Distribution breeds cargo theft

Memphis Business Journal by Andy Ashby

 September 23, 2011

Bobby Wiggins says “some thieves will follow a truck as it leaves Memphis, then rob it when a driver takes a break on the road.”


While the Memphis metropolitan area ranks high among the nation’s distribution centers, that notoriety also translates into unwanted baggage: cargo theft.

A FreightWatch report in April ranked Memphis/West Memphis as No. 5 nationally for major risk zones with 110 thefts between 2006 and 2010. Los Angeles topped the list with 518.

Companies with distribution operations in the area are partnering with local, state and federal law enforcement to combat this type of crime while implementing extra security measures when possible to decrease the number of incidents.

One of the reasons the Memphis area has a high degree of incidents is because the area is high in the number of distribution centers as well as high-risk product distribution, according to Bobby Wiggins, a board member on the Mid-South Cargo Security Council.

“In Memphis, you’ve got your largest pharmaceutical distribution centers and your major cell phone carriers,” he says. “That plays a pretty big role.”

Pharmaceutical thefts are on the rise nationally, increasing by 283 percent from 2007 to 2008.

In early 2011, Menomonee Falls, Wis.-based DDN added 140,000 square feet of space in Southeast Memphis. This brought the company’s pharmaceutical distribution operations in Memphis no more than 500,000 square feet.

In second quarter 2012, Weston, Fla.-based Anda Distribution will open a 234,660-square-foot generic drug distribution facility at 8644 Polk Lane in Olive Branch.

Thieves target pharmaceuticals because they can find ready markets in third-world countries, among others.

Cargo theft is also an issue throughout the Mid-South for the same reasons distribution centers are so prevalent here: major interstates such as I-40 and I-55. Thieves have a lot of choices when it comes to stealing product and getting it out of town. Also, some groups will follow a truck 200 miles out of Memphis and wait for the driver to get out for a bite to eat.

“It doesn’t always happen here in Memphis even if the load originates here,” Wiggins says.

The Mid-South Cargo Security Council is an organization made up of local businesses which deal in the shipping industry. The organization’s mission is to understand what is going on in cargo theft, provide support for the FBI and other agencies and offset some costs for their training and equipment.

Wiggins was a military police officer for 15 years and has worked for various distribution centers since 1993, mostly in the electronics industry.

He says many companies are combating cargo theft by having their own Global Positioning System programs that are becoming more sophisticated all the time.

Companies used to put big domes on their trailers with GPS systems.

“Those were easily defeated able,” Wiggins says. “They’d either rip them off or knock them off with a baseball bat.”

Now companies are imbedding GPS devices in the load and monitoring it themselves.

It’s an added expense, but it affects how criminal gangs operate.

“Once they learn companies are doing that, they’re a little more conscious in how they pick their loads,” Wiggins says. “This can, in some cases, reduce the number of trailers you could lose.”

Also, with certain loads, companies will require a two-man team with at least one person being with the truck at all times.

Companies are also working more with law enforcement.

Cargo theft is one area where law enforcement teams with private industry, according to ConradStraube, special agent with the FBI’s Memphis division and coordinator of its Memphis Cargo Theft Task Force.

The task force investigates major thefts, but also meets regularly with groups like the Mid-South Cargo Security Council to keep the business community apprised of local, regional and national trends in cargo theft.

“We figure if we can get ahead of some of these problems, that will prevent us from having to do more investigation down the road,” Straube says.

The two organizations had 150 people participate in a conference last year focused on cargo theft. They are expecting more than 300 in a similar conference in October.

At the end of the day, security is simply a part of the business.

“Security isn’t a profit center, it’s a cost center,” Wiggins says, “but it maintains the integrity of the inventory.