Cargo Theft Synopsis
As of June 2009

At the request of the IMUA Transportation Committee, and reviewed by them, IMUA Staff compiled an overview of the current cargo theft situation for the first six months of 2009 using the myriad of information sources from which IMUA receives such data.

In summary, the following represents some of the trends and developments [in no particular order] gleaned from the information -

  • Cargo theft is up substantially over comparative YTD figures of 2008 and prior and upwards of 75% higher in the last several months alone. There are a number of reasons, but speculation is that the economy seems to be one of the key drivers. Even though there is less freight being moved on a comparative basis, the bad guys are even more active helping themselves to cargo in transit of every description.
  • Warehouse/Distribution Center burglaries continue to rise in both number and severity. Seizing on the Willy Sutton mantra - I rob banks because that is where the money is! - organized gangs seem to have found warehouse theft to be quite lucrative. This activity, as detailed in a recent IMUA Loss Control & Claims Committee Lessons from Losses Bulletin, follows a similar M.O. The thieves tamper with or otherwise compromise the alarm system; wait for the police to respond; repeat the practice several times; and then have sufficient information to know how much time they have to enter and steal merchandise. They even use forklifts and other warehouse equipment readily available, and often steal tractors and trailers parked at the facility as well.
  • So what loads are being stolen? You name it, thieves steal it, but the following list indicates the most popular merchandise of late -
    • Electronics of any kind, and in particular cell phones, large screen TVs, computers, appliances and even batteries
    • Pharmaceuticals - both prescription drugs and over-the-counter cosmetics
    • Automobile tires
    • Alcoholic beverages and tobacco
    • Coffee
    • Building and industrial materials with roofing shingles being a popular target ostensibly as the perps stockpile materials for after a storm sale
    • Food and drink products with baby formula an apparent current attractive commodity
    • Clothing and shoes
    • Home and Garden materials
Underwriters often are interested in the average value per load. There is no one number that stands out, and shipment values vary by commodity. Cell phone thefts have ranged from the $500,000 to $2.1 million. Warehouse thefts have been as high as $30,000,000. And pharmaceutical shipments run an equally random pattern. IMUA has received information directly from the pharmaceutical industry that nary a week goes by when one or more pharmaceutical loads are stolen. And this commodity causes a further unique problem. If the shipment is out of the logistical supply chain for any period of time, and is subsequently recovered, in all likelihood, it will be destroyed because of fear of the consequences.

Where are the claims occurring? Everywhere, but some areas are particularly notable for their trends -

  • The Atlanta metro area
  • The Dallas-Houston corridor
  • Memphis
  • The Chicago metro area
  • The New York metro area
  • Miami-Dade County Florida - a gateway to the Caribbean and South America
  • Southern California
No surprises here!

And when do most thefts occur? Recent statistics indicate upwards of 60% of all thefts occur over the Friday evening to Monday morning weekend period, and especially if there is a holiday weekend [Memorial Day - July 4th - Labor Day - etc.]. With just-in-time delivery being a supply chain norm, shippers are notorious for tendering their goods to truckers at the end of the week for Monday deliveries. And what do truckers do - they either park the load so they can go home for the weekend, or get close to their destination and drop the load at one of the many truck stops populating the Interstate highway system - a virtual shopping mall for cargo theft.

How about recovery prospects? Minimal. But several trends are evident and/or emerging -

  • If the entire rig is stolen, the tractor is usually recovered in close proximity - often within 10 miles - of the original theft.
  • The trailer is another story. They are found empty and abandoned almost anywhere with south Florida, the Georgia metro area and New Jersey being favored dumping areas.
  • GPS, RFID and other covert devices embedded in the cargo load have increased the chance of recovery. However, timing is everything as respects recovery. The greater the elapsed time from the original theft, the less likely the recovery prospects.
  • Law enforcement has, from time to time, either by design [a sting operation] or luck, stumbled upon warehouses full of allegedly stolen goods and merchandise. However, without a currently reliable information sharing network, they are often at a loss as to identify the rightful owner of the property.
With so much doom and gloom, is cargo theft inevitable? Yes, but there are things that can be done to mitigate the potential including -
  • Reasonable efforts must be made to mitigate or prevent thefts rather than focus on just recovery efforts which currently have a low percentage of success.
  • Kingpin locks and alarms on vehicles are just as important as locks and alarms on buildings. Plastic seals on trailer doors or loads are not a deterrent to theft; rather they are post event indicator.
  • Preloaded trucks at warehouses should be secured by a secure perimeter with a locked gate and optimally security guards/watchmen.
  • Proactive driver/employee vetting during the initial hiring process and randomly thereafter. It is surprising how many "new" employees become the victims of a theft occurrence.
  • Electronic Tracking Devices - particularly covert RFID and GPS devices embedded in the load - do have some positive impact.
  • Carrier/logistics security programs with 24 x 7 monitoring by trained transportation company personnel in the risk management area works.
  • Simple driver instructions like don’t stop a certain truck stops or within 150 miles of initial pick up have produced results. Further, trucks left idling at truck stops are a huge risk.
  • Better scrutiny of ‘brokered’ loads - who have you given the load to and what is their track record.
  • Coordination with law enforcement and involvement in the various cargo theft task forces in operation around the country.
For those reading this Newsroom article who are employees of IMUA member companies, you can access itemized MTC theft loss information at the individual loss level via the IMUA website www.imua.org members-only section; looking in the What’s New section and clicking on the motor truck cargo theft alert topic.

There are several cargo theft initiatives in various stages of development that might be of interest as follows -

  • On September 29, 2009 the Insurance Service office [ISO] and the National Insurance Crime Bureau [NICB] issued a press release announcing their intent to create a national information sharing system [Cargo Net] to combat cargo theft. By networking existing databases and adding secure reporting and analytic functions, the new system will enable more efficient, accurate and timely sharing of cargo theft information with the stake holders - theft victims; their insurance companies; law enforcement.
  • Another development is the launch in August 2009 of a new website - the National Cargo Theft Task Force [NCTTF] accessible at https://www.nationalcargothefttaskforce.org. This multi-tiered site is accessible to anyone interested in cargo theft, and in particular is the current central point of contact for law enforcement and the insurance and transportation industries.
  • A further effort is being mounted by IMUA and AIMU working with the FBI - the governmental entity responsible for implementing the cargo theft specific Uniform Crime Reporting code - and eventually Congressional parties interested in cargo theft.

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