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Cargo Security News

Putting a Stop to Highway RobberyCanada's trucking industry steers out of the skid of the $5B cargo theft business

8/20/2014

1 Comment

 
Jeff Pearce 

Drugs get the big headlines: pot plantations out in BC; meth labs in your squeaky clean ‘burbs in Calgary. Even when trucking’s involved. Only two years ago, the Toronto Starreported on the lucrative cross-border drug smuggling trade via long-haul loads; one bust alone turned up 97 bricks of cocaine, worth more than $4 million. But here’s the thing: if you think about it, why should crooks bother at all with dope, when there’s so much legit merchandise to be ripped off?

Let’s go back to early May. The Auto/ Cargo Theft Unit of the York Regional Police get a tip and swoop in on multiple warehouses in Vaughan and Toronto, where thieves have stashed $1.4-million worth of stolen goods. The cops have to cart away 15 loads—count ‘em, 15—of merchandise: baby products, barbecues, household appliances, cleaning supplies, tools, forklifts, vehicle antifreeze, musical instruments, and not just the kind you can walk off with, like a guitar or clarinet, but an actual baby grand piano. Detective Sergeant Paul LaSalle of the York Regional Police has a good sense of humour, and he deadpans, “Yeah, we knew we’d get questions about the grand piano.”

In a way, the raids are a tribute to a new spirit of collaboration among law enforcement agencies, the insurance business and the trucking industry. It was a classic team effort, with Peel Regional Police assisting and the Ontario Trucking Association involved. Thanks in part to the Insurance Bureau of Canada’s cargo database, the cops were able to return most of the stolen goods to their legitimate owners.


It’s a significant win, given that cargo theft—whether from trucks or containers in a port—is an international problem. Roberto Saviano, the investigative journalist who now lives in hiding from the mafia, started his classic on organized crime, Gomorrah, not with a discussion of coke and heroin but how the port of Naples has a bursting black market in jeans, Barbies and plastic toys.

For Canada alone, the illegal haul is $5 billion a year, more than enough incentive for the IBC and the Canadian Trucking Alliance to expand their cargo theft reporting pilot program. Garry Robertson, national director of investigative services for IBC, says the program will be expanded out west. “I’ve already got some law enforcement agencies from the Western regions that are now interested. We will be doing that so that we can see: is the pattern [of thefts] that is happening in British Columbia, Alberta and across the Prairies the same pattern that we have in southern Ontario using the [Highway] 401 corridor between Windsor and Montreal? Or do we have another one?” He says the faster that information about load thefts can be put out in the media, the more tips will come back from the public.

The free flow of information wasn’t always there. Barry Peabody, a consultant in product management for SGI Canada in Regina, concedes that cargo theft is an issue that trucking firms are often embarrassed to talk about. “They have to admit it to the client, but they’re also looking at the image of their own company, and you know, if you’re hauling for 10 customers and you are publicly saying we’ve lost, for whatever reason, these commodities for this customer, the other nine customers are going to be sitting there thinking, hmmm.”

When Wheels Are Turning

In a climate of reticence, of course, the thieves can go merrily on. The obvious big-ticket bull’s eyes are Montreal, Vancouver and the Greater Toronto Area. But, Peabody says what the bad guys want differs from year to year. While electronics used to be favourite items, they can be detected far easier these days and shut down remotely. “So what we’re starting to see are more common things getting stolen. Food and drink they can get sold relatively quickly, and most don’t have serial numbers on them. Somebody steals a flat of soft drinks, you’re not going to really ask, is this a stolen commodity? It doesn’t occur to you when you’re at a summer market somewhere and somebody’s selling bottles of cola for 75 cents less than what everybody else is selling them for.”

He says the risk in Eastern Canada is mainly to packaged consumer goods going through a wholesaler to the retailer. In the West, of course, a lot of base minerals, lumber, ore, grains and potash get shipped. The risk is lower “because of the nature of the commodity itself. Combined with the commodity is where it originates, because, you know, there’s an old saying in cargo insurance that freight at rest is freight at risk. What the idea there is, is if the wheels are turning, there hasn’t been a load stolen yet.”

“‘We’ve never picked up a load from you, we don’t know who you are, that wasn’t us.’ And then you realize that their identity has been stolen.”

A load that has to stop a dozen times before it can actually get out onto the highway has an inherent risk in each of those stops. Conversely, if you load some grain from an elevator and hit the road, your risk is less. But you can’t just look at what’s in the trailer—consider who’s behind the wheel. “When you’re shipping a commodity, the trucking company should be looking at the drivers themselves…. You’ve got to make sure that you’re checking their background, checking their previous employers. Would the previous employer rehire them, or are they glad they’re gone?”
If the targets for theft vary, so too can the perpetrators and their methods. Here in Canada, cargo theft may be one part of the “business portfolio” for hardcore violent criminals—infamous gangster Bindy Johal bribed drivers in Surrey to rip off their own loads, worth about $20,000 on the street in his day (Johal ended up fatally shot in the head in a Vancouver nightclub in 1998). But trucking loads can also be the prey of highly organized specialists. Garry Robertson knows this only too well. He was with Peel Regional Police for years as a detective in auto theft and left in the ‘90s to open a private investigation company with a colleague, dealing sometimes with cargo theft and insurance crime. For him, the faces of the villains haven’t changed that much over his career. “Quite honestly, there are still players that I dealt with back then that are still around today.”

In the U.S., the thieves tend to work in groups of five to 20, according to Scott Cornell, national director of Travelers Investigative Services Specialty Investigations Group in Hartford, Connecticut.

Cornell says most cargo theft in the States remains a crime of opportunity; it’s not the fastest growing way, but still the most common. “How do they know what’s in it? Well, first answer is, sometimes they don’t. Sometimes you can tell that they’ve shopped through the trailer.” Thieves can open and rummage through five or six trailers before they pick what they want. Other times, they might have inside information. “Sometimes they do surveillance on the warehouses. They see what’s being loaded, they know what’s being loaded, and then they follow that truck out until its first stop.” And then they wait… until the driver pulls into a rest stop and leaves his rig.

Strategic Scenarios

So much for “straight” cargo theft. Cornell also knows the scenarios for what he calls “strategic” cargo theft. Some thieves will go so far as to steal the identity of a legit trucking operation, go online to the load boards and make a bid in their victim’s name. A shipper innocently accepts the offer, and goodbye merchandise. “So then the legitimate trucking company will get a call a week later or a couple of days later, saying, ‘Hey, you picked up a load of widgets from us the other day, and we haven’t heard from you since,’ and the company says, ‘We’ve never picked up a load from you, we don’t know who you are, that wasn’t us.’ And then you realize that their identity has been stolen.”



In what Cornell labels “fictitious pickup,” the thieves learn where a scheduled load has to be picked up, show up hours early posing as the legitimate carrier, and off they go. Like something out of a heist movie, the real carriers then come along at the proper time—but far too late.

“Is that happening here?” asks Garry Robertson. “Absolutely it is.” In Quebec “not that long ago,” a thieves’ ring had “all the correct paperwork” with phony invoices but the right logos, letterhead and branding for a genuine carrier, right down to the proper markings for the truck they used. The beauty of that, he says, is that “they not only had all the information, but everything that was done was done properly. Drivers’ licenses were exchanged… photo ID taken.” Fake, fake—all fakes.

“Bad guys can be legitimate on paper.”

Then there’s the “misdirected load.” Scott Cornell says the “bad guys can be legitimate on paper,” forming a front company. Once again, they do all the right things, bid on a load and then call up the customer to say, “Hey, we’re in transit, the driver’s having some difficulty with his tractor, he’s going to pull in and get some repairs. We might be a little bit behind schedule, but no problems, we just wanted to let you know….”
Then our villains actually “bobtail in” to get some repairs done, having committed minor sabotage—a belt or a hose, something minimal—all while another member of the group takes care of the trailer. And the driver, who happens to be in on the job, has his very plausible alibi, a genuine bill for the repair job.

The tactics are getting increasingly sophisticated. And Barry Peabody says planning has to be done along the way to figure out the best practice for securing loads and equipment. “Do you just pull over into a parking lot of a shopping mall with no security around you whatsoever, or do you find areas of high visibility? Do you back your trailer up against a wall so the doors can’t get opened, or do you leave it sitting out…?”

After all, a truck can be stolen in minutes—and there’s money to be made even in selling the tractor-trailer. “You know, there’s some security you can get. You can put a kingpin lock on there to stop anybody else from coupling up to your trailer, but… they can open up the back doors of your trailer, and it’s very possible that they could be in and out there in a very short period of time. Now, do they travel around with forklifts if they’ve got to move pallets? No, they don’t, but if you’ve got a load of iPad Minis valued at $700 a pop, and you’ve got 10 minutes, you could pull an awful lot of boxes out of there and be gone.”

Peabody says most insurers haven’t looked at their product since the ‘70s, and yet the trucking industry has changed enormously since that time. “The quality of the trailer is tighter, stronger. The doors are better, and they seal better. The suspension is more reliable, so you don’t have as many vehicles falling into ditches because the suspension gives out. The refrigeration unit that might be on trailers, these things are all controlled now by computers and monitored through the GPS systems and the cellular systems.”

Peabody’s own firm, SGI, has been as guilty as the rest, he admits, of not keeping up to date to meet the concerns of trucking customers. The company is trying to rectify that with its product, Cargo Secure, which offers new features such as coverage for load contamination. Thieves got a head start, but it sounds like the industry is at last catching up.

Meanwhile, the cops keep pace as well. As we go to press, Detective Sergeant Paul LaSalle says one individual from the raids in May has been charged so far with possession of stolen goods over $5,000, with other charges pending. His force is building its case against those in charge of the theft operation. The police know who the crooks are and are closing in. End of the road, no exit…


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