By Keith Goble, Land Line state legislative editorMultiple bills under review in the Mississippi Legislature cover issues of significance to professional drivers.
One bill is intended to deter the theft of truck, rail or container cargo through stiff punishment.
The bill from Rep. Steve Massengill, R-Hickory Flat, would establish cargo theft as a specific offense and impose felony charges with escalating fines and punishment based on the value of goods.
According to FreightWatch International, in 2015 Mississippi ranked in the top 20 of states in the number of cargo thefts. Florida, California, Texas, New Jersey and Georgia are in the top five.
OOIDA says legislative efforts to deter cargo theft are a step in the right direction to help protect truck drivers and their property.
Mike Matousek, OOIDA director of state legislative affairs, has said in most cases of cargo theft that owner-operators would effectively be out of business.
“In the short term, without equipment there is no way to make money and in the long term they might lose business from a freight broker or motor carrier,” Matousek said.
In an effort to discourage thefts in the state, offenders would face prison in addition to monetary penalties. Specifically, thieves who steal cargo from trucks loaded with controlled substances, or pharmaceuticals, valued at less than $10,000 would face fines up to $100,000 and/or up to 10 years in prison.
Theft of controlled substances valued up to $1 million could result in as much as 25 years behind bars and/or fines up to $1 million. Loads valued in excess of $1 million could result in prison terms as long as 30 years and/or fines up to $1 million.
Violators of other property heists valued as much as $1,000 would face misdemeanor charges. Theft of cargo valued as high as $10,000 would include fines up to $100,000 and/or 10 years behind bars. Stolen loads valued in excess of $10,000 could result in 20 years in prison and/or fines up to $1 million.
Another provision in the bill covers fifth wheels, and any antitheft locking device attached to the fifth wheel. Any attempt to alter, move or sell a fifth wheel could result in 10-year prison terms and/or $100,000 fines.
The bill, HB1263, awaits consideration in the House Judiciary B Committee.
A separate bill in the Senate would prohibit indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.
Sponsored by Sen. Dennis DeBar, R-Leakesville, SB2459 would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
Matousek says the legislative effort is a reasonable and fair solution that will prevent all parties to a transportation contract from granting themselves blanket immunity.
Mississippi is one of seven states, and the lone state outside the Northeast, yet to adopt protections from the unfair clauses.
Affected contracts in the Magnolia State would be defined as a contract between a motor carrier and a shipper covering the transportation of goods by motor carriers, entrance on property to load, unload, or transport goods.
Other bills of interest at the statehouse include the following:
To view other legislative activities of interest for Mississippi, click here.
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By Maurizio Scrofani; CCSP,LPC
Maurizio is a well know supply chain asset protection professional with over twenty years' experience in retail. He currently works for a well known national department store chain. The views and information in this article are his own and do not neccessarily reflect the views of his current employer. Maurizio may be reached at email@example.com or via LinkedIn.
Cargo theft often is thought of as a silent and victimless crime despite the fact that it accounts for losses of billions of dollars annually in the United States. The most common incidences of cargo theft involve gangs who steal high-value commodities from loaded trailers. Substantial loses can also occur from facility burglaries. Cargo theft has a great impact to the economy of the US, which carries the world’s largest national economy making roughly 17 to 22 percent of the world’s gross domestic product (GDP) according to EconomyWatch.com. An insight into the impact of cargo theft on the retail community is crucial in determination of its economic significance to the US at large. In any business the mechanics of its supply chain helps the various management groups in keeping track of the flow of goods from one point to another. Therefore, if the supply chain loses control or has a substantial disruption, a chain of instability is created. This disruption influences not only the business areas, but also indirectly large portions of the economy.
Cargo theft has notable downstream costs that exceed the value of the goods stolen. While it is difficult to quantify these costs, they are estimated through varied methods that are passed to the consumer through increased registration prices. The most dominant impact may be in a revision of EOQ (economic order quantity), which can “pull” or “push” mutual supply chains between raw material suppliers and end shippers. In addition, as astutely noted by Dan Burgess in his book Cargo Theft, Loss, Prevention, and Supply Chain Security, “Loss of market share presents multiple issues for manufacturers, including the loss of customers, increased sales for competitors, and additional costs to the manufacturer to win back customer loyalty.” When such cases occur, the prices for goods increase, and the extra amount that each consumer has to pay to get the product accounts for the loss caused by theft.
Impact on Insurance and Brand
Insurance companies are highly motivated stakeholders in the retail industry and play a major role in cargo security. Cargo theft is often perceived as an insurance problem; therefore, its effect on the economy cannot be underestimated. Jared Palmer explained in his article in Inbound Logistics magazine, when companies report cases of trucks being hijacked, insurance premiums are raised the following year because the trucking company may not cover the entire loss even with coverage based on their deductible. Getting a similar shipment for the retailers affected may not be possible, which can negatively affect the retailer’s target of meeting their customers’ demands and vendors’ “first to market” commitments.
If a truck transporting goods has been hijacked, for example, the trucking company pays for the stolen products and the loss. Covering the entire loss could be impossible because of the deductible policy. Rates for future shipments for the same product will be raised to cover the loss incurred, and other additional costs passed to the retailers (shippers) who will pass them to their customers. Both the manufacturing company and the retailers will have to pay an extra amount to cover the loss incurred by the shipment company to obtain a similar product. In inflicting financial damages to shippers, consumers, manufacturers, and carriers, cargo theft has had the highest impact. The most critical impact to any company is its image, awareness, and other relationships.
When cases of theft happen, the stolen product is reintroduced traditionally via gray markets to the supply chain through illegal means that are out of control for the brand owner. These criminals tamper with the goods, change their prices, and the impact is felt by both the end-using customer and channel partners. To avoid such potential exposure, minimalism is best when using company names, corporate logos, or any other information that may be shared on the shipment content. All of those pertinent elements can be noted on the interior packaging. The traditional “brown box” is becoming less interesting for the curious or impulse criminal. There will always be the marketing and sales demand to promote the brand, but there needs to be a healthy balance between risk and reward. There are companies that continue to not share their loss and not report such cases to avoid negative perceptions of the public. Moving a commodity or novelty item from origin to destination is seriously impacted by the cargo theft. In today’s mutual supply chains that include multiple stakeholders, including the carriers, brokers, drivers, retailers, and manufacturers, there is always an expense created to rebuild the order and shipment to meet the original demand or revised demand based on time lapse or new consumer appetite since the loss. This is attempted to be executed while managing the cost of lost or stolen goods.
Recovering Stolen Shipments
When a theft occurs, too often victims rely solely on local law enforcement agencies to recover their freight. However, if the agencies do not have all of the needed information about the supply-chain enterprise criminals, it begins to lose its window of opportunity for recovery. A notable rule of thumb used in the industry is that once four hours have passed from theft to communication, the recovery opportunity may drop by as much as 60 percent success rate on average.
In cargo theft the most common scenario is where a gang of thieves target mainly trailers loaded with high-value goods when they are left unattended. However, methods vary depending on how execution of goods is done and how sophisticated the supply-chain enterprise criminals are. Mostly this occurs in stopping points for trucks or parking areas that are not secured, where they mainly target unsecured trailers. These criminals are always informed and are rather deep in their knowledge base on the trucking vertical along with impressive understanding of the available technology to use for their crimes as well as counter intelligence. After identifying a target trailer, these criminals access the truck and drive off with the goods to a predetermined location where they quickly hook up the stolen trailer to a recently stolen tractor and move it to a
more secure location.
Another common type of cargo theft is where thieves break into an unattended trailer and offload the cargo into their getaway trailer. This theft is also known as “leakage.” They then repack and relabel the products before reintroducing them into the supply chain. This lowers the probability that law enforcement will locate and recover the stolen goods.
Security Measures and Prevention Strategies
Security measures can be taken by companies to improve their vehicle and facility security. Implementation of technologies and security devices to create security practices with common sense can be the first step that can help in mitigating and preventing losses associated with cargo theft. For example, use of a GPS tool can help the company track and locate lost commodities.
Other preventive tactics include employee screening and training whereby the drivers—also known as our “knights of the highway”—would be empowered to be at the forefront in fighting against cargo theft crimes. It is important for cargo transporters to know and understand the supply chains of the goods they are transporting as well as determine a robust security plan across the chain in collaboration with the shipper. This will help in determining the company’s theft risks. The product type determines the ability of it being sold in the black market. Prompt response to every alarm is another important action that should not be ignored. Real-time, information-sharing practices will allow for our law enforcement professionals and other security stakeholders to plan, forecast, and react to matters that require a multi-prong effort and approach.
Lastly, the continued commitment to technology, not from an acquisition or procurement perspective only, but from a forward-thinking demand in noting where it will move to and how quickly one is willing to pivot to invest in the required changes to people, process, or technology investments in order to mitigate risk. Cargo theft may have been perceived in the past as a trucking industry problem or one that resides at the desk of an insurance claim adjuster. But clearly today in the retail industry, it is an “us” problem that needs all hands on deck and all stakeholders to be “all in.”
Long-Haul Trucking's Billion-Dollar Cargo Theft Problem It's not uncommon for entire tractor trailers to go missing.
By: ROBIN WASHINGTON
Elizabeth Aud doesn’t recall the exact species of exotic mushrooms she was hauling in 2005. What she does remember is being awakened one night by two guys rustling in the back of her trailer, and a fellow driver running out in his skivvies with a flashlight.
“When the flashlight hit them, they took off running. I’m surprised they didn’t kill themselves jumping out of the back,” she says. The pair made off with a flat of mushrooms worth $5,000.
Whether the crooks just got lucky—assuming they found a place to fence fungi—or ended up with moldy mushrooms, we’ll never know. But premeditated or not, Aud’s story is an example of how high-value heists continue to hit the trucking industry, even as the number of incidents falls.
“Overall incidents have decreased, but load values have gone up,” says Andy Geyer of FreightWatch International, a cargo monitoring service that compiles reams of data on thefts nationwide. “The things that are being targeted are becoming more specialized.”
FreightWatch figures show 899 theft incidents nationwide in 2010 valued at $423.6 million, with food, electronics, and building materials leading the pack for stolen goods. But those numbers may not match other reports, due to the fact that not every state or legal jurisdiction defines cargo theft the same way.
“It depends on how it occurs. If they’re stealing partially out of the back of a truck, some jurisdictions call it a theft, some call it a burglary. If they steal the tractor, some call it an auto theft,” explains detective Erik Dice of the Marion County, Florida, sheriff's office and the Florida Commercial Vehicle and Cargo Theft Task Force. His state is one of a handful that pushed for a federal act establishing a Uniform Criminal Reporting definition of cargo theft that took effect in 2010.
“We’re still trying to educate agencies [and] get them all on board with some kind of consistency. It’s pretty consistent what an arson is or a homicide, but cargo theft, not all states recognize it as a separate crime.”
According to Dice, the Federal Bureau of Investigation has estimated cargo thefts nationwide between $15 billion and $30 billion annually, and the agency will soon release new figures under the UCR standards.
Dice also agrees with FreightWatch that the number of incidents has fallen, but says that, in Florida at least, so has the total value. State police records show 215 incidents totaling $22 million in 2004 dropping to 130 thefts for $16 million in 2014.
Then there’s how you determine value.
“The insurance company, the legal system, the merchandiser, the defendants; they’re all going to argue different values on a load,” Dice says. “Is it the cost to manufacture a load? The cost of the raw materials in the load? The retail value of the load? The insurable value?”
Take insulin, which might be distributed in lots spread over 10 tractor trailers. If one trailer is stolen, the product in the other nine has to be recalled so that there’s no chance of it comingling with a potentially pilfered (and tainted) product. Should all 10 trailers count toward the loss?
Stealing a whole trailer, by the way, is not uncommon.
“I’ve lost a couple of trailers,” says Jeff Foster of Jeff Foster Trucking, which owns over 300 tractor trailers. He describes quick-change artists—who may have been trailing the shipment from the loading dock—unhitching and re-hooking rigs during a driver’s bathroom break. That’s why many companies require that drivers go non-stop for the first 200 miles or more, assuming they can.
“You can only be on duty for 14 hours, and you can drive only 11,” Foster says of federal regulations. “The crooks could outsmart you.”
Thieves also keep up with technology. Loads of any reasonable value are secured with seals on the trailer doors, but this security measure has become increasingly breached. “Recently, there’ve been several cases of people using 3-D printers to make replicas of the seals,” Dice says of a scam where trailers are emptied en route and then re-sealed.
Or the seals are simply cut off, as Wyzeena Heeny found out while trucking a shipment of Super Bowl-branded Doritos two years ago. Thankfully, a bolt-cutter-proof lock saved her. But that won’t matter if it’s an inside job. Desiree Wood remembers celebrating the end of commercial driver’s license school at a restaurant with a questionable fellow student who’d done prison time.
“He grabbed a basket of chips on the table, pushed it toward me, and said, ‘Pretend this basket is full of money, and you didn’t have to do anything [to get it]. We just park our truck, go someplace, and when we come back, poof! It's gone!’” she recalls. “I told him to never talk to me about the topic ever again.”
So what can the public do?
Not much, drivers and authorities say.
“There’s not a lot for consumers to do,” Dice says. He’s often asked why truck drivers don’t dime out bad seeds more often.
“I tell them, if you ever see someone trying to unlock a car with a coat hanger, your first thought is, ‘Man, I’m glad I didn’t lock my keys in my car!’ Same thing at truck stops with truck drivers. A truck backs up to a trailer and hooks up. That’s what truck drivers do.”
Still, if the industry truly wanted to crack down on cargo theft, it could take a page (albeit a hugely expensive one) from the Department of Defense.
“I used to haul munitions. I used to go to the Colt manufacturing plant and get M16s and take them to the FBI academy down in Quantico,” says 36-year driver Ingrid Brown.
“When you leave the installation, they ping you every five to 15 minutes. If they don’t get a response, they don’t wait to ping you again. They send every law enforcement agency around to find you,” she says, adding they also follow arms shipments with unmarked cars for hundreds of miles.
“This was 13 or 14 years ago. I don’t haul that now. That’s why I’m able to tell you. Today, I won’t tell you what I haul.”
We can only guess. Mushrooms?
JERSEY CITY, N.J. — In 2015, the CargoNet® Command Center received and logged more than 1,500 incidents of cargo theft, heavy commercial vehicle theft, and identity theft of trucking companies in the United States and Canada. 881 incidents involved theft of cargo. CargoNet received a loss value on 53% of reported cargo thefts. $98 million in cargo was stolen in those 470 thefts. The average cargo theft loss value per incident was $187,490. If combined with the known loss value, we can estimate the value of stolen cargo in all 881 incidents to be $175,303,399. CargoNet recorded 10 cargo thefts worth more than $1 million this year.
California reported the most cargo thefts of any state or province. CargoNet recorded 158 theft incidents with a total loss value of $18.7 million. Texas was close behind with 130 recorded theft incidents and $12.2 million in cargo stolen. Texas was followed by Florida (98 thefts), Georgia (97 thefts), and New Jersey (80 thefts).
It’s important to note that some states had noticeable increases or decreases in cargo theft from quarter to quarter. New Jersey is a good example of this. CargoNet had recorded 34 thefts in first-quarter 2015 for New Jersey, but by fourth-quarter 2015 the number had dropped to just 12 thefts. In contrast, thefts have increased in Tennessee each quarter.
In 2015 49% of reported cargo theft incidents occurred between Friday and Sunday. Friday was the most common day for cargo theft: 21% of all cargo theft occured on Friday. Cargo theft also spiked briefly on Monday (16% of all cargo theft incidents). We took a closer look at our data, and it seems cargo theft groups prefer to steal Monday evening into Tuesday morning more than Sunday night into Monday morning. Wednesday was the least common day. Only 9% of cargo thefts occurred on a Wednesday.
Food and beverage items were again the most stolen commodity. Of the cargo theft incidents that CargoNet received, 28% involved theft of food and beverage cargo. This was significantly more than the next highest categories, electronics and household, each of which accounted for 13% of stolen items.
CargoNet is a division of Verisk Crime Analytics, a Verisk Analytics (Nasdaq:VRSK) business.
Today's Trucking Staff
TORONTO, ON — In security circles, the Greater Toronto Area has come to be known as the “shopping triangle” for cargo thieves who continue to wreak havoc on the Canadian trucking industry to the tune of $5 billion per year, snapping up everything from electronics to metals, by any means necessary.
Canada’s cargo theft crisis continues to escalate, with reports to the Insurance Bureau of Canada doubling to 400 over 2015 alone, primarily in southern Ontario. As Canada’s most targeted area, the shopping triangle is a geographical region that’s not only on organized crime’s radar, but the radar of security experts like Ron Hartman, too, who’s working to empower trucking companies through a long list of modern prevention measures.
“We all know it’s a lot easier to prevent a crime than solve it,” says Hartman, speaking at a Wednesday seminar hosted by the Private Motor Truck Council of Canada. “You must think like a criminal.”
Hartman is director of security solutions for AFIMAC Global, which specializes in cargo theft prevention. While the old school criminal methods of hijacking cargo are alive and well, Hartman says technology has allowed for more criminals to operate from behind the safety of a desk, utilizing online information and applications to find new ways to infiltrate the system, and of course, precious cargo.
One of the more recent cargo theft phenomenon is dubbed fraudulent pickups. Essentially, criminals setup an entirely fictitious trucking company online, and then use it to prey on shippers who don’t do their homework, failing to screen and verify data. The criminals troll load boards and make a deal.
“Then that load gets picked up and never delivered,” says Hartman.
Hartman describes the cargo theft business as “low risk, low penalty, high reward.” In fact, theft is so pervasive that he estimates as much as 60 per cent of these crimes go unreported, mostly out of fear over rising insurance premiums, or corporate image. Of course, nobody likes to admit they’re a victim.
Once criminals have secured their stolen goods, Hartman says they tend to break down the shipment into smaller quantities, repackage, then export it.
“For those with an untrained eye, it looks like the normal course of business,” adds Hartman.
When it comes to what exactly thieves are stealing, the answer is anything and everything. Recent Canadian heists involved T-Shirts and a shipment of silver, but electronics continue to lead the way, Hartman says, representing about 18 per cent of cargo thefts. Items like beverages and auto parts both represent 10 per cent of thefts.
In 2014, in an attempt to put a stop to cargo theft crime nationwide, theInsurance Bureau of Canada andCanadian Trucking Alliance teamed up and expanded their joint IBC-CTA reporting form into a national reporting program.
EDMONTON — Cargo theft is a big-ticket industry in Canada, costing Canadians upwards of $5 billion per year. But now, police, insurance groups and trucking associations are hoping to crack down on the crime, which is on the rise in Alberta.
Thieves often target trucks carrying household items like laundry detergent, T-shirts and electronics, and sell them in underground, illegal markets.
“A thriving black market keeps sophisticated and networked thieves in business,” the IBC said.
Shawn Korchinski drives truck and says he’s always on alert for thieves. But even though he watches his load like a hawk, Korchinski’s been through some interesting ordeals.
“I’ve pulled into a truck stop, gone in for something to eat, come out, didn’t check my pin when I go away and drive away the pin’s been pulled and the trailer drops,” he explained.
He’s also heard horror stories from fellow drivers.
“Guys will be sleeping in the bunks… and all of a sudden they wake up the truck’s there but the trailer’s gone. Someone’s gone in, moved the truck out and boom! There goes the trailer.”
Often times, the items are sold off before they’re even reported stolen.
“We see loads that are stolen at 3 a.m., the goods are for sale at yard sales by 8 a.m. And in one instance, later that same day the other half of the load is Stateside destined for the Port of Los Angeles,” Bill Adams with the IBC said.
“These (are) criminal gangs. These are not a mom and pop operation, this is not a crime of opportunity. These are sophisticated rings.”
In hopes of getting one step ahead of the thieves, trucking companies, police and the insurance industry have teamed up. They’ve created a national database that tracks and shares cargo theft details.
“We hope that by having this kind of pan-Canadian approach to the issue and by working with counterparts in the U.S., that ultimately we will get ahead of this,” Adams said.
The cargo theft reporting program has already seen success in eastern Canada. The IBC says companies have managed to recover about one third of all the reported stolen cargo since the database was created.
On Tuesday, it was expanded to include B.C., Alberta, Saskatchewan and Manitoba. For more information on the program, visit the IBC’s website.