truck appears to be well protected, they may pass up the chance to make you a statistic.

5)  Avoid dropping trailers or waiting for delivery in one of the “Hot Zone” areas mentioned above. This is especially true around holidays and weekends as activity around the area will likely be at a minimum.

6) Consider hiring extra security guards, especially around weekends and holiday periods. Make sure that those guards are well screened and that your contract with the security company doesn’t        limit their liability in case of a cargo theft on their watch.

7) Be very clear about your expectations for the security guards. Prohibit them from allowing their friends/family to visit them at work and ensure that they make regular but random checks                 throughout your lot despite the weather or temperature. Consider using some monitoring programs to verify that checks are being made.

8) Make sure that all areas of your lot are well lit and can be seen by passing law enforcement officers. Challenge any suspicious person(s) visiting your business or possibly conducting surveillance      on your terminal or warehouse location.

9) Make local law enforcement friends of your business! Invite them in for coffee and donuts (or whatever) once a month. Talk with them about your operation and the kinds of activities that                might look suspicious.

10) Don’t skimp on locks and cameras for your terminal and lot. Invest in high quality locks for all exterior windows and doors and spend some extra money on a serious camera system if you are          going to purchase one.

11) Ensure that all locks are actually working and engaged when the terminal location is unoccupied and that your security system is operational and armed. Some very smart thieves will “Test”             your security system for you by triggering your alarm system a few times prior to making their move in order to understand your response and that of local law enforcement. This is especially           true if you have warehousing and/or storage at your terminal location and even more so if you ship/receive high value goods.

12) Engineer your business to have fewer loads around holiday periods and try to avoid having pickups on the Wednesday before Thanksgiving with a Monday delivery. If the goods aren’t expected       to arrive until Monday, potential thieves have a very nice head start on getting further away with the goods. Time is an enemy here!

For a great checklist, feel free to check out our Holiday Cargo Theft Prevention Checklist here.