The cost of cargo theft increases in the US when targeting higher value goods such as vehicles and electronics, and because inflation pushes up commodity costs.
Companies can take measures to reduce the risk of theft, including installing tracking technology and hard-locking devices, using teams of drivers and avoiding theft hotspots, experts say.
Memorial Day weekend typically sees an increase in cargo theft, with an average from 2017 to 2021 of 29 events per year during the holiday weekend.
Estimated losses from cargo thefts in the US and Canada increased to $ 19 million in the first quarter of this year, an increase of 73% over the previous year although the number of reported thefts remained unchanged at 319, according to the latest data from Jersey City, New Jersey-based Verisk Analytics Inc.’s CargoNet.
The average loss in the first quarter was $ 232,000, an increase of 68% over the same period last year and more than twice the average loss reported in the first quarter of 2020, CargoNet said in an analysis released on May 19.
Vehicles and accessories, household items and electronics were the most targeted items during the first quarter of the year, CargoNet reported.
Inflation is pushing up the price of goods, and higher value goods are focused on theft, says Keith Lewis, Scottsdale, Arizona-based vice president at CargoNet.
“People are buying more electronics, and more cars are being stolen from car transports,” said Mr. Lewis.
The significant increase in value also reflects the fact that electronics are one of the most stolen goods, says Scott Cornell, Phoenix-based transportation manager and specialist in crime and theft at Travelers Cos. Inc.
“Cargo theft is often driven by demand or shortages,” he said. From 2010 to 2020, food and drink were the first stolen goods, but there was a transition to household items in the pandemic. With the lack in components such as chips and laptops, it is “no big surprise” that electronics took first place in 2021 and also into 2022, he said.
Increased living costs have also led to an increase in the theft of consumables, says Johnny McCord, CEO and founder of Loadsure Ltd., a London-based insurtech managing general agent and Lloyd’s coverholder.
Two of its major losses last year involved the theft of truckloads of beef in Texas, Mr. McCord. One was picked up from a facility under fictitious circumstances and the other occurred when a vehicle was left unattended, Mr. McCord.
Fictitious pickup fraud involves the use of identity theft to steal cargo, either by having a legitimate carrier deliver the cargo to a selected destination or by posing as a carrier and driving away with the cargo, according to the National Insurance Crime Bureau.
“You could imagine how you could spread chilled beef for over half a million dollars so fast, how can it go away? There are organized crime groups that are so sophisticated,” McCord said.
Some of the steps companies can take to reduce the risk of theft include installing state-of-the-art locks on trailers, using a team of drivers so that a truck only stops for fuel and embedding secret tracking devices in a shipment, Mr. in Lewis.
Companies must train drivers and share information with them about hotspots for theft around the country and ensure that they do not park in so-called “red zones” within 150 miles of a pickup, said Mr. Cornell. Highly organized criminal cargo theft occurs within 200 miles of a pickup truck, according to experts.
Security protocols should be adapted based on the product, rather than the value, said Mr. Cornell.
“We teach customers to think high goals. Do not focus on value as much as you focus on how often it is targeted and where you need to defend the load you are laying on the road,” he said.
Many small and medium-sized companies rely on the carrier’s liability insurance to protect their goods during transport, which is paid out when there is a theft loss but only in case they can prove that the carrier is negligent, and then only on the tariff, Mr. in McCord. More than 60% of the goods currently transported are estimated to be under or uninsured.
The carrier’s liability policy usually regulates claims based on a tariff, which limits their liability for lost or damaged cargo to an amount per pound.
“SMEs do not have the flexibility that companies have from a cash flow perspective. A large loss of a full truck of beef without insurance can ruin a business, ”he said.