It’s not news that cargo theft has been rising as it’s been a problem for more than a year. It continues to be a huge issue in that it causes significant financial losses and disruptions to supply chains around the globe. Cargo theft affects many industries.
The rise in cargo theft can be attributed to various factors, including economic conditions, evolving criminal tactics, and the increasing value of goods in transit. To protect their assets and maintain the integrity of their supply chains, businesses must understand the causes behind the surge in cargo theft and the heightened risk.
They need to review their logistics and supply chain processes. In doing the review and understanding the causes, they’ll be in a better position to develop and implement effective strategies to mitigate these risks.
CBS News interviewed CargoNet’s Keith Lewis who oversees operations. “What we’re going to see next year is probably going to be similar to what we’re going to see this year, as far as electronics and the same type of commodities,” said Keith Lewis. “I don’t see us coming out of that for a few years.”
Understanding the Causes of Cargo Theft
Cargo theft has multiplied in recent years to the point where companies need to act with a focus on protecting their cargo. The numbers support the need to do this. CargoNet 2022 Supply Chain Risk Trends Analysis reports cargo theft jumped by 15% in 2022. For the year, CargoNet documented 1,778 supply chain risk events occurring in the U.S. and Canada. The estimated total loss value of cargo theft in 2022 was $223 million.
Cargo thieves most often target parking lots, warehouses, and distribution centers. CargoNet indicates almost half of the cargo thefts happened in California, Florida, and Texas. Just because you don’t conduct business in these three states doesn’t mean you don’t have anything to worry about. As an example, Georgia experienced a 34% year-over-year increase in theft as organized crime targeted the Port of Savannah due to the increase in cargo traffic.
The CBS news story goes on to explain thieves are doing the most damage by pilfering items from trucks. They may steal a few pallets from parked trucks on their way to a distribution center or warehouse. This crime is challenging to catch because truck drivers often don’t realize the cargo is missing until after the criminals are long gone.
As a result, they don’t know which law enforcement to contact about the theft. This is why cargo theft is most likely largely underreported. It’s not intentional but rather because the location of the theft is unknown, and it isn’t reported.
Here are some of the causes of the growing number of cargo thefts.
Economic conditions
The state of the economy considerably affects cargo theft rates. Economic downturns like a recession tend to lead to an increase in criminal activity. Data after data supports the connection between recessions and crime rates. Individuals and organized crime gangs take advantage of the situation to search for the best sources where they will make the most money on reselling stolen goods.
The economic instability resulting from the COVID-19 pandemic further exacerbated this trend. Higher unemployment rates and financial distress encouraged criminal enterprises to target valuable cargo.
Evolving criminal tactics
Cargo thieves have become increasingly sophisticated, adapting their methods to exploit vulnerabilities in supply chain operations. Criminals, especially organized crime rings, often employ technology to track shipments, communicate with accomplices, and identify valuable targets. GPS tracking, encrypted communication apps, and social engineering techniques have become common tools in their arsenal. They have the resources to pull off the most elaborate crimes. FreightWaves indicates nine out of 10 cargo thefts have been committed by organized crime.
Travelers transportation lead and crime and theft specialist Scott Cornell tells FreightWaves that these crime rings hide outside warehouses and distribution centers where they monitor trucks or shipments. Crime rings and the black market can adjust to market demand faster than the supply chain can.
“These criminals can react, turn on a dime, react to market trends very quickly,” says Danny Ramon, an intelligence and response manager at Overhaul. “Anything that has retail purchasing restrictions is going to be big. Anything that’s bearing a bigger brunt of inflation or product shortages, for whatever reason, whether that’s because of flooding in California or avian flu, anything causing things to go up and desirability to go up in price because there’s a shortage is definitely going to be targeted.”
One surging criminal tactic is fictitious cargo pickups. CargoNet data shows a 600% increase year-over-year in fictitious pickups. Again, organized crime rings have the resources to pull off this elaborate scheme. The way it works is that a thief pretends to be a representative from a recognized freight company. They negotiate a price for the load with the brokers. They’ll pick up the load and disappear.
Eventually, the broker will notice the items did not reach their destination. The broker calls the trucking company to confirm they did not pick up the load.
High-value goods
The value of goods in transit is surging. This includes traditional high-value cargo like electronics, pharmaceuticals, and luxury goods as well as everyday essentials such as electronics and household items as well as food and beverage.
Insider threats
Cargo theft is not always the work of outsiders. Insider threats by employees and contractors can play a significant role in facilitating theft. These individuals often have access to sensitive information and may collaborate with external criminals to execute thefts. They know the security system and business processes, which allows them to spot vulnerabilities.
Regulatory gaps
In some regions, regulatory gaps and enforcement challenges create an environment that allows cargo theft to thrive. Criminal organizations exploit these weaknesses by targeting areas with lax security measures, insufficient law enforcement resources, or inconsistent enforcement of cargo theft laws.
Mitigating Cargo Theft Risks
A cargo theft risk mitigation strategy needs to include layered security. Having multiple security barriers is the most effective way to mitigate risks of cargo theft and other crimes. It’s also important to factor in people because they can make a mistake that leads to theft, or they could be an internal threat. Here are top ways to help mitigate cargo theft risks.
Enhanced security measures
Investing in robust security measures is crucial in helping to mitigate cargo theft risks. This includes installing security cameras, monitoring the cameras, and using tracking systems in warehouses, vehicles, and along shipping routes. Implementing an access control system can further help deter criminals. You can level up your security by integrating video surveillance with an access control system.
Cybersecurity
Organized crime has the technology to commit their elaborate crimes. Therefore, businesses must bolster their cybersecurity efforts. Safeguarding company-sensitive information from exploitation requires secure communication channels, implementing firewalls, and regularly updating software. Better yet, invest in the convergence of physical and cyber security. This is a holistic approach to securing both the physical perimeter information technology assets.
Employee training and screening
One way to reduce the chances of internal threats is by educating employees about the risks of cargo theft and conducting thorough background checks. Promote a culture of security and provide clear guidelines on reporting suspicious behavior to help prevent collusion with outsiders.
People are the weakest link in a company’s security. They could make a mistake that could make it easier for someone to commit a crime. Security training should be mandatory and occur at least once a year. Employees need to sign off on the training indicating they will follow procedures.
Route planning and monitoring
Consider investing in advanced logistics and route planning software to optimize transportation routes and reduce exposure to theft-prone areas. Real-time monitoring of shipments using GPS tracking systems can help detect and respond to potential threats promptly. Be aware that some organized crime rings have the tools to deactivate the GPS. It’s still worth considering GPS trackers.
Collaborating with law enforcement
Some regions have law enforcement units dedicated to combatting cargo theft. Establish strong partnerships with local law enforcement agencies and cargo theft task forces. Sharing information and intelligence with them can aid in the identification and apprehension of cargo thieves. You might be able to work with a security vendor like ECAM that already has strong partnerships with law enforcement organizations across the U.S. and Canada.
Cargo container security
Use tamper-evident seals and locking systems for cargo containers. There are organized crime rings that have the equipment to print copies of seals. One way to help deter their use is to randomize the seals. Another option is to investigate technology like blockchain to track the movement of goods and ensure the integrity of shipments.
Insurance and risk management
Regularly review and update cargo insurance policies to ensure they adequately cover potential losses due to theft. Collaborate with risk management experts to assess vulnerabilities in the supply chain and develop strategies to mitigate them. Investing in the right security solutions like video surveillance with remote monitoring, may potentially help reduce your insurance premiums. Talk to your insurance provider about it.
Supply chain transparency
Promote transparency within the supply chain by sharing information with trusted partners. Collaborate with suppliers, carriers, and logistics providers to implement security protocols and ensure that everyone is aligned in mitigating cargo theft risks.
Legislative advocacy
Advocate for stronger cargo theft legislation and increased enforcement in areas where regulatory gaps exist. Engage with industry associations and government agencies to raise awareness of the issue and push for more effective regulations.
Moving Forward
The surge in cargo theft is a complex problem driven by economic conditions, evolving criminal tactics, and the increasing value of goods in transit. Mitigating these risks requires a multifaceted approach, including enhanced security measures, cybersecurity, employee training, collaboration with law enforcement, and legislative advocacy.
Businesses must prioritize the protection of their assets and supply chains to avoid the significant financial losses and disruptions associated with cargo theft. By understanding the causes and implementing effective strategies, organizations can navigate these challenges and maintain the integrity of their supply chains. Doing these things can also help mitigate risks for other crimes and challenges.
To learn more about mitigating cargo theft risks with security cameras and remote monitoring, check out the guide to Remote Video Surveillance: More Than Just Catching Criminals. For a customized security plan that protects your cargo and maximizes your ROI, contact us.
