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Cargo theft costs are rising in the U.S. as higher-value goods such as vehicles and electronics are targeted, and as inflation pushes up the cost of goods.
Companies can take steps to reduce the risk of theft, including installing tracking technology and hard-locking devices, using teams of drivers, and avoiding theft hotspots, experts say.
The Memorial Day weekend typically sees an uptick in cargo theft, with an average from 2017 to 2021 of 29 events per year over the holiday weekend.
Estimated cargo theft losses in the United States and Canada jumped to $19 million in the first quarter of this year, a 73% increase over the prior-year period even as the number of reported thefts remained unchanged at 319, according to the latest data from Jersey City, New Jersey-based Verisk Analytics Inc.’s CargoNet.
The average loss value in the first quarter was $232,000, a 68% increase over the same period last year and more than double the average loss value reported in the first quarter of 2020, CargoNet said in an analysis released May 19.
Vehicles and accessories, household goods and electronics were the most targeted items in this year’s first quarter, CargoNet reported.
Inflation is pushing up the price of goods, and higher value goods are being targeted for theft, said Keith Lewis, Scottsdale, Arizona-based vice president of operations at CargoNet.
“People are buying more electronics, and more cars are being stolen off car haulers,” Mr. Lewis said.
The significant jump in value also reflects the fact that electronics are one of the top stolen commodities, said Scott Cornell, Phoenix-based transportation lead and crime and theft specialist at Travelers Cos. Inc.
“Cargo theft is often driven by a demand or shortage,” he said. From 2010 to 2020 food and beverage was the No. 1 stolen commodity, but there was a shift to household goods in the pandemic. With the shortage in components such as chips and laptops, it’s “no big surprise” that electronics took the No. 1 spot in 2021 and even into 2022, he said.
Cost-of-living increases have also led to a rise in the theft of consumable goods, said Johnny McCord, CEO and founder of Loadsure Ltd., a London-based insurtech managing general agent and Lloyd’s coverholder.
Two of its large losses last year involved the theft of truckloads of beef in Texas, Mr. McCord said. One was picked up from a plant in fictitious circumstances and the other occurred when a vehicle was left unattended, Mr. McCord said.
Fictitious pickup scams involve the use of identity theft to steal cargo, either by getting a legitimate carrier to deliver the load to a chosen destination or by posing as the carrier and driving off with the load, according to the National Insurance Crime Bureau.
“You would think how could you disperse over half a million dollars' worth of chilled beef so quickly, how can that disappear? It’s organized crime groups that are so sophisticated,” Mr. McCord said.
Some of the steps companies can take to reduce the risk of theft include installing state-of-the-art locks on trailers, using a team of drivers so that a truck only stops for fuel and embedding covert tracking devices in a shipment, Mr. Lewis said.
Companies need to train drivers and share information with them on theft hot spots around the country and ensure they don’t park in so-called “red zones” within 150 miles of a pickup, Mr. Cornell said. Much organized crime cargo theft happens within 200 miles of a pickup, according to experts.
Security protocols should be customized based on the commodity, rather than the value, Mr. Cornell said.
“We teach clients to think high-target loads. Don’t concentrate on the value as much as you concentrate on how frequently it is targeted and where do you have to defend the cargo you’re putting out on the road,” he said.
Many small and midsize businesses rely on cargo carriers’ liability insurance to protect their goods in transit, which pays out when there is a theft loss but only in the event they can prove the carrier is negligent, and then only on the tariff, Mr. McCord said. More than 60% of cargo currently in transit is estimated to be under or uninsured.
Carrier liability policies typically settle claims based on a tariff, which limits their liability for lost or damaged cargo to an amount per pound.
“SMBs don’t have the flexibility that enterprises do from a cash flow perspective. A large loss of a full truckload of beef without insurance can destroy a business,” he said.