Many commercial trucking companies will never be impacted by cargo theft, but that doesn’t mean they shouldn’t be prepared. Cargo theft is a multi-million-dollar problem, and like all problems, somebody is going to pay for it.
Like all risks, the risk of cargo theft should be mitigated. Good prevention programs not only keep your driver out of harm’s way, but they can help keep your insurance costs in check. Most insurance providers, such as Reliance Partners, offer coverage for damaged or stolen cargo. Sometimes it comes with a deductible and sometimes there may be a cap on what the provider will pay out. The specifics of your policy will determine that.
For carriers, insurance is a risk management tool, but like anything, if you use that tool too much, it costs more. File too many claims and guess what happens to your rates? File a cargo theft claim, which could run into the hundreds of thousands of dollars or more depending on the cargo, and chances are pretty good you will end up paying more.
In the second quarter of this year, CargoNet reported that tractor theft was down 17% and trailer theft down 29%, but the total loss value of thefts was $17.2 million. In all, there were approximately 150 cargo thefts in the second quarter with the average loss sitting at $202,774.
In 2016, there were 1,614 reported incidents of cargo theft, vehicle theft or supply chain fraud, CargoNet said, with 836 specifically involving stolen cargo. The firm reported 623 stolen tractors and 732 stolen trailers in the United States and Canada in 2016, an 8% increase for tractor thefts over 2015 and a 4% increase for trailers. The average loss in 2016 also topped $200,000, coming in at $206,836.97.
California, Texas and New Jersey are the most likely states for cargo theft.
Popular items for theft include food and beverages followed by household goods. Trucks parked at warehouses were most often targeted followed by unsecured yards.
So how do you keep your insurance costs down and the risk of being a cargo theft victim low? Well, you could not file a claim should you be a victim, but how many smaller carriers and owner-operators can absorb a $200,000 bill? Another alternative is to stop hauling goods.
Or, you could try and minimize your risk of being a victim by taking proactive steps. While stopping cargo theft may not be possible, you can make yourself a less likely target with some simply steps.
It starts by knowing your own employees. Have you vetted your employees properly? Don’t let an inside job be the one to put you under. Secondly, know with whom you are doing business, especially if you are accepting loads from third parties. Are they a trusted provider and do they vet their carriers and shippers? Knowing who you are dealing with can help prevent fictitious pickups where someone posing as your carrier shows up to pick up the load.
Do you use locks and/or alarms on your equipment? If a thief approaches two trailers and one has a lock and one doesn’t, guess which one is most likely to be targeted? There are a growing number of options for locking mechanisms from basic padlocks to more sophisticated remote-operated locks.
Also make sure your drivers, whenever possible, are parking in well-lit areas, and help them achieve that by planning routes that are not only along more heavily traveled lanes, but that can get the driver to a safe place to park for the evening. More thefts occur on Fridays and Saturdays, so scheduling loads to avoid those times when possible can also reduce the risk.
Of course, staying with the cargo is vital. There are times that drivers may need to bobtail somewhere, but limiting those instances will also reduce the chances of theft.
If you have a little extra money to invest in prevention, or typically haul electronics, pharmaceuticals or other high-value items, there are a number of high-tech solutions on the market as well. Equipping trailers with GPS or satellite tracking can help locate a trailer in the case of theft, although the load may no longer be on board when you do. Video cameras, especially those that upload video to the cloud or directly into a fleet’s TMS system, serve as both a deterrent and a vital tool for law enforcement to help identify those responsible.
Adding geofencing and electronic door monitoring that notifies the back office when the trailer doors are opened can also help identify potential theft situations. So can basic vehicle tracking software that identifies when a vehicle is moving, especially if it is not supposed to be moving. For extremely high-valued loads, there is new radio frequency identification (RFID) systems that allow you to place sensors on individual pallets or boxes. They add quite a bit of cost, but if you are moving a million-dollar load, it may be justified.
While no one solution can claim to prevent cargo theft, utilizing a mix of preventive measures can help reduce your exposure and make your insurance adjuster a little happier.
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