Getting the Goods
THIEVES CARRYING FAR BETTER WEAPONRY than police violently hijack an 18-wheeler at a road block. A gang of criminals stealthily pass cargo from a moving truck to a trailing car, without the knowledge of the truck driver. A team of crooks spends months establishing a legitimate-looking trucking company only to drive off with millions of dollars’ worth of cargo, never to be seen again. These may sound like scenes from an action movie, but they are just a few examples of the tactics being used around the world to steal cargo in transit, according to the FreightWatch International Supply Chain Intelligence Center’s 2013 Global Cargo Theft Threat Assessment. The report looks at cargo theft by country based on its own data and data from law enforcement and industry reports. The increase in cargo theft from 2011 to 2012 varied widely from country to country. While the number in the United States was essentially the same for the year, it was up 24 percent in Europe, where Germany accounted for almost half of the total loss value reported.
In terms of raw numbers, as opposed to percentage increases, the United States and Russia were the countries most at risk for cargo theft.
Globalization is a major factor in cargo crime simply because it sets raw materials and goods in transit more often, increasing the opportunities for theft. Compounding the problem, law enforcement officials in most countries don’t have the monetary or political backing necessary to proactively combat cargo theft, leaving the supply chain industry to tackle the problem with countermeasures on its own in many cases.
What They Steal
Thieves track what the market values, and this seems to vary only slightly by country. For example, the lead categories in the United States are food and drink, metals, and electronics, in that order. That’s similar elsewhere, but there are some differences. Nearly a third of what is stolen in Germany relates to building and industrial materials, mostly metals, with electronics ranking second, while in France there is a sharp rise in targeting of high-value consumer care products, especially perfume, followed by clothes and electronics.
FreightWatch International’s annual report also found wide variations in the techniques used by thieves. For example, in Mexico and Brazil, thieves most often resort to violent hijackings to steal cargo. In these two regions, almost 90 percent of thefts occurred through all-out assaults on in-transit shipments. Hijackings in these areas are also turning high-tech as thieves, for example, use GPS jammers to disable electronic monitoring devices embedded in the cargo. But the technology doesn’t always serve them as well as they think. The GPS jamming devices are often not strong enough to completely disrupt the signal of the tracking device in the cargo, for instance, says Ron Greene, vice president of FreightWatch International.
By contrast, cargo thieves in the United States resort to violence in only 2 percent of the cases. More often, they steal stationary and unattended trailers from unsecured parking lots. They also sometimes use guile and deception to get cargo. For example, thieves are increasingly creating what appear to be legitimate trucking companies by registering the “company” with the U.S. Department of Commerce, getting insurance and an address, and bidding on loads of cargo through a broker. Once they win the bid—which isn’t hard since they don’t have to worry about normal business issues—they will pick up the load, then abscond with it. The report noted that these types of deceptive pickups in the United States have increased 763 percent since 2009, though they still comprise only a small percentage of all incidents.
Deception was also on the rise in other countries, including Italy and France.
Government and law enforcement response to cargo theft tends to be underwhelming due to legal technicalities and a lack of resources and education, according to J.J. Coughlin, chairman of the Southwest Transportation Security Council and author of Cargo Crime: Security and Theft Prevention, published in October 2012, who spoke with Security Management about cargo theft trends.
Of course, these responses vary by country. The FreightWatch report notes that the Colombian government has taken steps to reduce cargo theft by increasing highway security forces and crime prevention operations in specific regions; 31 cargo theft gangs were disbanded in 2012, compared with 15 in 2011. As a result, there was a 23 percent decrease in cargo theft from 2011 to 2012.
In some regions of the United Kingdom as well, “law enforcement authorities have stepped up efforts to combat freight theft with new and innovative initiatives in 2012,” the report states. And in Malaysia, the government took a stand against cargo theft in an effort to increase foreign investments and nurture the business culture. The government passed regulations that allowed law enforcement officials to crack down on cargo theft rings, and the number of thefts in Malaysia has fallen drastically over the past few years, Greene says. But the report notes that Italy lacks a viable “law enforcement strategy to tackle cargo crime, which of course means criminals face few deterrents….”
Law enforcement is also hindered by the lack of reporting. In regions such as Europe and Africa, where cargo theft is notoriously underreported, companies may be wary of reporting a theft because it could adversely affect their reputation or result in higher insurance rates. And when thefts are reported, it is often difficult to figure out which law enforcement jurisdiction is in charge because thieves take the stolen cargo across internal jurisdictions and across national borders.
Another problem is that there are no specific statutes on cargo theft in most countries. If cargo is stolen along with a truck or trailer, for example, it is considered a vehicle theft and treated as such. The lack of laws on cargo theft also means most of the thefts will go down in the books as vehicle or property thefts, so cargo theft appears essentially nonexistent and is not addressed by law enforcement officials, Coughlin says.
Coughlin adds that it is difficult to report deceptive pickups, because to a law enforcement officer unfamiliar with cargo theft trends, the pickup appears to be legitimate.
The cultural and political atmosphere of a country also plays a role in how law enforcement responds to cargo theft, Greene says. In many countries, law enforcement is not proactive in preventing cargo theft because law enforcement agencies lack sufficient political support and monetary resources.
Law enforcement is told to direct its resources toward higher priority issues—such as terrorism or violent crimes—versus taking time to tackle what is perceived as “a passive property crime that has limited coverage from the media or the political environment,” Greene says.
Coughlin sees that too. In the United States, the FBI is supposed to investigate all cargo thefts where thieves cross state borders. However, the bureau rarely gets involved, he says.
“Only seven dedicated law enforcement cargo task forces exist in the United States,” Coughlin wrote in Cargo Crime. “There are areas in the country where task forces are sorely needed but attempts to establish them have been unsuccessful.”
The bottom line is that in many regions—including the United States, where the loss per theft averages $200,000—the government does not take a proactive stance in preventing cargo theft, Coughlin tells Security Management. “Unless it’s a huge theft, like millions or billions of dollars, or unless Osama bin Laden’s cousin is driving the truck, they don’t really care,” he says.
In the absence of full law enforcement engagement, the industry has had to build its own response network. In the United States, nonprofit councils and organizations have banded together to keep track of incidents and train law enforcement officers on how to respond to cargo theft.
“One of the biggest problems that I see is that companies really don’t have a total awareness of what the risks are, and it’s hard for them to have a really good plan, whether it’s prevention or response, if they don’t understand the risk,” Coughlin notes.
To address the problem, organizations such as the Southwest Transportation Security Council are striving to educate companies on the realities of cargo theft. There are eight regional cargo security councils across the United States, and five of those participate in “Be On the Lookout” (BOLO) alerts. If cargo is stolen, a BOLO alert is sent out to both members of the councils and law enforcement officials.
The councils focus on educating law enforcement officials and corporations on cargo theft trends. When people know how the thieves operate, they know better what to look for and can employ preventive measures.
In addition, if law enforcement officials find a warehouse full of stolen cargo, they can contact the councils or look at the BOLO alerts to find out where the cargo might have come from. That can be an important factor in helping to catch the thieves or spot patterns of activity.
Data. Thefts are logged in the Supply Chain Information Sharing and Analysis database, and the data is used to identify trends and report them to both the public and private sectors. (This database is one of the sources of information in the FreightWatch report.)
Collecting and analyzing accurate data is important to increasing law enforcement response and government legislation on cargo theft, Greene says. Without clear statistics, the public, the supply chain industry, local law enforcement, and the government are unaware of the threat cargo theft poses to the economy.
“Without good data, it’s hard to make a business case for legislation and [for] law enforcement being proactive,” Greene says.
As an example of what good information can achieve, Greene notes that data was key to passing a New Jersey law that cracks down on cargo thieves. Under the new law passed in May, thieves will face fines up to five times the value of the stolen property.
There are steps companies can take to reduce the risk. One obvious safeguard is to carefully vet partners. Greene says that companies inadvertently create opportunities for ambitious thieves to exploit supply chains when they don’t do their due diligence. For example, companies open themselves up to deceptive pickups or corrupt drivers by using a broker to find a trucking company to ship cargo.
Security consultant Jim McGuffey, who specialized in the armored car industry for more than 30 years, advises companies to conduct background checks on warehouse employees, truck drivers, the distributing team—anyone who comes in contact with the company’s cargo during the distribution process.
He also emphasizes the importance of training staff in basic security procedures. Managers should also make sure that staff know and follow the policies in place for parking and securing trucks, reporting suspicious activities, and handling the cargo.
Companies should develop policies that comport with the nature of the threat in each geographic location, taking the type of cargo and typical tactics used in the area into consideration. And managers should periodically audit policies to make sure they are effective and up to date.
McGuffey warns about “jumping on the latest bandwagon” involving technology. While that’s one option in any theft-prevention effort, he says that the basic tools used to prevent cargo theft—policy, education, background checks—remain largely the same.
And before implementing any new technology or policy, the company should conduct a thorough security analysis “to make sure it’s going to do what they expect it to do, it’s cost effective, and there are no gaps between the old system and the new system,” he says.
Despite the steps some governments have taken to curb cargo theft, Greene says that the supply chain industry will have to continue leading the fight against cargo thieves. Moreover, these solutions have to be somewhat specific to the location. Given that thieves’ motives and techniques and government responses differ drastically from region to region, it is difficult to figure out a global solution to cargo theft, says Greene.
But one way to combat cargo theft in any location is to continue educating both corporations and law enforcement officials, Coughlin says. A surprising number of corporations do not know current theft statistics or how thieves operate, and it makes them much more susceptible to theft, he says. And law enforcement officials are rarely trained on how to respond to cargo theft incidents. That makes it easier for gangs to steal cargo without getting caught.
It’s really about awareness, about understanding how thieves operate, what they target, and when, according to Coughlin. “If I’m an operations manager for a trucking company, and I understand what the risks are, then I can put a program in place…that will deal with these issues,” he explains. And it doesn’t have to cost a lot of money, he says.
Cooperation. Another key is to have industry and law enforcement, along with other stakeholders, sharing information and working together. Security councils across the United States work with the National Insurance Crime Bureau (NICB), a nonprofit that works with law enforcement officials to address insurance crimes. The NICB has cargo theft training programs for law enforcement officials and helps them know what to look for, Coughlin says.
Training must evolve, however, because thieves are quickly adapting to law enforcement and industry responses, leaving companies struggling to keep up with thieves’ increasingly sophisticated tactics, says Greene. “It’s an arms race,” he says. “You protect the cargo one way using a certain technique, you have a procedure, and it may work for a while, but then cargo thieves find a way to try to get around that security countermeasure. It’s an ever-evolving process in terms of mitigating supply-chain risk.”
Lilly Chapa is an assistant editor at Security Management.