Many businesses today face huge supply chain risks across many areas. The effects of the COVID-19 pandemic have yet to fully resolve, with major ports in China having been placed under lockdown to contain virus surges. Port congestion in North America, the global shortage of semiconductor chips, and fallout from the Russo-Ukrainian war have also placed significant strain on supply chains. These risks often lead to shortage of goods, shipping delays and heightened prices.
Due to these major supply chain risks filling the headlines, businesses may pay less attention to an old but ever-present risk – cargo theft.
According to a report by CargoNet, Verisk’s cargo theft prevention and recovery network, 1,285 supply chain risk events were recorded across the US and Canada in 2021, a 15% year-on-year decrease in activity. Fifty-five percent of these events involved theft of at least one heavy commercial motor vehicle, while 54% of events involved theft of cargo or attempted theft of cargo.
Cargo theft losses across the US and Canada in 2021 totalled US$57.9 million, translating to an average value of US$172,340 per incident. Electronic goods were the most frequent targets, with California emerging as the main hotspot, followed by Texas and Florida.
“Cargo theft is an easy crime to commit for several reasons,” said Keith Lewis (pictured above), vice president of operations at CargoNet. “The supply chain moves at light speed and with a shortage of rolling assets and drivers, security is sometimes bypassed to keep the goods moving.”
According to Lewis, cargo thieves use an assortment of methods to make off with their loot, most often during transit. These include identity theft, pilferages, stealing the full trailer load, warehouse burglaries and inside jobs.
In 2020, cargo thefts saw an increase due to the pandemic, with household items such as cleaning supplies overtaking electronics as the most-stolen items.
“In 2021, we saw levels normalize – a bad choice of word – to 2019 levels,” Lewis said.
The most noticeable effect of supply chain disruption due to cargo theft is cost. Theft losses are passed back to the consumer, making them pay more for goods. However, there are huge overlaps between various supply chain risks.
“We really do not know what the true impact is,” Lewis said. “The empty shelves could be from the logjam at the port, delayed trucks due to weather or other non-criminal factors such as panic buying, which we saw with paper goods during the early days of the pandemic.”
The high price of fuel is also another major factor, as it affects almost every segment of the supply chain.
“The fuel surcharge calculations usually run a few days behind,” Lewis said. “A driver picks up a load in the Midwest and before it is delivered to the West Coast, fuel costs have increased during transit. This and other factors may keep companies from expanding or prevent an entrepreneur from entering the industry.”
Mitigating cargo theft
Lewis offered several tips on how businesses can avoid losses to cargo theft:
- Use intelligence, including knowing where the high-risk areas are, what items are in demand among criminals, and what time of day do they usually strike
- Install GPS/telematics devices on both the truck and the trailer
- Place drivers in teams, especially on high-value loads
- Use high-end padlocks for rear doors, king pin locks, etc. A plastic seal is not a security deterrent
- Park in a safe location (i.e., gated or locked and well-lit)
Technology also plays a major role on both sides. Many cargo thieves are employing technological methods, such as hacking, to gain access to their targets. According to Lewis, technology allows thieves to attack faster and not leave a breadcrumb trail for an investigative follow-up. He said that companies can use CargoNet’s AlertSearch and RouteSearch tools to prevent theft in transit. A sophisticated transport management system uses algorithms to help identify any criminal activity, allowing companies to act sooner and stop the threat.