Cargo theft is a $30 billion a year business. Although the number of thefts per year have gone down, even something like the Coronavirus disease (COVID-19) pandemic can’t deter thieves.
Food Logistics sits down with Scott Cornell, transportation lead and crime and theft specialist for Travelers, to discuss the current landscape of cargo theft in the cold chain and how transportation and logistics professionals can safeguard their products against cargo theft.
Food Logistics: For starters, what kind of statistics can you share on the state of cargo theft in the United States. Are there certain times of the year that are more prone to cargo theft than others? Are there certain geographical areas more prone to cargo theft than others?
Scott Cornell: The economy, the weather, seasonality and even convenience can all affect what’s happening with cargo theft. Considering the pandemic, an active hurricane season and wildfires in many parts of the country this year, we have already started to see some changes in theft trends, and we anticipate more.
For example, there has been a change in how thieves operate. Instead of taking the entire truckload, many times they are only taking portions of it. According to data from CargoNet, this type of theft increased by 60% in the first quarter of 2020 compared to Q1 last year, and by 34% in the second quarter compared to Q2 2019.
Trends like these ebb and flow, and there are certainly some patterns on when and where cargo thefts occur. Long holiday weekends such as Memorial Day, Independence Day and Labor Day tend to be more active. There is also usually a bump in the fourth quarter because of the holidays.
We can also apply some generalities about geographic areas that are prone to cargo theft. Hot spots like Tennessee and Illinois have large amounts of storage and warehousing, so they are perfect environments for theft. In port states like California, Florida, Georgia, New Jersey, and Texas, there are simply more goods in transit for thieves to target. Speaking of Texas, Houston is one of the country’s top regions for exports, which creates opportunity for fraud. Second-quarter thefts tripled in the state compared to the same period last year.
Food Logistics: Cargo thieves still exist despite the COVID-19 pandemic. Please describe the current landscape of cargo theft in the cold chain.
Cornell: Thieves don’t care that we’re going through tough times. They take advantage of people when they are vulnerable, after catastrophic events and natural disasters, or during economic difficulties, such as we have now because of the pandemic.
In fact, we saw a major change in cargo theft during the last economic downturn. That’s when food and beverage items became the most targeted category as people struggled to afford their basic needs. Food and beverage remains the No. 1 stolen category today, not just because people are hurting financially, but because the evidence is consumed—it simply disappears. Frozen chicken doesn’t have a serial number, and it can’t be traced online like a TV or a video game.
Big events, such as a recession or pandemic, also influence where theft happens. After the 9/11 attacks, for example, there was an industrywide effort to secure the ports, which reduced the amount of theft happening there. As a result, we now see more thefts at places like drop lots and parking lots.
Food Logistics: What are some of the trends pertaining to cargo theft? Are there certain cold food and beverage markets more prone to theft than others, i.e., produce, dairy, etc.?
Cornell: When it comes to the types of food and beverage that thieves steal most, meat and seafood are usually top targets because they’re expensive and easier to sell. Energy drinks and alcohol are also high on the list. Dairy and produce are less likely to be stolen because they are harder to keep fresh. Occasionally, we see spikes in specific food and beverage items, like berries, but not enough to take the top spot. That being said, a few years ago, we saw a lot of nut thefts, particularly in California, so there can be some surprises.
Food Logistics: How can transportation and logistics professionals guard against some of these causes of cargo theft?
Cornell: We recommend a three-tiered approach to guarding against cargo theft.
First, educate drivers, shippers and freight brokers to better recognize threats, especially when drivers are hauling highly targeted commodities like food and beverage. Make sure that they know procedures to guard against areas of vulnerability, like the seals that protect the back doors of trucks.
Second, use hard-locking devices for security to protect the rear doors, but don’t consider that enough.
Thieves are savvy, which brings us to the third tactic of adding technology. This could include covert tracking to recover a stolen load and digital seals with locks built into them for an extra layer of protection. These tools may have been cost-prohibitive in the past, but they are becoming more affordable as the technologies advance.
Click here to hear more about technology that can protect against cargo theft:
Food Logistics: What does the future look like in terms of cargo theft post-COVID-19 pandemic? What should companies be doing now to secure a stronger, more resilient fleet in the future?
Cornell: Cargo thieves continually adapt, so we need to remain vigilant. In addition to following our suggested approaches to security, we recommend seeking an insurance partner that monitors trends, tracks cargo theft events and helps reduce risk through education and recovery. These tactics work best when layered, and experience suggests that none of these tactics is enough on its own.
Food Logistics: Cargo theft insurance—please explain how this works, why it’s necessary, how it helps companies in the future, etc.
Cornell: Insuring against theft is part of a cargo insurance policy. It protects you if all or part of a load goes missing. Given that theft is the second leading cause of loss for cargo, behind loads becoming damaged by being overturned, it’s a significant risk.
Some policies have exclusions on what is covered, so it’s important to read and understand your policy, making sure to know how theft is included.
By having cargo insurance, you not only protect your business today, but you also help protect it in the future. Working with a partner that helps reduce your risk through education and recovery improves the factors considered when it comes time for renewal. The better protected you are today, it’s likely that your renewal rates could be better, along with improved terms and conditions.
Food Logistics: What are some things not addressed above that may be pertinent to our readers?
Cornell: Prevention is especially critical for food and beverage. Let’s say, for example, that a load of electronics goes missing. We can likely recover those goods. Even if we can only find a portion of what was lost, it can be meaningful. However, if thieves open the doors on a truck carrying food and beverage, the entire load is usually destroyed because of contamination risk, regardless of how much or how little has been taken.
The more attention we can bring to the issue of cargo theft and how to prevent it, the better. Taking action today to avoid being a target can save you from losses in the future.