The cost of cargo theft is massive. Its ripple effects go beyond the cost of the stolen goods. To give you an idea of how bad it is, SupplyChainBrain references a study on stolen digital cameras worth $200,000. It would take 10 times the number of sales, or $2 million, to offset the loss.
That's because the supply chain must factor expedited shipping to replace the stolen goods plus another round of paying taxes and duties. Then there's the side effect you can't put a number on. That's when the brand takes a hit. In some cases, the company passes the costs to the customer by raising prices. This affects customer trust and loyalty.
Cargo theft goes largely underreported because there's no one system to track it all. Of those that do, they don't always categorize theft in the same way. Besides that, many companies avoid reporting theft because they don't want their insurance premiums to increase.
They also want to avoid the bad publicity that leads people to think they're not concerned about protecting their products. Any negative news hurts the brand's reputation and consumer confidence.
By the looks of it, cargo theft is rampant in the U.S. and Canada. Thieves know that tractor-trailers can contain a lot of merchandise with good resale value. It's easy because all they have to do is drive and get away quickly. CBC Canada reveals the Insurance Bureau of Canada reports an estimated $5 billion worth of cargo theft occurs in Canada every year. In 2018, there were a reported 621 load thefts. Ontario’s Peel Region holds the #2 spot in North American jurisdictions with the highest number of cargo thefts. California comes in first.
In its most recent analysis of cargo theft, CargoNet says the average value per cargo theft was more than $150,000 in 2019. The second quarter of 2019 had 308 recorded supply chain risk events in the U.S. and Canada. Half of those consisted of theft of one or more vehicles. The other half were thefts or a chain-of-custody issue with the shipment.
A detective with the cargo theft unit from Peel Region in Greater Toronto Area shares startling statistics in a Global News article. In 2015, their unit received 98 calls of reported cargo theft, 175 reports of stolen tractors, and 59 stolen trailers without cargo.
Three years later, those numbers went up to a whopping 341 reported cargo thefts, 261 stolen tractors, and 86 stolen empty trailers. These numbers only look at reported cases. It's likely to be higher as companies want to avoid increased insurance costs.
ABC10 has a story about three military families in California who were in the process of relocating. Someone stole a tractor-trailer with $100,000 worth of their belongings. Two weeks after the theft, the police recovered 90 percent of what was stolen. However, 14 firearms remain missing. It's concerning as those guns could be used in a crime.
Thieves often steal to resell products. Those stolen products have the company's brand on them. It's possible the thieves may have tampered with the products before unsuspecting customers buy them. If the product turns out to be defective, that's another strike for the brand. Customers may post reviews or badmouth the company's products on social media.
One approach to cargo theft is a crime of opportunity. Opportunists see a tractor with an attached trailer and hotwire it, believing they could get something they can resell. They'll watch for running trucks left unattended and cargo left alone on the dock. Sometimes they'll steal a semi-truck and then use it for days or weeks later to steal a trailer.
Then there's organized crime, the most sophisticated of all. They have the resources to plan complex thefts such as fictitious pick-ups. This is when they create a fake ID or set up a fake business for rerouting and stealing cargo. These tactics dupe shippers and carriers into giving thieves the cargo instead of the actual carrier.
The aforementioned CBC Canada story is an example of this. The criminals stole a tractor that resembles the one from a known brand. They changed out the decals on the tractor and trailer to match the trucking company. The thieves forged shipping invoices and driver I.D. cards. They rolled up to a distribution warehouse and left with a trailer full of chicken.
Organized crime rings will monitor shippers or consignees. They learn driver routes and stops. After they collect the information, they pose as a legitimate carrier, steal the trailer or cargo left unattended, or hijack the vehicle.
Thieves also steal smaller, easy-to-move items that are in demand. They'll even take consumables like $100,000 worth of blueberries stolen in Canada. Thieves resell consumables to a food distribution network that feeds into restaurants, farmers markets, or a corner store.
Another tactic thieves use is taking advantage of approaching deadlines. These tend to occur on Friday afternoons or at the end of the weekend. In a rush to meet deadlines, thieves expect workers to make mistakes.
Finally, there's the inside job. Employees work with thieves by giving them the details to commit the theft.
Experts advise not to have identifying information on the contents of the package or tractor-trailer. Of course, this won't stop opportunists who think taking a trailer is worth the risk. One option is to avoid leaving filled trailers overnight. Pack the trailer on the day it will depart.
The Global News story quotes a representative of a trucking company who says that many tend to cut corners when it comes to security. In doing so, they drive up the costs.
Some try adding security personnel or security guards at warehouses and distribution centers. Unfortunately, this also increases operating costs. There are better, more cost-effective ways to stop cargo theft, like implementing a shipment process and video surveillance.
When implementing a shipment process, require trucking companies to provide information at least 24 hours before pick-up. The information would include the name of the driver and carrier, truck number, and insurance information.
Before releasing a load, one company takes photos of the truck, driver, and bill of lading while collecting the driver's fingerprints. You could add GPS to the pallets and containers to track them. However, be aware some thieves block the technology with a GPS jammer.
Verify identities and research the company and their contact information on the Internet. If you're in the U.S., check with the Federal Motor Carrier Safety Administration (FMSCA). To prevent inside jobs, require background checks on all new employees. Another way to prevent an outside partner from breaking in is to use high-security rear door locks and air cuff locks.
Processes won't do any good if employees don't follow them. Thus, train employees on the processes and procedures. Keep everyone vigilant by reviewing the processes and procedures at least once a year or more often.
An effective way to deter theft or to help catch criminals after they've left the scene is with video surveillance. Its high-resolution cameras can identify involved parties. If you find out about theft after it occurs, you can review video surveillance footage to see what happened and spot the culprit.
This is where video surveillance can help. You can't always have bodies in these areas. However, cameras can see all areas and one person can watch them. All footage is stored for later retrieval as needed. Add surveillance cameras where trucks check-in and at the loading docks.
To increase the chances of catching activity as it happens, look into cameras that rely on a combination of analytics and human intelligence. This system monitors for a specific activity and alerts the security operator. The operator responds based on the activity. It could be issuing a warning through the audio speaker or a call to the police.
Video surveillance systems do more than deter crime. For example, a company's fleet truck damaged a car during daylight hours, but no one saw it happen. Fortunately, the video surveillance system with monitoring caught the incident. The security operator zoomed in on the truck to capture the license plate, fleet number, and driver's face.
Companies use video surveillance to find bottlenecks and breakdowns in processes and procedures. A proactive video surveillance system like the one from Stealth, combines video analytics and human intelligence for maximum security. You get faster response times and complete site monitoring. The technology can pay for itself within months since the service costs up to 60 percent less than the price of security guards.
If you look into video surveillance, you might want to ask about long-range surveillance and license plate recognition. These technologies can obtain distinguishing information such as the thief's face, license plates, and vehicle number.
Other cargo theft security services you may want to explore:
In working with Stealth Monitoring, you have cargo theft security options. The best one depends on your needs. Stealth will design a plan to meet your requirements. To learn more about cargo theft deterrents, please contact us.