(Information provided by FreightWatch International’s 2011 US Cargo Theft Report)
“Okay guys. You know the plan right? We wait for dark and then move in. I’ve already scouted the area and the truck is in an unsecure lot. Really…it’s just sitting begging to be taken and due to the holiday weekend, no one will even notice it missing until Monday. By then we will be long gone!”
Unfortunately, this scenario happens all the time and is becoming all the more common.
According to FreightWatch International’s US Cargo Theft Report released last month, cargo theft rose to 974 incidents in 2011, breaking a new record and surpassing 2010 numbers by 8.3% with nearly 3 thefts per day and 81 thefts a month. And, like the case above, over half of these thefts (63%) occurred in unsecured areas. Theft more than doubled on holidays, averaging 4.3 thefts each day, with Labor Day accounting for the most holiday thefts at 13, followed by Thanksgiving and the Fourth of July.
Holiday theft is popular since many companies are closed and trucks sit over the long break. And, like Road Scholar Transport President Jim Barrett and Walt Beadling (Managing Partner for the Cargo Security Alliance) explain in their presentation on cargo security (available at http://www.roadscholar.com/university.php), “cargo at rest is cargo at risk,” which is why Road Scholar never leaves their trucks unattended in high-risk areas lacking security surveillance.
With this in mind, it comes as no surprise that Saturday and Sunday accounted for the greatest number of thefts due to the weekend.
Out of the 974 incidents on record, 853 of them (or 87.5%) were full-truckloads or containers. 38 of these (4% total) were caused by deception resulting from false trucking companies, and although the percentage seems small, this problem is being more and more common.
Take, for example, last May when over 25,000 pounds of king crab meat, valued at $400,000, was reported stolen after it never made it to its destination. Upon further investigation, police discovered that a man had “dummied up documents from a fake motor carrier,” picking up the load from a Los Angeles warehouse and never delivering it to its Seattle destination (http://www.landlinemag.com/todays_news/Daily/2011/Jun11/053011/060111-06.shtml).
How are thieves securing these loads in the first place? Many times it is through brokers who post their loads online, and who also do not always vet out drivers beforehand handing them your shipment.
Let’s look at a case last March where a fraudulent trucking company utilized a number of brokers to make away with several shipments.
E&A Transport Express quickly registered with the Federal Motor Carrier Safety Administration and began to search out brokers listing produce loads, posing as a Miami-based trucking company. They managed to secure eight loads of produce, a high target at the time due to their rising prices, making away with close to $300,000, not to mention creating a widespread concern over the reselling of potentially contaminated products.
But something like this would never happen to you because you take the caution of vetting out carriers before trusting them with your freight right?
Graph provided by FreightWatch International’s 2011 US Cargo Theft Report
Although 2011 marked a new record in cargo theft incidents, “the average value per incident dropped substantially by $149,500 or 31%,” compared to 2010, which ranked in at an average of $319,000 per incident.
The type of commodity stolen last year has changed as well, which could account for the decrease in value 2011 experienced.
Graph provided by FreightWatch International’s 2011 US Cargo Theft Report
Food/drinks were still the greatest target with 221 of 974 thefts and while that particular commodity remains high, the number of stolen electronics continues to decline. Looking at a 5-year span, the percent of stolen commodities that were electronics decreased from 38% to 17%.
Whereas pharmaceuticals each year accounted for the most valuable theft, electronics held a loss $413,000 greater than pharmaceuticals last year.
Looking back at 2010, one can see why the valued loss of pharmaceutical shipments was so high. During this year, pharmaceuticals experienced an average of 3.8 million per incident loss. At the same time, three losses during this year were over $10 million in value. The greatest of these being the Eli Lilly occurrence, “thought to be one of the largest pharmaceutical thefts in history” (http://www.nytimes.com/2010/04/01/opinion/01eban.html).
In March 2010, thieves stole over $75 million worth the psychiatric drugs from an Eli Lilly warehouse. As the case unveiled, “Security was so lax that they pulled their tractor-trailer directly up to the loading dock and parked there for hours. Security cameras recorded the image of the truck, but no one was monitoring the cameras. The burglars drilled a hole in the tar roof and slid down ropes into the warehouse. Once inside, they disabled an alarm panel with a sledgehammer. Another alarm went off at some point during the burglary, say those familiar with the break-in. Staff at ADT, which monitored the system, called the first name listed on Lilly’s contact sheet and left a message. By the time a Lilly employee responded, the burglars were gone” (http://features.blogs.fortune.cnn.com/2011/03/31/drug-theft-goes-big/)
These events have added to the FDA’s attempt to seek more power and stricter regulation in securing the pharmaceutical supply chain, and with stronger security regulations and greater responsibility, manufacturers are turning towards more secure carriers to transport their freight.
But although a company can take preventative measures to drastically reduce the risk of their freight being stolen, cargo theft is a problem that will never go away. Take the recent theft of America’s largest furniture retailer, Rooms to Go Furniture.
Last month, a driver approached Rooms to Go’s lot around midnight, where he was let in by one of the company’s employees. As First Coast News explains, the driver is believed to have then disabled the gate so that it would remain open for him to make his exit. Surveillance cameras recorded the driver loading $7,000 worth the furniture into the trailer, making away a few hours later. The trailer was later found on the side of a road with the unknown driver, tractor, and cargo still missing (http://www.firstcoastnews.com/news/crimestoppers/article/237052/69/Trailer-Filled-With-Furniture-Stolen-Contents-Removed).
What could be the worst part of theft is not the loss of the freight, being that the production cost is always much less than the street value as well as most freight being insured, but rather the negative attention to the brand. Do you want your company’s name making the headlines, “ABC Company Issues Recall After Truckload Theft?” More than likely, that may be the case.
How often do you vet out carriers before allowing them to transport your freight?
<50% of the time
>50% of the time
Never
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