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Cargo theft risk may be higher than thought

March 29, 2012

The risk of cargo theft in the U.S. may be a lot higher than previously thought, according to recent analysis by Cargonet, a two-year old joint venture between Verisk Analytics and the National Insurance Crime Bureau.

CargoNet, which manages a national cargo theft database and secure information sharing system for carriers, shippers, and insurers, reported 1,215 cargo theft incidents worth an estimated $130 million in the U.S. last year – up 17% from the 1,035 reported in 2010.

However, Tony Canale, Versik’s vp, noted that after publication of the 2010 cargo theft study, the number of cargo theft incidents got revised upward by 24% to 1,284, due to delayed submission of theft reports. If 2011 statistics follow the same pattern as 2010, final number of cargo theft incidents will be approximately 1,507 for last year.

The Federal Bureau of Investigation, however, believes cargo theft is a far more pervasive issue afflicting all modes of the freight transportation industry, costing some $15 billion to $30 billion per year. As a result, many insurance providers believe talking the cargo theft issue requires more comprehensive risk analysis and security work on the part of carriers and shippers alike.

Other data from the group’s report includes:

  • Of the 1,215 cargo theft incidents reported to CargoNet for 2011, 116 incidents involved base metals, 229 involved electronics, 105 involved apparel and accessories, and 200 involved prepared foodstuffs and beverages.
  • Indiana and New York joined the Top 10 list of states with the highest number of cargo theft incidents reported in 2011 – joining California, Texas, Florida, New Jersey, Illinois, Tennessee, Georgia, Pennsylvania, and North Carolina (which tied New York in 10th place on the list).
  • Those “Top 10” states are home to 85% of all reported cargo theft incidents in 2011.
  • Municipalities containing a major port continued to be targets for cargo theft activities in 2011.
  • Prepared food and beverage products became the most stolen commodity in 2011.
  • In 2011 theft of low value (less than $50,000) cargo increased while thefts of mid-value ($50,000 to $100,000) and high value (over $100,000) cargo declined.
  • The most cargo theft incidents occurred on Fridays (227 incidents), Saturdays (202), and Sundays (198) at locations such as truck stops, carrier/terminal lots, and unsecured parking lots.

Tom Mann, president of TrakLok, which provides trailer and container security systems, told Fleet Owner that maintaining secure custody of freight as it moves through the supply chain is one of the biggest challenges the transportation industry faces as deals with the threat of cargo theft.

“It’s a problem that really requires ‘layered’ security solutions,” he explained. “It’s not just about putting a lock on a trailer or container; it’s about connecting that lock to GPS and Geofencing technology so it can only be opened at origin or destination and at a certain time – with alerts sent out if the lock is opened or removed outside of those pre-set time windows or is tracked deviating from a prescribed route.”

That’s also critical because CargoNet’s research indicates that the longer the distance cargo is hauled, the higher the chance it will be stolen, noted Verisk’s Canale.

“This is because of the increased number of driver rest and refueling stops at unsecured truck stops or other locations along U.S. highways,” he said. “Also, cargo theft incidents are likely to occur within highly populated areas that contain busy container ports. This is because it is easy to resell stolen goods at higher prices due to convenient access to local grey and black marketplaces. These ports [also] make convenient locations from which to ship stolen cargo to buyers in foreign markets.”

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