Managing Cargo Theft: The 'New Normal' for Transportation Firms

By: Nancy Germond

Insurance and Risk Management and Finance

2011-08-23


Cargo theft is on the rise in the United States. Stealing trucking freight has become, according to Truckers News, the "signature crime of the early 21st century."

Even as cargo theft by volume in Europe decreased, the value of the stolen cargo has increased. At the same time, in the United States, Mexico, Brazil, and other South American countries, the volume of cargo being stolen has continued to increase, according to Freight Watch International. As the holiday shipping frenzy approaches in the United States in September, risk managers must remain vigilant to keep their valuable cargo protected and their drivers safe from increasingly sophisticated cargo thieves.

Managing Your Cargo-Theft Risks

Today’s risk managers and supply chain professionals implement best management practices to avoid the theft of valuable cargo. Here are a few of their tips.

Invest in quality equipment and driving training. A well-trained driver is more aware of the danger signs and will avoid risky situations, like leaving a trailer unattended. If drivers must leave a trailer, use a high-quality kingpin lock which covers the yoke that attaches to the tractor.

Place covert tracking devices in cargo loads. Some of the tracking devices are so small they can fit into a pill bottle, providing a current location at any point in the load’s journey. Companies can rent these devices during peak shipping seasons.

With high-value shipments such as pharmaceuticals, many companies use two-driver teams and hire security vehicles to follow the truck.

Certain days of the week and the type of cargo pose greater risks for theft. Weekends are the riskiest, with more thefts occurring on Sunday than any other day of the week. Over half the thefts in one three-year period occurred on the weekends.

Consumer electronics, food, and apparel were the top three loads stolen, as cited in that study.

Train drivers to avoid rest areas and truck stops when possible. In that same study, 39 percent of the thefts occurred in these locations, with 27 percent occurring at yards operated by trucking or rail companies or steamship lines.

While hijackings represented just 3 percent of losses, it's vital to train your drivers how to respond appropriately if they are hijacked -- good training may save their lives. International Management Assistance Corporation offers a course for drivers designed to increase their awareness about truck hijacking.

One expert stated as many as 80 percent of cargo thefts involve insiders. I spoke to former freight manager for an international shipping firm who served time in federal prison for his role in a cargo theft of electronics. He summed up the theft in these words: “The internal security was lax. Monitor those who have access to large amounts of freight,” he recommended.

Also examine and remain vigilant about your employees’ lifestyles and backgrounds. If you hire a person who demonstrates a solid work record but has financial problems, develops a grudge against your company, or who affiliates with criminals, your company will be at increased risk. That employee may leak critical information to those associates. Don’t simply rely on your adjuster to handle the loss; investigate each loss internally to determine if any in-house problems contributed to the theft.

Preparing for the "New Normal"

Experts predict a continued increase in cargo theft. Organized criminal enterprises face less jail time when they steal cargo than when they undertake other crimes like drug sales. To keep drivers safe, protect cargo, and reduce supply-chain disruptions, risk managers need to get used to dealing with this "new normal" for cargo-theft crimes.

Insurance is available for cargo theft and the supply chain disruption, but the most important element to cargo theft is keeping your drivers protected. It is not only your duty under OSHA to provide training for risks inherent to your work environment, it is the right thing to do.



Source: http://www.allbusiness.com/managing-cargo-theft-risk/16641264-1.html#ixzz1VsBCF2YT