For many years, the issue of cargo theft flew under the radar in the trucking industry. For many reasons — most of them quite obvious and understandable — carriers were reluctant to talk about it.
Estimated by the Federal Bureau of Investigation to be a $15 billion to $30 billion annual problem, up to 80% of cargo thefts may be “inside jobs,” committed with the complicity of employees — and reporting such losses can lead to significantly increased insurance costs, if not the outright loss of business.
So many carriers covered up cargo theft as best they could, compensating shippers for their purloined freight, redoubling their security efforts, then trying as much as possible not to talk about it. That attitude, however, is changing — and changing rapidly — as carriers of all sizes realize cargo theft is a big problem. More sophisticated criminals continue to get into the “business” because it has become easier to fence stolen goods and the risk of jail time and other penalties remain absurdly low.
“If they get caught, it's unlikely that they'll get more than probation if convicted. They'd be lucky to get six months of jail time,” Walt Fountain, director of enterprise security for Schneider National, told me recently.
Yet he also said shippers and carriers alike are paying a lot more attention to the issue of cargo theft. That's because risk of theft has increased over the last two years across the supply chain, largely because the value of individual loads continues to climb.
“One of the reasons cargo theft is ‘low risk/high reward’ is that more product value than ever before can go into the box,” Fountain said. “It's relatively easy now for individual loads to contain $1 million worth of cargo.”
The Internet has made it easier than ever to fence such goods fast and without leaving a trace, explained Robert Furtado, CEO of LoJack/SCI, a security system provider. “We know that distribution over the Internet makes it possible to sell almost any product, virtually undetected,” he told me.
But it's not all gloom and doom. Schneider's Fountain pointed out that not only are most shippers much more open and willing to discuss cargo theft prevention efforts, other modes are willing to do so as well — even cooperate with erstwhile competitors as needed to lower the risk of theft.
“More customers are engaging with us and are willing to work with us as a team to manage their risks,” Fountain said. “We'll work with railroads and even other trucking carriers to reduce the risk of cargo theft because it is an issue that affects all of us.”
Part of the challenge is that every customer's supply chain is unique in its own way, making a single, standard method of attack against cargo thieves virtually impossible, he stressed. Yet by working together as equals, and thereby synchronizing their efforts to combat cargo crime, shippers and transportation providers find they are winning more and more battles than before, explained Fountain.
“Management of risk becomes easier when you are more open about the problem and engage in constructive teamwork,” he told me. “We're absolutely stepping up our game to fight cargo thieves — and there's been more collaboration and cooperation in this effort over the last three years among all the parties involved in transportation. We don't ‘compete’ when it comes to preventing cargo theft. We're all looking for opportunities to help one another. That's the way we win.”