Holiday season to bring about a rise in cargo theft: Criminals to target high-value shipments

BY MARK A. HOFMANN



Business Insurance



Christmas is coming and thieves have already kicked off the cargo theft season, experts say.

The season means more high-value, high-demand goods are hitting the highways. That presents opportunities for cargo thieves, experts say.

Fortunately, risk managers, security managers and others responsible for cargo protection can take steps to increase the likelihood that shipments will arrive at their destinations intact, according to observers.

Discussing the general issue of cargo theft at the recent National Cargo Theft Summit in Washington, Kevin L. Perkins, the assistant director of the Federal Bureau of Investigation's criminal investigation division, estimated that cargo theft costs $30 billion annually.

Cargo theft involves an increasingly sophisticated criminal enterprise, often involving gangs from Latin America, Asia and the Caribbean, Mr. Perkins said. Cargo theft presents "much less risk than other forms of criminal activity," such as selling drugs, he said. Prison sentences typically are much shorter than they would be for other potentially very lucrative crimes, he said.

"It would make sense that the number of thefts would go up" as the holidays approach, said Joe Wehrle, president and CEO of the Des Plaines, Ill.-based National Insurance Crime Bureau. "Especially during the holiday season, why would you want to break into a store and steal a handful of TVs when you can get hundreds of them off of one load?" he said.

"When people think of Christmas, they think of toys," said Scott A. Cornell, national manager-special investigations group in Travelers Cos. Inc.'s Rochester, N.Y., office. "When we see the first load of video games or something related to video games, the toys are on the road and here we go."

Holiday cargo begins to move in September, Mr. Cornell said. There's more cargo than usual the rest of the year on the road and, equally important, the cargo tends to be high-demand items.

"That type of volume creates more targets for bad guys and more backlog for trucking companies and shippers," he said. Cargo has to be stored in secondary storage, such as trailers, before it's delivered, he said.

In addition, to deal with the increased volume, shippers may have to hire trucking companies they never have used before, said Mr. Cornell. As a result, they are not familiar with the truckers' security practices, he said. It's important for the shippers to talk with the trucking company's risk control manager and make clear what sort of security measures have to be implemented, he said.

"The thieves are out their doing their own Christmas shopping," Mr. Cornell said.

Regardless of the season, "if you take every theft that has occurred, especially in truck stops or warehouses, you're going to find that the employee or the driver had made some mistakes," said Capt. Tommy Bibb of the Marion County Sheriff's Office in Ocala, Fla.

Kingpin locks

An unattended and detached trailer is a particularly inviting target for thieves, Capt. Bibb said. "If you're going to leave the trailer unattended and detached, they need to have a good kingpin locking device," which goes over the yoke that attaches to the tractor, he said.

Quality is critical. "A cheap one won't do it," he said. Well-made kingpin locks could cost $100 each.

If a trucker pulls into a truck stop for a meal or shower, the driver should pull the rig straight in rather than back it in, Capt. Bibb said. "Park it where you can somehow keep an eye on it," he said, adding that most cargo thieves are very good at surveillance, watching drivers and waiting for the best opportunity to steal the cargo.

Travelers' Mr. Cornell offered similar advice. Loads should not be left unattended and unsecured, he said.

Risk managers need to review and reinforce security policy, he said. They need to make sure that drivers use the locking devices they have been provided as well as covert tracking devices, which ideally are placed within the cargo year-round, he said. He noted that some trucking companies rent the tracking devices during the high-volume holiday season.

"The biggest method of prevention is good policies and good enforcement of them," said Mr. Cornell. He advocated an "overall layered security approach" involving trained and vetted employees who are updated on policies and engaged in policies.

In addition, the risk manager or another manager needs to check to make sure that employees are following company policies, Mr. Cornell said.

Although not engaged in the making and shipping of holiday gifts, Johnson & Johnson nevertheless experiences an increase in the number and value of shipments at year's end, said Wayne Klokis, manager of the corporate risk management department. The New Brunswick, N.J.-based company's transit program falls into Mr. Klokis' bailiwick.

"We've have a pretty successful story in regard to our cargo thefts in general," said Mr. Klokis. In 2008, the company suffered a series of large pharmaceutical thefts, he said (BI, April 26).

But through a partnership with J&J's cargo insurer-London-based RSA Insurance Group P.L.C.-and internal security personnel, "we basically have had no thefts on the pharma side of the house" since enhanced security procedures were put in place in 2009, Mr. Klokis said.

He said J&J "tried to find the best of the best" of transporters to carry company products. This meant using GPS systems, having two drivers on shipments and even tailing shipments with security cars, Mr. Klokis said.

"Clearly when it comes to year-end, trying to get sales, it's critical. We undoubtedly see shipments and the value of the shipments increase, so we're on even higher alert at year-end to see that our shipments are protected," Mr. Klokis said. "As a result, our antenna is up to be on the watch against increased theft activity."