Three Ways to Keep Cargo Theft in Check

Editor’s Note: Michael Meeks is the Director of Risk Management for AFN. He has more than 13 years of experience in the risk management and insurance industries, including 11 years in multi-line commercial and transportation claims. At AFN, Michael oversees the Risk/Legal Department, including its claims, compliance and security division.

Consider the following scenario:

A driver hauling a truckload of high value electronics pulls over to grab coffee and refuel at a gas station just yards off the highway. Before heading inside, the driver locks all cab doors and ensures locking devices on the trailer are in working order. A mere five minutes later, the driver returns and the spot is empty. After reporting the theft, local law enforcement tracks down the stolen rig just a few miles away, but it's also empty.

Unbeknownst to the driver or law enforcement, the perpetrators orchestrated the heist well in advance. One crew followed the shipment closely for hours in a car, while another trailed behind in an empty rig to fill with the soon-to-be-stolen goods.

This is just one example of the detailed level of orchestration displayed by some of today's cargo thieves. As stakeholders across the supply chain have dedicated more attention to cargo security, so too have thieves looking to remain a step ahead. As these criminals continue pioneer more innovative techniques, it's crucial shippers, carriers and 3PLs come together to both shore up defenses and improve cargo recovery.

Cargo theft on the decline, but risk remains

Instances of cargo theft declined by about six percent in 2015, according to logistics security organization FreightWatch International. The report also noted, however, that a high risk for cargo theft remains due to the increased savviness of thieves.

Heists like these pose potentially crippling risks for all involved in transporting cargo. Beyond the obvious driver security concerns, thieves tend to target high value, expensive-to-replace loads, such as electronics and pharmaceuticals. On average, these stolen loads cost shippers more than $180,000 apiece in lost goods in 2015, according to the FreightWatch report. Meanwhile, carriers and drivers face the prospect of stolen equipment. And thefts can negatively impact a consumer's experience with a company, resulting in churn or damaged brand reputation.

While this may sound all doom and gloom, there are several steps stakeholders can take to reduce risk and mitigate losses.

1) Focus on the driver. Companies often contract transportation services through third-party logistics providers. This adds the benefit of retailer-specific expertise to ensure efficient, on-time delivery and more efficient and agile fleet coordination. In this scenario, it is important to ensure that your provider has protocols in place to thoroughly vet carriers.

Completing background checks and providing security manuals to all drivers are easy ways to avoid potential thieves. Another simple step: Requiring drivers to present documentation at the time of pick-up. A commercial driver's license and vehicle registration can help weed out potentially fraudulent drivers. One way thieves gain access to goods is by posing as credentialed drivers. Requiring verification before handing off a load is an easy way to stop them.

2) Focus on the cargo. GPS tracking is no longer a “nice to have,” it's an essential piece of any cargo security protocol. This can take many forms, from GPS units installed on-board on tractors and trailers, to sensors embedded in cargo. When working with a third-party provider, it's often mandated that carriers install this technology.

Locking devices on both tractor and trailer door handles also alert potential breaches, while different types of sensors can signal thefts based on a range of criteria. For example, if a common route entails a 10-minute stop for refueling, but the trailer has remained motionless for an hour, sensors can alert carriers, and in turn, law enforcement.

3) Make investigation and recovery a priority. Just as important as prevention is recovering goods after a theft, especially high value loads. GPS technology enables carriers, providers and shippers to do just that, but as thefts become more organized, time is of the essence. Building relationships with local law enforcement agencies is a must. Both carriers and third-party providers should have set protocols and contacts in place for different regions to ensure timely response. Several regions also maintain organizations dedicated to cargo security, which brings together all transportation stakeholders to share best practices.

Strengthening each of the above areas is key to shoring up defenses against cargo thieves. However, as thieves continually become savvier, the best security protocol includes several layers of protection – from GPS solutions and other sensor technologies, to better prepared drivers, to more educated shippers and more structured, risk-averse routes. Together, shippers, logistics providers and carriers can work together to ensure safer, more transparent cargo transportation and hopefully we can see a continued decline in theft year over year.

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