Battling back against cargo theft

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Cargo theft should be a major worry for truckers because it is most often perpetrated by organized crime since it is low risk, high reward form of theft. We know that distribution over the Internet makes it possible to sell most any product, virtually undetected. So, no one is safe from cargo theft.” –Robert Furtado, CEO, LoJack Supply Chain Integrity.

Cargo theft is one of the 900 pound elephants sitting not-so-silently in trucking’s corner of the world – an elephant many carriers (and shippers for that matter) try to ignore as best as they possibly can. That’s not to suggest they try to deny the existence of cargo theft altogether; it’s just that the collateral damage from cargo theft, such as higher insurance premiums and loss of reputation, is almost as bad if not worse than the financial hit from the theft itself.

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As a result, the size and scope of the cargo theft problem in trucking – and across global supply chains, for that matter – is hazy at best. Three years ago, the Federal Bureau of Investigation (FBI) hazarded a guess, stating that cargo theft cost the U.S. $15 billion to $30 billion annually – yet in the same breath cautioned that the true measure of those losses may be even higher, since many businesses are reluctant to report thefts out of concern for their reputations or insurance premiums.

Now comes word from a recent study of cargo theft trends – at least from those companies willing to report them – that cargo thieves are getting more organized. According to LoJack Supply Chain Integrity in its second quarter “cargo theft bulletin” this year, an increasing number of thefts (34 incidents) occurred at carrier facilities, including secured drop yards – an increase of more than 300% percent compared to the first quarter of 2009.

“The fact that thieves are stealing goods increasingly from secured areas is further proof that ‘cargo at rest is cargo at risk,’ even if the cargo is located in an area with some measures of physical security,” said Robert Furtado, CEO of LoJack SCI.

The company’s second quarter bulletin – based on a total of 221 incidents reported to date from the 650 members of LoJack SCI’s Supply Chain-Information Sharing and Analysis Center (SC-ISAC) – also revealed that vehicles and their cargoes are at rest for a shorter period of time before they are stolen. For example, in the second quarter this year, LoJack SCI identified 19 incidents that occurred in less than four hours time – eight of which had been parked for less than one hour.

“This theft trend tells us that these loads were under surveillance and had been targeted from their point of origin, implying that these criminal acts were the results of very specific planning at the hands of organized thieves,” Furtado added.

Does this mean trucking – and the freight community as a whole – is starting to lose ground in the battle against cargo thieves? Actually, no; and in fact, the heat is getting tuned up on cargo thieves significantly, in part due to more attention from law enforcement and the willingness of the trucking industry to not only share data but become active participants in the cargo theft conflict.

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For starters, the FBI is gearing up to track cargo theft as a specific type of crime – following the passage in 2005 of a law by Congress that mandates the development and addition of a cargo theft category to the FBI’s Uniform Crime Reporting (UCR) system. Though this category will not be fully operational for a year or two, the quantitative numbers gleaned from UCR reporting – identifying cargo thefts by product category, location, and estimated loss – should help fill in the “big picture” details we’ve been lacking for many years.

This is going to substantially help ongoing efforts to battle cargo crime – a battle that’s going on for a long time now. For example, the Los Angeles county Sherriff’s department created Cargo Criminal Apprehension Team – known by the moniker “Cargo CATs” – back in 1990. But in recent years, the freight industry – both carriers and shippers alike – have been providing crucial “fire support” for law enforcement’s efforts, and that’s getting results.

I talked recently to Walt Fountain, director of enterprise security at TL carrier Schneider National, about this hand-in-glove effort by the truckers and badges to jointly knock the wind out of cargo thieves and he related some good stories revealing how such partnerships work.

About nine months ago, one of Schneider’s drivers pulled into a California truckstop for a quick break. Locking his truck, he went in for a cup of coffee … and came out to find his entire rig missing, He quickly phone Schneider’s 24/7 security center to report his rig stolen – providing his location, license number and other pertinent information about his vehicle. They in turn called the California Highway Patrol’s (CHP) Cargo Theft Interdiction Program or CTIP and within minutes, CHP patrol officers and related personnel were alerted to the theft.

This information proved vital as it allowed a highway camera operator to spot the Schneider truck in question some four hours after the crime occurred (the day-glo orange color of Schneider’s trucks also proving very helpful here, noted Fountain). CHP closed in on the truck … but waited, allowing the vehicle to reach its final destination – a warehouse stocked with stolen goods and staffed by a slew of expert cargo thieves. The CHP pounced and bagged the whole lot – all due to truck driver’s fast dialing and the transfer of vital information quickly to law enforcement.

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This partnership also works in reverse, too, noted Fountain (seen here at right). In another case, a CHP officer on patrol noticed a Schneider truck in his area parked at a warehouse – but he’d never before seen a Schneider truck stay in his area. His sixth sense tripped, the officer phoned it in – could someone find out if it is supposed to be here? Schneider’s security center again got the call and – as it’s plugged directly into the company’s operation center – quickly determined that truck shouldn’t be in that location. Boom! Another cargo theft bust goes down.

“It all comes down to the rapid exchange of information between us and law enforcement; and also among our personnel internally,” Fountain told me. “It’s also about maintaining security discipline on our side – making sure our drivers and other personnel constantly follow the correct procedure to secure cargo in our care. It also means keeping our drivers in the loop, too; it’s up to us to tell them where the ‘hot spots’ are in term of cargo thefts.”

The FBI is also promoting closer ties between the law enforcement community and freight industry in order to make cargo crime a far more difficult enterprise to engage in. I sent some questions to the FBI about what things the trucking community could do to help the agency battle cargo theft and got some suggestions from Ron Koziol, assistant section chief-violent crime section of the FBI’s criminal investigative division:

Timely reporting: “The [trucking] industry should work to ensure that the cargo thefts are reported to the law enforcement as soon as possible,” said Koziol. That means in minutes or hours, not days.

Details and points of contact: “Information such as a complete description of the tractor/trailer, the license plate and vehicle identification numbers (VINs) and a complete description of the lost cargo contents are important,” he added. “Regarding cargo contents, many times identifying numbers, such as bar codes and inventory control numbers are available or even specific identifying characteristics unique to a product or a package would be helpful. Also, a point of contact with the company’s security or loss prevention personnel is important.”

Training personnel: Training regarding different types of thefts, practical and sound investigative techniques, and the methods of operation utilized by the theft groups should be regularly conducted. “A review of security procedures and operations within the whole supply chain is something that many companies now perform regularly to evaluate the risks,” Koziol noted.

Background investigations: These are critical, both for current and future employees within the supply chain, especially where risk of losses is heightened or where the value of the cargo is substantial is a recommended normal operating procedure, he said.

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Work together: “Industry and law enforcement must maintain effective communication and liaison,” Koziol stressed. “Even though property crimes may be considered a low priority for law enforcement and prosecutors, it is recognized that the criminal groups involved in these crimes have a great effect on the economic losses to the victim companies and joint efforts amongst the participants is key to our successes.”

Keep learning and sharing: Finally, the trucking industry should continue to promote and support participation in national organizations and regional organizations, working groups, and training sessions which brings together industry partners and law enforcement to understand crime issues, trends and new concepts.

“Through liaison contacts and working groups with the private sector, trends and intelligence are shared to better coordinate activities and understand the crime problem,” noted Koziol. “These steps will help law enforcement and industry in better understanding the crime problem, the trends, and the methods of operation.”

What's Trucks at Work?

Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry.

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