Cargo theft is an ever-present risk in the freight transportation business, but the nature of these crimes has changed in ways that might surprise you.
Worldwide, cargo theft losses total about $50 billion a year, according to Freightwatch International Group. The International Cargo Security Council reports a $25 billion annual cost in the U.S. alone.
Seasonality continues to affect the cargo crime figures. The peaks consistently occur during the summer months and early Q4, ahead of the Christmas rush. October is the busiest month for cargo theft in the U.S.
In the past, high-value goods were the top target for these thieves, but this is no longer the case in the U.S.
Thefts of pharmaceutical products, for example, soared by 283% from 2006 to 2008. Since then the growth rate has been almost flat. To some extent, this falloff could be due to reasons that are unrelated to criminal activity; perhaps the volume of high-value drugs on the market has fallen, for instance. However, experts believe that security measures taken by the industry have reduced the number of robberies.
Makers of consumer care products have not fared so well. The number of thefts in this sector has skyrocketed by 575% over a five-year period.
Low value items, such as beverages and building supplies, are also attracting more attention from the bad guys. In fact, the food/drinks category has replaced electronics–the chief target for four years running–as the most sought after items on the criminals’ shopping lists. Why have the thieves switched to a new modus operandi (M.O.)? There are several reasons.
Traceability of cargo. As technology continues to evolve, so does the ability to trace higher value items on an individual level. Manufacturers serialize most high-end consumer items. Web- and cellular-enabled products have traceability functions which easily locate, identify, and even render stolen items inoperable. Additionally, web bots allow for quick and easy analysis of web-based resale through sites like ebay and Craigslist.
Availability of resale markets. Cargo is generally not stolen for its utility to the thief. Cargo is stolen to generate cash, which funds additional criminal activity. Cargo thieves need resale markets for the stolen merchandise. Economic conditions make deeply discounted branded consumer products desirable, not only for consumers, but also the independent retailer looking for inexpensive inventory. Law enforcement has seen a rise in stolen cargo ending up on store shelves of small, independently owned retailers; commonly the mom and pop groceries in densely populated urban areas.
A notable change in the types of thefts that are occurring is an exponential increase in multi-trailer robberies over the last five years or so. Criminal gangs might take several trailers in a single event.
This latter trend underlines one characteristic of cargo crime that has not changed: its organization. In general, these are not ad hoc, opportunistic heists, but crimes that are perpetrated by organized gangs that plan each job carefully.
These organized criminal groups are routinely using publically available information about supply chains and supply chain providers to further their criminal activity. Identity theft is no longer a risk only for the individual consumer. Today, legitimate business are seeing their information used in the perpetration of cargo theft events. Additionally, establishing an online presence or identity for use in the perpetration of criminal activity is easily achieved and inexpensive. Incorporation, licensing, and insurance procurement can all be completed online with a major credit card.
What can the freight community do to combat cargo theft at a time when its profile is changing? We will take a look at possible responses next week.