Cargo Theft: What It Is And How To Prevent It

Sa. World of cargo theft these days. As you can tell, last week, CargoNet came out with their annual report saying 2015 had about 880 different cargo thefts across the country. Not only that, but of the 53% of those that were reported, the total value was about $173 million. As you can imagine, it was pretty crazy to begin with in terms of the value of it. If you extrapolate that out and think about it even a little bit further, that's over about $350 million worth of cargo theft just in direct damages alone. That's assuming, you know, it's an equal distance between the ones that weren't reported. Ones that weren't reported probably were a little higher, but there's no telling, really. I'll go ahead and start sharing my screen with everyone here so you can see everything and get everything pulled up so we can take a look and have a good time. Okay, so the bear is there simply because there's a joke saying, you know, you don't have to be as fast as, you know, the fastest one out there to prevent, you know, cargo theft in this case, but you definitely have to be faster than the next guy around you, not get caught by the bear who might be chasing you. So it's not necessarily about being the bear. You have to be faster than the next guy around you, not get caught by the bear who might be chasing you. So in this vein, I put a bear up there, so everybody could kind of get that theory behind you. So it's not necessarily about being the best in the marketplace and trying to avoid cargo theft or prevent cargo theft, but definitely you have to be better than the next guy. Sad to kind of think like that sometimes, but usually a lot of that ounce of prevention goes a long way. When you talk about where cargo theft happens on a more global basis, not necessarily the events themselves, but 80% of cargo, generally speaking, in the United States is stolen from five different states or five different areas in the country. It's Southern California, southern Texas, pretty much all of Florida, generally speaking, the Atlanta area is also a huge place for cargo theft. Greater New York, New Jersey area, and then Illinois are the. Are the five top places. It's really, really prevalent, has been for the last probably 10 or 15 years. You know, I have Memphis on the map, too, and the whole kind of north, northeast Arkansas, southwest Tennessee area, the whole Memphis area, where there's a lot of crossroads of roads, railroads, and a lot of freight shipping going on there, too. Kind of crossroads of America in A lot of, in that particular vein, that's the hub of FedEx and a number of other big carriers that deal with cross country freight. So lots of cargo theft activity there in the last couple of probably 12 to 18 months that we've seen uptick in. So it's been a little bit different, a little bit more interesting to see that kind of popping up as a place as well. Roughly 25% of all cargo stolen in the country these days are food products. That's actually surprising to a lot of people. But the, the most fun and interesting thing about that is you wouldn't think, you think it would be something sexy like consumer electronics or pharmaceuticals or something really fun like that, but no, it's just really mundane food products, generally speaking, meats, reefer products, produce and things that can be easily fenced and taken off the trucks and spread out pretty quickly. And they're very hard to actually physically track too. Part of the Food Safety Modernization act that was passed a couple years ago and it's going to be implemented this March has a lot to do with that as well. And so the tracking and tracing through the supply chain of food is hopefully going to get better over the next two or three years. So it'll be interesting to see how that turns out too. But as it is these days, it's a crime opportunity. Cargo theft is most definitely a crime of opportunity in this situation. Again, 25%, 30% of all thefts in the United States are food products. So definitely interesting to keep an eye on that as time goes on. Of those food products that are stolen, as well as just across the country, most unattended vehicles account for most of the theft. 80 to 90% of the theft occurs because the vehicle or the trailer is unattended. So in a lot of ways too, you have to look at that and say, okay, well, if 8 or 9% of the time is unattended, that's obviously the first place you really want to start looking at and trying to solve the problem or trying to reduce your exposure to theft. Another thing that's kind of picked up over the last few years, specifically since about 2007, 2008, when it's come on the radar of everybody is fictitious pickup and imposter theft. And that's essentially where a rogue criminal will steal the identity of an actual validation motor carrier. And then they'll go through and they'll actually facilitate the theft by posing as that carrier, going to the shipper and picking up the load and posing as they carry. They'll have you know, the trucks will have the correct documentation, the drivers will have all the information on the load usually picked up off a load board, generally speaking. So that's kind of, you know, since 2008, 2009, that's kind of when the Internet popped in. Was able to, you know, facilitate those thefts a little bit better. The other really cool thing too, with that is. Or cool thing, I guess, is the ability to kind of stop. That has been elusive. And so it's been interesting to see how things have turned out and how they will turn out in the future. But that's a growing trend in cargo theft industry and something that we all definitely have to take notice of and see what we can do to try to help in a lot of situations too. A lot of folks, like, what can we do about it? It's cargo theft in a lot of situations is. A lot of folks don't think it's that widespread of a problem. Obviously, with the $15 billion to $30 billion a year, that's a huge price tag for the consumers ultimately to have to bear across the supply chain. But at the same time, too, police don't really care. Generally speaking, it's not they don't care, but they have a lot bigger fish to fry. And so they're not really interested in going through and dealing with property crimes as much unless they have a substantial issue or if it's a huge enough value, if it's a load of pharmaceuticals, it's like $600,000. Obviously that'd be a lot different or, or hopefully handled differently than your typical 30, you know, 30, $40,000 load of fruit or vegetables that's coming up out of Florida or something like that. So in a lot of situations, a lot of people have that, what can we do? How can we fix this? And among the number of things we've done at Carrier Risk Solutions, you know, we come through and looking at everything that's out there and what we can do and how we can fix that, we've developed a couple different things. And one is my safety manager, which is essentially, it targets those folks who are roughly between 5 units and 45 or 50 units. It's the accounts that are too big to be small, too small to be big, who have a really large problem with this because the fleet growth is there. They're still taking a lot of freight from load boards at the same time too. And the other problem is that they don't have the verification processes and systems in place there to actually physically be able to go through and truly vet the partners that they deal with and try to truly protect themselves. If you're one or two unit accounts, they typically don't get picked on from what we found, generally speaking, then if you flip the coin over on the large folks, the Schneiders of the world, the sds, those folks have dedicated risk management staffs, written cargo theft plans, things like that in nature, and they're sitting out there all the time and protecting themselves that way. So kind of that whole middle ground is kind of what I call the purgatory of cargo theft, or even the purgatory of transportation and safety as well, because not really ignored necessarily, but at the same time too, they have the ability to take on a lot of risk because sometimes more than they really need to and then flipping around, they actually aren't really justifiably paid for that risk that they're taking on. So a couple different things we've done. Obviously, like I said, my Safety Manager is a community where everybody can join together. We've already got about 135 members signed up to join. My SafetyManager is online@mysafetymanager.com and like I said, it's essentially a community where everybody can come together and get real good information. Have access to webinars each month that are a problem is going to be a lot better than this one. I'll just start it and then obviously too have a number of different other things that you can check out there, as well as a free hour of consulting with me personally every year too. Lots of good things here, lots of good discounts. Another thing that we've embedded inside of the My Safety Manager community, and we're also doing a little bit on the side too for some clients is called Cargo Alert. And what Cargo Alert does is it pretty much helps with getting the word out there. What we found is that generally speaking, if you have a cargo theft, especially within the 24 hours immediately after it, that's the time you have to get the load back. That's why you have carriers like or not carriers. That's why you have companies like CargonAV and FreightWatch investing so heavily in finding technology to be able to track and trace things and to get the word out. So that's the biggest. We found that everybody we can is a much better need, is a much higher need, and we can figure out good ways to do that. We have a couple of good systems in place where if you do have a cargo loss, you're a member of my Safety Manager community. Or if you don't. And you want to pay a fee for that, we can broadcast that out to you and say, okay, you have 5,000 people in our LinkedIn network. We have 135 and growing daily people in our mysafety management community. And these are extra eyes on the road. These are folks who are out there every day and things like when the Beltway shooters happened and John Lee Malvo and those guys happened back in the early 2000s, late 90s, it was truckers who found those guys. And it's the sense of presence and having the understanding of where things are and who's doing what is the ability to go out there and actually have the eyes on the road. So the first 24 hours is most critical. If we can take the information in online, we can get it out to folks more quickly. That kind of responsiveness is what we're looking to do with my safety management and like I say, cargo alert specifically too. Other really cool thing too is if you look out across the space, there aren't a whole lot of physical solutions in place. We take a really a five step approach which is I call it the five E's. So we look to educate the base, teach people about cargo theft, teach people about loss exposure and their cost of risk on the base value. And that's the hardest thing to start doing because everybody is always strapped for time. The base of the pyramid is really educating folks and trying to get them out there and understand exactly what their exposures are. Then we evaluate. The second pyramid tier is evaluation. We go out there and say, okay, where are you now? How are you looking? What's going on with your current state of your risk management program? What can you do? What's your goal? What are you trying to do? What are you trying to get to? Try to identify where the gap is there. And then from that point we establish a plan. The 30 is establish. So we establish a plan together and work together and try to figure out, okay, we know where we are, we know where we want to go, we know what we need to do to get there now. So we're going to develop a plan together and get it together and then physically be able to go from there and build it a little bit. The fourth tier is execution. Once you have the plan in place, you understand what the exposures are, you got to execute on plan. This is the basis of the whole hold the deal. Plans are great if they are actually execute against versus if they just sit on the shelf. People say, oh yeah, I have a cargo theft risk Management plan? Absolutely. It's right here on the shelf. It's not being used and we're not really executing against it. But the fourth part of that pyramid, obviously, again is execute. You have to execute on the things that we plan or else how are you ever going to physically know if the plans we made are good or bad or if it's just sheer luck? If you're not having cargo theft issues or if you continue to have cargo theft issues or any issues that affect the matter, you have to really stop and take a look at it and see, okay, well, what are we doing? Kind of go back to square one. And the fifth is entertain. You know, that's the biggest thing is a little bit of a jokester. But at the same time too, you know, people don't think cargo theft is sexy. People don't think insurance risk management is sexy. I do. I love it. It's my passion by far. I could literally geek out to talking about trucking and transportation insurance all day long. God knows I wouldn't bore anybody with that. But it's what we do, it's what we love to do. And generally speaking, I said even I'd like to say a little fun sometimes, as scary as that might be. So some more interesting things and kind of the point back about physical things you can do to prevent cargo theft and cargo theft losses, specifically one, develop the plan. Have a good plan in place from an operational standpoint, from a physical standpoint, you have an idea of what exposures you have out there. What are you going to do? How spread out is your fleet, what are your operational exposures there? What can you do to identify those exposures and really try to get to the bottom of it versus saying, okay, what's going on here? And all of a sudden you have a cargo theft loss and everybody's pointing fingers versus if you have the ounce of prevention ahead of time, it sure beats the pounding cure afterwards. So with that too, you have to look at it and say, okay, what are we doing with our employees? Are we going through and we are actually physically doing a full 50 state, federal and state background check on these guys and girls. Is this something that we're doing or we're just saying we're doing pre hire? During their employment, Things happen as people are employed. It's not like they stop living and doing things as time goes on. The screening and measurement of your employees doesn't stop once you hire them. It should be consistent and a constant thing. Then after you look at everything there too, from an operational Standpoint, trying to teach your drivers and try to teach your employees to be situationally aware, having that understanding of, okay, these are the things that we have, these are the exposures that we see out there. These are things we have to do to physically go out and understand our surroundings. A lot of times too, you'll hear me talk about hot zones where things are, but you also hear me talk about red zones too. We always say, stay out of the red zone, get out of the red zone, do everything you can to get out of the red zone. So the red zone is the 250 mile essentially perimeter that you, that surrounds a pickup location. So what we found in the past is that drivers will, you know, it happens where they'll not be fully rested, they won't have a drink break or they have to stop and you know, have a dinner or whatever. You know, they're human beings obviously. But the deal is if you can get them to the ship location when they're fully rested, they've had food, they've had water, they've taken care of all their facility needs and they're ready to haul, they have hours at that point too. The most critical time period is get them out of that 250 miles. Save obviously doing their FMCSA, the regulatory mandated inspections, but get them out of that 250 miles as quickly as possible. Because what will happen is a lot of folks will the organized crime rings around the country or even the semi organized crime rings will actually be more sophisticated and target different carriers and say, okay, well you know that, you know, this company's hauling this product from this location and they're very smart about it. You know, it's interesting to see how things have turned out, but they continuously amaze us in terms of what they do and how they do it to defeat things. But that's the biggest thing too. I mean, heavy drivers being a situation where get them out of that 250 mile radius as quickly as possible. Because if they are being followed, generally the, the bad guys typically fall off after 200 to 250 miles is what we found. So get them out of that red zone, make them situationally aware. The second thing is just if you do have to stop in that 250 miles, if you do have to stop at all, Obviously I said 80%, 85%, 90% of all cargo thefts are dealing with unattended vehicles. It's the trailers or tractors and trailers that are sitting there unattended, full of product and just begging for somebody to come and pick them up. Obviously the most important things you do from a physical security basis are if it's at a terminal location, have fences, have the locks in place, do what you're supposed to do in terms of that. There are lots of different opportunities to be able to enter into there. Even if you have fences, even if you have locks, those are easily defeated. You can even get the best stuff on the market. And that might even happen. You could explore different things like having a geofence location. So you can put, I know there's a number of different products out there these days too, but you can put a geofence beacon at the location of the terminal and have all your trailers geofenced. And once they, if they leave that particular area that you have geofenced in, then it sends an automatic alert to anybody who's on the contact list for that geofence. So that's actually a pretty cool newer technology. The prices are actually coming out pretty substantially. So it's making the adoption a little more widespread, which is great. It's going to be interesting to see how that turns out too. So obviously lock the doors, windows, those kind of things too. Those are really kind of the no brainer things that they're typically seen even backing trailers up against physical barriers like trees and or edges, parking lot or even other trailers. That sometimes helps as well. But by far the number one thing that I've found in my practice and then just over the last five or ten years of underwriting truck insurance is air cuff locks. I don't know if anybody, you know, if you're familiar with air cuff locks or not, but what air cuff lock does essentially just does exactly what it says. It locks the air cuffs. It's about $75, $80 each. And you know, if you're, especially if you're hauling high hazardous or high value goods, it's definitely a great idea to have air cuff lock in the actual tractor and you know, versus simply having, you know, any other kind of, you know, landing gear lock or kingpin lock. Those are okay and those are deterrent sometimes. But what we found previously is that nobody can physically defeat within any kind of reasonable amount of time an actual air cuff lock. So $75. There's a number of different websites out there that sell them. A couple are better than others. I can't say specifically who, but definitely check them out. Just Google air cuff lock and see what pulls up. And you know, it works. It absolutely works. We've seen it time and time again. If a driver has an aircraft lock Purchased engaged. And if there's an attempted theft, it usually is just, that's just an attempted theft. And that essentially disables the aircraft from being engaged. And the tractor is inoperable at that point. They can't move the tractor without getting a tow truck in there. And that's a little more conspicuous. And then a heavy duty padlock on the back obviously too, it's not necessarily going to stop anybody for a long period of time. But a lot of times too it's about outrunning the bear. Right. So you have to physically get in there and try to get folks to understand, you know, it's, it's the little things that count sometimes. And then even more operationally too, you know, don't have your folks share loads or share information about loads. What they're hauling, where they're going, what they're doing, different lanes they're hauling in, especially if they're hauling that lane on a regular basis. You know, it goes back to situational awareness a little bit. But too, but with the social media the way it is these days as well, it's quite easy for anybody to go out there and say, oh okay, yeah, I'm just talking to my wife. But who else might be listening to. And the way things are going, it's been crazy. We're starting to see more and more advanced features like broken seals that have been replicated with 3D printed seals. That happened in 2014, 2015. It kind of broke on the scene with the cost of 3D printers. I mean you can get one at frickin Barnes and Noble now. So you know, it's a little bit different. That's something that's definitely kind of emergent and it's a little harder to defeat. The other thing too is that if you're going out there and looking at everything that's physically out there and ways to deter theft, it's not much different than it has been for the last five or 10 years. And the other thing too, you think, okay, we have Qualcomm on the system, we have Qualcomm on the tractor. That's going to be a pretty efficient, effective theft deterrent device. But obviously the thieves come in and cut the Qualcomm system. It's the first thing they do. So if you don't have actual embedded GPS tracking devices inside the tractor and the trailer, and sometimes even depending on the commodities that they're carrying inside the actual cargo itself, you know, then that's a lot different. And even these days too, with the way the the GPS is. We've seen GPS jammers really come become more, more in fad over the last 12 to 18 months as well. So that's been even more interesting. You see the GPS jammers happening and, and from that point too, it's just interesting to see how, how that's being defeated. Again. This, like any other business, cargo theft is a business for many, many people and they have to evolve and innovate just like every other business out there, right? So as time goes on, it'll be interesting to see how they innovate. We have to come back and innovate again. Trying to beat them and hopefully continue to beat them. It's three o'. Clock. Not everything I had by far, obviously. I'm so sorry. Everything looked worked out like it did. I'm going to keep talking for a few minutes. If you have to drop off, I completely understand. If you want to stick around, I appreciate that too and we'll just continue on from there. Again, if you have to drop off, I really appreciate you coming today. Thank you very much for everything. I'll put my contact information up here for you again. Carrier Solutions, my Safety Manager is our online community can be found at mysafetymanager.com Carrier Risk Solutions is online at www.carrierrisksolutions.com if you want to email me, my email address and phone number is up there as well. Love to reach out to you and talk with you a little bit if you have any questions, comments or concerns about anything or if you want to talk about my Safety Manager community too, that's something again that we've put a lot of resources, energy and effort into. We really think it solves the need out there for a lot of motor carriers and a lot of freight brokers as well, which has been interesting too. That's been a couple different interesting conversions for freight brokers as well. So definitely a good idea to have folks go out there and check it out. Something we found too has been really interesting is a lot of insurance agents have found that it's easier and more interesting value proposition kind of driving a wedge between them and the competition to have their safety services taken care of by us kind of on an outsourced basis. So it's a full package of risk and insurance solutions for that agency and they have the ability to go through the mycarrier or my Safety Manager website and get the services they need and deserve at a very reasonable cost. It's only $19 a month to join and there are discounts too if you have bulk signups. So if you're interested in that obviously too. Again, CarrierRisksolutions.com, mySafetyManager.com email me at Stucker CarryRisk Solutions or give me a phone call. Love to chat more about that. Just getting back to the, you know, ways to physically defeat some of these, some of this cargo theft we're seeing out there too on the fictitious pickups and those types, those are a little harder to defeat. We've also developed a product called Carrier Cert which is essentially replaces the traditional certificate of insurance. So you have the certificates out there now, it shows you a $250,000 limit with Hartford and $1,000 deductible. And the insurance agent may or may not just depend and put whatever limits on there for reefer breakdown. Sometimes that happens, sometimes it doesn't. The most interesting thing and coolest thing is that with Carrier Cert, what it does is we actually go through and we actually physically look at the individual cargo insurance policy for that motor carrier and we can turn around and provide that information back to the freight broker or to our other client who might be interested in finding out that information. So instead of just having a simple, sorry, having something as simple as an old time, you know, accordance certificate of insurance, they actually have real piece of paper that has actionable information. And we also, or when we fill those out, we're asking to be named as certificate holders too. So if there's a change in the insurance policy or a change in the status of the insurance, we're notified. And we also have an understanding too. We have a good diary system. So if the policy is coming up for renewal, it's only really good for a year or however long the policy period lasts. Because that's the biggest thing about cargo insurance policies is they're incredibly different. Every single one of them is different, in fact, which is interesting. It's a lot different than auto liability or auto physical damage or any other real estate insurance policy out there. It's a manuscript policy, it's written on inland marine forms and everyone is different than others. Kind of along the same vein, going back to the cargo theft exposure, it's a simple process of understanding what those loss exposures are and then being able to physically go out to the insurance market insurance brokers and say, okay, this is what my exposure is, this is what I need to make sure I'm covered for. And then the insurance agent is they're incumbent upon them to go out and physically find that coverage for You a lot of times too, as time has progressed, that's become harder and harder for folks to do and find. The insurance market tightens up a little bit. Different classes of business are still kind of loosey goosey out there, but you look at everything else. The transportation lines are actually holding up pretty well in terms of a rating structure, but the losses are there to support those rates that the insurance carriers are still asking for. So it's interesting to see. But the way the cargo, the way carrier cert, the way that defeats or helps to defeat fictitious pickups, you is we actually physically verify the information with the insurance agent. So we're talking to the insurance agent when we get that cargo policy from them. So what happens is in a lot of situations, you'll have the carrier or you'll have the criminal act as a carrier and they'll act as the insurance agent at the same time too. So they have a burner phone in the left hand and they'll be ABC carrier, and they'll have a burner phone in the right hand and they'll be ABC Insurance Agency. You'll call up and say, oh, yeah, yeah, he has a $250,000 limit with Hartford. Yep, he's good to go. And then the unsuspecting freight broker, the unsuspecting carrier who's interlining will go out and say, okay, well, they're good to go. We talked to the insurance agent. We're good. But we've seen that time and time again, probably at least two dozen times that I can recall over the last probably 12 to 18 months or so where they've had that kind of burner phone situation. It's just, again, it's another idea, another invention, another innovation, another way that these folks have figured out how to physically get out there and innovate their. Their craft in a way. So trying to stay two steps ahead of it, they've kind of figured out the insurance certificate deal. So that's another great thing about carrier cert and what it does. I mean, it's part of physically being able to go out there and understand one, that they do have coverage. So we can identify what coverages they do have and then we can say, okay. We've also ran through our verification process, which is a couple different steps, including, again, like I said, we go through and we actually physically talk to the insurance agency and we actually make sure that they do have a physical storefront. We can see where they are, they're located. A good tip for everybody too, without even having to get a carrier certificate is simply saying, okay, well, if I get a certificate of insurance from somebody, the very first thing that I would do is turn around and not take the information from that certificate. Simply go on Google and just say, okay, if it says greatest insurance agency in America, okay, that's great. That's what it says. You turn around on Google and type in greatest insurance agency. If the phone number specific details match up or they don't, that's an easy way, kind of out of the gate, throw the red flag and maybe until you check in and that's become a larger exposure over the last couple, probably, like I said, 12 to 18 months. So I appreciate it. You have no idea. You're rock stars. Thank you for everything you've done. Again, my phone number contact Information is here. CarrierRisksolutions.com, mySafetyManager.coms TuckerRisksolutions.com and my phone number is there too, if you have any questions, comments or concerns. Apart from that, if you'd like to shoot me over an email or give me a phone call,