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| Photo by Jim Park |
By Deborah Lockridge, Editor
The hijacking of the Maersk Alabama by Somali pirates and the dramatic rescue of its captain may have captured the nation's attention, but the hijacking and theft of trucks and trailers is a greater threat to the U.S. economy - and to your company.
But it's not always at the top of the priority list for law enforcement. The general public tends to see it as a victimless crime, notes Susan Chandler, executive director of the American Trucking Associations' Supply Chain Security and Loss Prevention Council.
"If they have to choose between responding to a home invasion where a couple of pieces of jewelry were stolen and a trailer theft where a million dollars in cargo was stolen, which one do you think they're going to choose?"
Cargo theft is attractive to thieves because the risk is low and the payoff is high, and it's an area increasingly dominated by organized crime and gangs.
Increasingly, cargo theft is viewed not just as an issue for those who transport the goods, but as a problem that needs to be dealt with by the supply chain as a whole.
"Cargo theft is a serious, ongoing problem that is very profitable for professional thieves and very costly for organizations throughout the supply chain," says Robert Furtado, CEO of LoJack Supply Chain Integrity. "Especially in today's economic climate, companies cannot afford to pay the exorbitant price tag involved with having their cargoes stolen, which range from the actual value of the goods, to business downtime, to the loss of opportunities to market and sell seasonal goods, to the total loss of product sales."
By the Numbers
It's hard to quantify just how big a problem cargo theft is. Until recently, there was no UCR (Uniform Crime Report) code assigned to cargo theft, so for many law enforcement officers, it was classified under other types of crime. Nevertheless, loss estimates range from $10 billion to $30 billion a year or more.
The true number may be even higher, since some businesses are reluctant to report thefts out of concern for their reputations or their insurance premiums, notes Chief Eric Ives, head of the Major Theft Unit in the FBI's Criminal Investigative Division.
"Estimates are meaningless until your company has experienced a loss," says Tom Chappelear, president, corporate development, of the company Secure Trailer Lots. He notes that the value of a single stolen cargo could range from $15,000 to $3 million.
"Insurance doesn't always pay for it," notes ATA's Chandler. "And for a small operation, one lost load, and that company may be out of business."
LoJack Supply Chain Integrity recently conducted a cargo theft study, based on information the company collected and analyzed from its members in 2008 via its government-sanctioned Supply Chain-Information Sharing and Analysis Center (SC-ISAC).
The data is based on reports provided by SC-ISAC members: more than 1,500 users from nearly 600 organizations who reported a total of 353 incidents in 2008, 299 of them cargo theft. While this is only a fraction of the number of incidents nationwide (in 2007, the California Highway Patrol's Cargo Theft Interdiction Program handled 540 investigations in that state alone), it does offer some insight into trends that seem to mirror what is reported by industry watchers. Texas and Georgia saw the most incidents among the LoJack respondents, with Texas accounting for 32 percent of those reported and Georgia 25 percent.
It's no surprise that the greatest number of thefts occur on the weekends, with the LoJack numbers showing nearly half of the incidents reported - 48 percent - occurring on Saturday and Sunday.
"A lot of theft reports start when the driver drops a trailer full of whatever product and goes home for the weekend," says Nick Erdmann, sales and marketing manager, Transport Security Inc. "Lo and behold, when they come back Sunday night, the trailer's gone."
Economic Effects
There are indications that cargo theft has risen during the recession, or at least the theft of certain types of loads.
"It's hard to say if there's a trend, because the data generally lag behind the events by a couple of years - even longer when you look at official government statistics," says Bill Anderson, group director of global security for Ryder System.
There is, however, a lot of anecdotal evidence that cargo thieves are branching out from the usual high-value loads such as electronics, pharmaceuticals and cigarettes.
"What's kind of unusual right now is they're not picky," says ATA's Chandler. "They're taking anything that's not tied down - appliances, electronics, food products, beverages, clothing, building materials."
In fact, the LoJack SCI study found that food was the most-often stolen cargo in 2008, at 13 percent of the incidents reported, closely followed by pharmaceutical/medical and building supplies, both of which came in at 12 percent.
"According to our analysis of the data, food and drugs are essentials that are always a target of thieves, but especially so in a depressed economy," said Furtado.
Reasons, experts speculate, may be that the recession is causing unemployed people to turn to a life of crime - or it may be that the recession has reduced funding for cargo theft prevention and enforcement efforts. The International Cargo Security Council, for instance, suspended operations the first of this year due to the severe economic situation.
Another factor may be that as some carriers have closed down terminals due to the economy, drivers have fewer secure places to stop, says John Albrecht with Transport Security Inc. At the Truckload Carriers Association's recent Annual Safety and Security Division Conference meeting, he says, companies reported sharp spikes in cargo theft in areas where auto manufacturing and supplier plants had closed down.
"There probably has been a rise in opportunistic theft, where people are perusing truckstops and breaking into trailers to see what's in them," says Ryder's Anderson. "We have had reported incidents of trailers being broken into but nothing being stolen."
There are also some local hot spots, he says, particularly along the U.S./Mexican border, where, as drug-related violence has escalated, the supply chain may be compromised by gangs moving drugs, guns or cash across the border. In this case, he says, carriers and shippers "are not only having to protect their goods against theft, but also the breach of their supply chain security to facilitate contraband being moved across the border." There are stories, he says, of drivers being threatened, of their families being threatened, and thus coerced into participating.
Earlier this year, the Transportation Security Administration's Highway Information Sharing and Analysis Center issued an alert for trucking companies and drivers engaged in cross-border operations within Mexico or whose deliveries take them close to the Mexican border.
"Truck drivers may face an elevated risk of being a crime victim as their loads represent a potentially easy payoff for criminals," says ISAC Director Don L. Rondeau. "We're strongly urging American trucking companies and owner-operators to exercise extreme caution when making deliveries or pick-ups along the Mexican border."
Systematic and Dedicated
Despite the increase in opportunistic theft due to the economy, the main targets are still high-value loads, and the main culprits are gangs and organized crime that operate systematically.
"Organized cargo theft is not a random event," Anderson says. "They know exactly what they're after, what they've been ordered to obtain, and they do their reconnaissance. It's not a random event where they just hijack a truck and see what's inside."
Christopher Parker, technical specialist for motor fleets at Zurich Services Risk Engineering, notes that thieves most often target consumer goods, both high-value and routing commodities that can be easily re-sold at nontraditional or secondary retail outlets. However, he says, "Don't assume that if your commodity is for industrial markets, it won't be stolen. The black market in industrial commodities is alive and menacing."
Organized cargo thieves will drive to other states to do surveillance on a target. And once they've chosen the target, they will follow the truck from the point of pickup to the point where they might find it vulnerable, says ATA's Chandler. "And they are hugely patient; they will wait for hundreds of miles if necessary."
These thieves know where the goods are manufactured, they know what the trucks look like, they know the typical schedule, they know where the trucks typically stop after they pick up the load. They may even know who the drivers are.
Albrecht says there are reports of thieves breaking taillights when a trailer is leaving a distribution center, which allows them to more easily track a particular unit, and also gives them an opportunity to target the load when the driver stops to get the light fixed.
Technology Advances Help Security
"There has been an ongoing march of technology to combat cargo theft," says Ryder's Anderson. There's the side benefit of technologies that keep track of shipments and assets for customer service and productivity reasons, and there are systems that are specifically designed for supply chain security.
Anderson cites improvements in GPS and telematics, miniaturization of technology so it's easier to hide, and improvements of battery life that allow for untethered trailer tracking. For instance, he says, new tracking systems use cell phone signals in addition to satellite, so that vehicles can be tracked inside buildings. In the past, thieves quickly learned that an easy way to defeat satellite tracking devices was to simply pull the vehicle into a garage.
"Technology is definitely giving security personnel another set of eyes and ears for where their product is at all times," says Transport Security's Erdmann, "and if something were to happen, they're able to act a little bit faster on recovering it." His company offers covert tracking technology. He says they have successfully recovered or prevented about $5 million worth of product being stolen.
New covert tracking technologies allow you to hide devices in with the load itself, so if it's offloaded from the trailer, you can still track the cargo.
Skybitz has added a cargo sensor, an optical device that allows visibility for the entire length of the trailer. Real-time alerts let fleet management know when cargo is added or removed. A door sensor, which provides real-time alerts when the trailer doors are opened or closed, are another level of protection.
Bernard Borghei, executive vice president of sales and operations for Skybitz, offers the following scenario: You know, through satellite tracking, that a high-value load has been on route and is on track to arrive at its scheduled destination on time. But 30 minutes before it arrives, you get an alert that the door has been opened and cargo is being removed. "You know the trailer has not gotten to its destination and something's wrong," Borghei says. The authorities can be alerted, giving you a much better chance of the police getting there quickly and thwarting the criminal activity.
Skybitz also offers an RFID system that can send an alert if a trailer is connect to the wrong tractor.
Geofencing adds another level of visibility of your assets. It's basically the ability to take a specific location and draw an imaginary "fence" around it - as small as 10 meters across. If the truck crosses that virtual line, an alert is sent. Depending on how you have it set up, the alert may simply be to the dispatcher's regular tracking system, or it could involve an alert to a PDA or cell phone. A quick check with the driver can confirm whether it's the driver moving when he's not supposed to be, or something more sinister.
You may get notification when the asset enters the area, or when it leaves it. If dispatch gets a notification that doesn't match the schedule, it could be a sign that something's wrong. Skybitz offers a lockdown option where, through a web-based system, you can set it for real-time alerts to a cell phone or PDA if the asset moves during a specific time, say between 7 p.m. to 7 a.m.
Taking it a step further, Cadec recently announced what it says is the first software-based remote-engine shutdown technology as part of a new ProTecht line of optional safety modules for its PowerVue Web-based platform.
When notified via a covert signal from the driver or by an alert that the vehicle has strayed from its geofenced area or off of the designated route, authorized security personnel can trigger the remote engine shutdown via the wireless communications directly to the engine ECM. The software slows and then stops a vehicle remotely in a safe, controlled manner.
"Instead of just identifying where it is, we can shut it down and still identify where that cargo may be," says Frank Moreno, Cadec vice president of marketing.
Moreno says another technology trend is driver authentication in the cab. Cadec's Remote Engine Shutdown module also includes On-Board Driver Authentication to prevent unauthorized parties from starting or operating a vehicle.
"We've gone through the first step with a user name and password capability in the onboard computer system," Moreno says. "If the company desires, they can have the engine not turn on until the driver validates. In the future, you could see that go into biometrics, like fingerprints."
Back to Basics
While technology is a valuable tool to be used in your security program, it's no substitute for the basics. Experts recommend a layered approach to theft protection, which includes not only high-tech tracking systems, but also basic locks and immobilization devices such as wheel locks, fuel shut-offs, air cuff locks and ignition locks.
Perhaps most important is maintaining basic security policies. The best technology and the most comprehensive plans won't protect you if those plans aren't consistently executed.
"Despite all the advances in technology, it really comes down to execution, to attention to detail," says Ryder's Anderson. "Most trucking or logistics networks have a variety of security policies and practices, and what you often find when investigating a theft is that a few steps were missed. The goods weren't counted when they were loaded, or the seal wasn't checked when the truck arrived at the distribution center."
ATA's Chandler agrees. "For those that are successful at keeping cargo theft at bay, it's still really the tried and true principles that work again and again and again. Things like don't leave the truck unattended, don't leave the keys in the truck. When I look at those that have managed to get through this economy without a single theft, they're reinforcing those principles."
Among the basic procedures that can make a big difference in security:
• Counting or weighing goods at both the loading and the unloading to make sure they match.
• When the truck is sealed, someone should inspect the seal to make sure it was properly applied and the information on the seal included in the records.
• When using driver teams, one should always stay with the truck.
• Drivers should stop in safe locations.
• When a driver returns to his truck, he needs to check the seal and the cargo doors for any signs of tampering.
• When the goods arrive, someone should verify that the seal's intact and that the doors haven't been tampered with.
• Keep informed about hot-spot areas and take extra precautions in those areas, such as using driver teams, teaming up two trucks together, and making sure drivers use secure parking in those areas.
• Make sure drivers are trained to avoid chatting about their load, their route or other sensitive information on the CB or at the truckstop.
Everyone in the company, not just drivers, needs to be aware of basic security procedures.
"There have been some warehouse burglaries where the thieves contacted administrative personnel and said they were the alarm company, and the personnel very willingly gave up their code thinking they were talking with the alarm company," Erdmann says. "The thief was able to have carte blanche access to the warehouse."
Anderson says this is something that frustrates security professionals and law enforcement officials. "The procedures are common sense, and everyone involved would say it's doable. But somewhere along the line they stop checking the seals, they allow drivers to cut them off and hand them to dispatch. Even procedures around controlling information - eventually all of that, over time, begins to deteriorate, and gaps start to open up in your supply chain security."
Secure Parking
Vehicles and cargoes obviously are most at risk when they are parked. "One of our customer's security directors, his favorite quote is, 'Freight at rest is freight at risk," says Nick Erdmann, sales and marketing manager for Transport Security Inc.
According to the LoJack study, 31 percent of 2008 cargo thefts were at truckstops, 25 percent at parking lots (including drop yards), 15 percent at facilities, and 11 percent while parked on the street.
"The bad guys are always looking for opportunities," says John Monetta, a senior risk management consultant for insurance company Zurich Services' Risk Engineering. "Rest stops are particularly a high-risk area, but we also see many instances where drivers will stop overnight en route to their destination and leave their rig parked at a relative's or friend's property."
Another problem situation is when a driver arrives at his unloading destination late on a Friday afternoon after the facility has closed for the weekend and simply drops the trailer there. "Not surprisingly, the load turns up missing come Monday morning," Monetta says.
In addition to GPS tracking devices, he says, the company strongly recommends that no "unauthorized" stops in unsecure areas be made en route.
Some companies that transport high-value freight combat this by using driver teams and require one driver to be with the truck at all times. Or you may want to implement or enforce a policy where trailers are not allowed to be dropped except in a secure facility.
Several services have been developed in recent years to try to help provide secure parking, especially for dropped trailers:
• Secure Trailer Lots provides trailer parking services in 12 locations, where multiple carriers use the same lot.
• Terminal Exchange Services specializes on providing trucking companies with secure trailer parking and drop-lot facilities in an expanding secure trailer parking network with more than 60 locations nationwide.
• National TruckPorts, offers secure parking along with renting out customizable maintenance bays at two locations in the Dallas area and plans to expand nationwide.
Stay Informed
'Those that choose to be well-connected know when thefts have happened and where, so they can put out alerts to their drivers," says Susan Chandler, executive director of the American Trucking Associations' Supply Chain Security and Loss Prevention Council.
There are a number of regional cargo theft task forces in hot-spot areas around the country. If you have operations in one of these areas, it's a good idea to get involved. Many of these task forces include the efforts of both federal and local law enforcement, working with the trucking industry to prevent cargo theft and to apprehend cargo thieves.
"I think the key for a lot of companies is to get involved with those task forces," says Nick Erdmann, sales and marketing manager for Transport Security Inc. "Most of them have meetings on a regular basis to get people in the area together and exchange information, which is key in combating cargo theft and trailer theft and warehouse theft."
New task forces are reportedly in the works in Ohio and Georgia. (Florida's done such a good job with its task force, the thinking is, that the thieves just moved up the highway to neighboring Georgia.)
Cargo CATS (Los Angeles County Sheriff's Department)
www.cargocats.us
(310) 603-3137
Chicago Midwest Cargo Theft Initiative
cargo_theft@isp.state.il.us
Memphis Auto/Cargo Theft Task Force
(901) 680-0799
sstfmemphis@yahoo.com
Miami-Dade Cargo Theft Task Force (TOMCATS)
http://www.miamidade.gov/mdpd/BureausDivisions/bureau_ Robbery.asp
(305) 471-3400
cargotheft@mdpd.com
New Jersey State Police Cargo Theft Unit
http://www.state.nj.us/njsp/divorg/invest/cargo-theft-unit.html
(732) 548-7153
Protecting Your Fuel
When diesel fuel prices skyrocketed last year, so did interest in ways to keep fuel from being siphoned out of the truck's tanks. For instance, Kenworth now offers a metal anti-siphoning device standard on all its Class 8 trucks specified with round diesel fuel tanks. Paccar Parts introduced the AcraFit aftermarket anti-siphon device, which is installed in the neck of the fuel tank to keep thieves from reaching the diesel fuel with anything larger than a quarter-inch tube. Ryder Fleet Products is just one company offering a selection of anti-syphon devices.
TruckProtect North America is one company that's been very successful selling its anti-siphon fuel security device worldwide. It's been well-received in Europe, where diesel prices are in the $8 per gallon stratosphere.
The company brought the product to the United States last year as fuel prices spiked. And even though prices are still hovering at less than half the top price last year, there's every reason to believe they'll trend back up when the economy comes back.
"When we began to develop the Neck-It! range, we spent a lot of time talking to truck operators in order to find out precisely what they needed from an anti-siphon device," explains Richard Fowler, TruckProtect's technical director. "We focused on security, fitting, filling and transferability, and produced 80 prototypes before we were satisfied that we had a product that was fit for market."
When looking for an anti-siphon device, Fowler says, the size of the openings is key. Neck-It, for instance, will not allow any tube of a diameter over a quarter-inch to pass through its barrier. Many other devices will allow a half-inch tube to be used to remove diesel, Fowler says.
"This may not sound like a big difference, but in practical terms, it's enormous," he says. "A half-inch tube will allow a gallon of diesel to be siphoned in under 30 seconds. It would take over 14 minutes to remove the same amount from a diesel tank protected by Neck-It."
From the June 2009 issue of Heavy Duty Trucking.
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