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November/December  Volume 27, Number 6        


Protect Your Cargo!

Earlier this year, the FBI released its second annual compilation of cargo theft data. During 2014, 547 incidents of cargo theft were reported to law enforcement. The stolen cargo had a value of more than $32.5 million.

The FBI statistics include only reported thefts. The National Cargo Security Council (NCSC) pegs the total cost of cargo theft much higher. It estimates cargo loss costs at $50 billion annually, in direct and indirect expenses. That’s a lot of cost to pass on to your customers.

Cargo theft has many victims, from employees (i.e., drivers, warehouse workers) who can be hurt during an armed hijacking or robbery....to retailers who lose merchandise…to consumers who pay as much as 20 percent more to make up for cargo theft…to state and local governments who lose sales tax revenue…and even to insurance companies, manufacturers, and shipping companies.

What’s being stolen? Any product being shipped is potentially a target, but cigarettes, pharmaceuticals, and especially computer/electronic components are high-value favorites being re-sold on the black market.

In the past few years, FBI investigations have revealed more and more sophisticated operations with well-organized hierarchies. The typical “criminal enterprise” has a leader who runs a regional or national operation. Beneath him are cells of thieves and brokers, or fences, who unload the stolen goods on the black market. “Lumpers” physically move the goods, along with drivers. And there’s usually a specialist who is expert at foiling the anti-theft locks on truck trailers.

In fact, the FBI calls cargo theft a “gateway crime.” Cargo theft investigations often “turn into a case involving organized crime, public corruption, health care fraud, insurance fraud, drug trafficking, money laundering, or possibly even terrorism. Criminal groups use the illegal proceeds they gain from stealing cargo to fund their criminal operations. And the fear is that terrorists could use their proceeds to launch attacks or fund training.”

Not all cargo thefts are outside jobs, however. In some thefts, individuals directly involved in the shipment will participate. An insider can provide thieves with information regarding the content of shipments, or a driver might collude with thieves by allowing access to the trailer in exchange for a cash payment.

Technology, such as GPS systems and RFID (radio frequency ID) tracking can help shippers keep track of their shipments. Still, some old-fashioned preparedness and common sense procedures can help. These include:

  1. Warehouse security. Do you screen all warehouse applicants to weed out those most likely to participate in theft? Is your facility secure? Do you train employees to release cargo only to authorized drivers or carriers?
  2. Data processors
  3. Logistics. Do you know where your shipment will go? Will it be combined with other cargo en route? Work with your shipper so you know where high-value shipments are at all times. Share logistics information only on a need-to-know basis.
  4. Driver security. If you use your own drivers, do you train them to keep trucks locked and park only in well-lit areas? Do you require one member of the driving team to remain with the truck at all times?
  5. Tracking. Whether you use your own drivers or work with a common carrier, monitor all shipments—if any are late, begin investigation immediately.
  6. Reporting. If your cargo is missing, report it to the proper authorities immediately. Cargo thieves move stolen goods quickly, so the faster you act, the faster law enforcement can respond.
  7. Insurance. Make sure you have the right type and amount of coverage for your cargo.

For more information on preventing cargo theft and insuring your goods while in transit, please contact us.

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In this issue:

This Just In...

Website Accessibility Lawsuits Increasing

Specialty Liability Coverages

Protect Your Cargo!

Winter Prep Check-up



The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2016 The Insurance 411. Tel. 877-762-7877. www.theinsurance411.com