Last November, cargo thieves made off with a truckload of pharmaceuticals worth several million dollars.
The plain white tractor-trailer was taken from a rest area in Florence, Ky., while its driver was away, using the facilities, for only about 15 minutes. The thieves got into the truck by breaking the peep window on the passenger door.
In May, a trucker disappeared with a refrigerated load of Russian king crab he picked up in Los Angeles for delivery in Seattle. The cargo could wholesale for $400,000. The trucker's documents and the trucking company apparently were bogus.
In late March, a gang of thieves stole six truckloads of tomatoes and another of cucumbers from Florida growers. They also stole a load of frozen meat. Total value of the illegal haul: about $300,000. The criminals appeared to have set up a bogus trucking company with the intention of stealing loads of produce and other goods
"There has been a large increase in both tractor-trailer and cargo theft," says John Albrecht, vice president of Transport Security, which sells locks and other cargo security devices. "A tractor and trailer is a moving warehouse, but you can't put closed circuit TV on it, you can't post a security guard."
'They'll steal anything'
It's not just high-value loads like electronics or pharmaceuticals, Albrecht notes. He's seen bottled water being taken. You see someone hawking water on the street? It could be stolen.
"They'll steal anything," agrees Walt Fountain, Schneider National's director of enterprise security. "A lot of the more common items like toilet paper, diapers, you'll see some of those products stolen, then sold through small independent groceries in large urban areas."
The National Retail Federation, in its annual organized crime survey, asked about thefts outside of store locations. Nearly half of all respondents said they had been a victim of cargo theft, most commonly while the goods were en route from the distribution center to the store.
Digging into the data
Historically it's been tough to tell exactly how bad cargo crime really is, and therefore hard to get law enforcement and prosecutors to devote resources to it. The good news is, unlike in the past, the FBI now has uniform crime reporting (UCR) codes for cargo theft. But some states don't report those separate codes on a federal level - only the overall category of "theft."
Several private companies have been attempting to do a better job of collecting cargo crime statistics, with the belief that understanding the problem is a key part of fighting it.
In three studies of 2010 incidents, electronics and food were the most commonly targeted cargoes:
- CargoNet, a division of Verisk's ISO Crime Analytics unit, found 1,035 cargo thefts in 2010 compared to 2009's 700. Electronics accounted for 17%, followed by prepared foodstuffs and beverages at 13%.
- The National Insurance Crime Bureau studied 747 incidents with a loss value of $171 million. It found electronics, food and clothing were the most common commodities targeted. All of these are relatively easy for criminals to sell, sometimes online, at flea markets, and overseas. While electronics were the number one item, the dollar value of pharmaceuticals was greater.
- FreightWatch International counted 899 incidents, the most it ever recorded. Foods and beverages comprised the single main target, accounting for 21% of total theft activity with an average value of $125,000. Most commonly stolen were basic foods like rice, sugar, tea and coffee, along with meats and canned and bottled drinks. Electronics, including televisions, cell phones, and computers and laptop hardware, were 19% of the thefts, with an average loss of $512,000.
In a FreightWatch survey of more than 200 senior managers responsible for supply chain security, there was overwhelming agreement that cargo theft has increased over the past five years, and also that it will continue to rise. In fact, 80% listed large-scale cargo theft as one of the greatest challenges over the next five years - compared to only 11% that listed terrorism.
Cargo theft is an attractive crime because it has a lot of potential for profit, but not much risk of getting caught or severely punished. "It's a property crime, so a lot of times it doesn't get a lot of attention," explains Steve Covey, who heads up the Midwest Cargo Theft Initiative in Chicago.
Covey and other industry experts say that while opportunistic theft still exists, they are seeing more organized cargo theft operations. He describes organized criminal groups that travel across the country, many based out of cargo-theft hotbeds such as Miami or Memphis. It's believed that some groups are sending some of their profits to terrorism organizations overseas, Covey says. Even city gangs, once content to grab half a pallet out of a trailer, throw it into a van and take off, now have members who are legitimately employed as truck drivers by day who moonlight stealing trailers.
"The organized groups, they target their product," Covey explains. "If you have an electronics warehouse, they may spend a couple weeks staking a place out, or they may target the first trailer that comes out of the facility and follow it, sometimes a few hundred miles."
Schneider's Fountain says he's seen the same trend toward the targeting of specific loads. "It's almost a business plan approach to cargo theft. They know what they want, and they make the effort to get it."
He's also seen more movement into big facilities, warehouses, and carrier yards.
"Seems to me that it's less of the snatch-and-grab garbage where they'd pop the back door and unload what they could. Now almost not a month goes by without a driver reporting being surveilled, being tailed."
Albrecht says thieves will go so far as to paint a big "X" on a trailer they want to target, or break out a trailer's lights so the driver is forced to stop to deal with it when it gets dark, at which point they move in.
There are also more "fraudulent pickups," where a crooked driver or company impersonates a legitimate carrier and secures a contract to transport cargo. It then steals the cargo, often with no trace of the driver or trucking company.
Cargo theft can happen anywhere at any time, but it's more likely to happen at truckstops, parking lots, warehouses and port cities, reports the NICB. Southern California port cities are hotbeds, followed by the Dallas-Fort Worth area in Texas. The Memphis, Tenn., area is also hot. Other cargo-danger states last year were Florida, Georgia and Illinois.
Security experts have helped us identify nine steps trucking companies can take to help prevent cargo theft:
1. Screen employees
Conduct a background check of drivers, warehouse employees, and anyone who has access to shipment information and other logistics details. Many cargo thefts are "inside jobs."
At Schneider, Fountain does criminal and MVR checks on drivers and other employees. "It's not going to catch everyone, but it gives you an indication of the professionalism and character," he says. "Many of the issues we have is they lack discipline."
Unsafe drivers, he says, "are probably not your conscientious, disciplined, professional drivers," and are more likely to slip up on security protocols.
The carrier also does hair follicle testing for drugs. "We've found that to be very valuable for keeping habitual drug users out of our driver pool," Fountain says. "Certainly anecdotally, those who use drugs are more likely to break other laws."
2. Train employees
Provide security training for all employees, and educate truck drivers in how to prevent cargo theft and hijacking. NICB experts say that a driver who knows, understands and follows security tenets is less likely to have his or her truck targeted for theft.
"Once you know how cargo theft happens, you know what to look for," explains Bill Anderson, director of security for Ryder.
For instance, drivers should park in well-lit areas, preferably near the front of the truckstop near the facilities rather than in a quiet back row. They should check to make sure load seals are intact during pre-trip inspections and during stops en route. Drivers should learn to watch for a vehicle tailing them and what to do if they spot one. And they should know the required procedure if a theft happens.
Training should cover things as simple as not leaving the keys in the truck. In Brooklyn earlier this year, a thief stole a $50,000 tractor-trailer packed with $200,000 in beef. Making a delivery at 3:30 a.m., the driver parked her truck with the key in the ignition. She returned 10 minutes later to find it gone.
Drivers should not discuss a load or where it's going on the CB or at truck stops. Controlling information is key, Anderson says. "It can be a seemingly innocuous conversation that somebody has over a cup of coffee, which, when combined with other information, reveals a lot about the supply chain."
Fountain says driver training has given Schneider "the biggest bang for our buck," both during new-hire onboarding and quarterly "sustainment" training. "It does take some time, but it's time well spent."
3. Practice routing and in-transit security
Thieves routinely wait outside known shopping points, such as plants, warehouses, and distribution centers. They follow trucks as they leave, wait for drivers to stop, then grab the cargo, often in less than five minutes. Counter this by instructing drivers to go at least 200 miles or four hours before stopping, and then use secured lots. And they should avoid cargo-theft hot spots.
"We'll set up a 'red zone' around pickup and delivery areas for our high-value freight," asking drivers not to stop within 200 to 250 miles from the pickup, says Schneider's Fountain. "So they arrive at the shipper all fueled up and ready to go, and plan their trip without having to stop in that red zone for DOT breaks or fuel."
While this tactic takes some planning and communicating with drivers beforehand, it's relatively inexpensive and something the smallest fleet or owner-operator can do.