Issue 51 (9)/ September 2011

Cargo thieves using increasingly sophisticated scams

"This is a new way that these thieves are operating," said Richard Kirk, vp of CargoNet, a Jersey City, N.J., division of the Insurance Services Offices Inc.'s crime analytics unit. The fraudsters, tapping the latest technology, can take company information from the Internet to make it appear they are a legitimate trucking firm, he said.

Sources say cargo thieves will even go so far as setting up a shell company with a website to add legitimacy, then place bids on electronic "broker load boards" to haul freight that shippers need help in delivering. "If they win work off the board, they walk in and take the cargo," Mr. Kirk said.

It is difficult to put an exact figure on the cost of cargo theft, sources say, but they agree it is at least a billion-dollar problem.

Barry Tarnef, assistant vp and senior risk specialist, loss control services, at Chubb Group of Insurance Cos. in Warren, N.J., said "there are a lot numbers out there and a lot of people floating them, but if I had to hazard a guess, I would say (the cost) is somewhere between $1 billion and $2 billion per year" in the United States.

FreightWatch International (USA) Inc., an Austin, Texas-based logistics security agency that tracks cargo thefts, reported that the overall number of cargo thefts during the first half of the year fell 6.8% from a year earlier, to 433 incidents with an average value of $447,346. Stealing unattended loads remains the most common theft, but FreightWatch and others say trickery is on the rise.

A rash of "deceptive pickups," 15, occurred during the first half of this year vs. just three during the same period last year, according to FreightWatch.

Chubb said industry-wide data the insurer collected showed 32 such incidents in 2010, double the number in 2009.

The weak U.S. economy likely has had an effect, sources said.

"In a down economy, shippers have slim budgets," said Brandon Stroud, vp-loss prevention at Falvey Cargo Underwriting Ltd. in Kingstown, R.I. To save money, some shippers are turning to electronic freight brokerage boards where thieves often prey, he said.

"The sites are not doing the vetting," Mr. Stroud said, "and in one case it was found that the site itself was not legitimate."

He recommends that companies looking to ship cargo deal "only with contracted companies rather than doing one-off shipments."

One form of fraud that is increasing involves setting up a legitimate trucking company on paper, gathering necessary approvals from the Department of Transportation and other sources, and even buying cargo insurance to have a policy available to show clients, Chubb's Mr. Tarnef said.

"They may take a couple of loads; and on the third load, as people get comfortable with them, they steal it," he said.

Consumer electronics, nonperishable food, apparel and pharmaceuticals remain high-target items for thieves, experts say.

"They are targeting high-value commodities," said Jim Howse, a partner with The Transportation Group, a Houston-based brokerage unit of Hub International Ltd. "No one is stealing trucks full of Cheerios."

But there has been an uptick in the theft of cargo containing metals such as copper, aluminum and steel, sources said.

"We have seen a significant increase in the theft of metals" as prices for those materials have risen sharply in recent years, CargoNet's Mr. Kirk said.

Metal cargo thefts soared 62.8% in the first half of the year, to 57 incidents with an average loss valued at $209,619, according to FreightWatch.

Mike McDonald, vp of enterprise risk management at Quality Distribution Inc. in Tampa, Fla., said his company hauls mostly hazardous materials rather than consumer goods, but that cargo also must be protected. "You can't just drive into a Walmart parking lot and leave a truck there. And you are not allowed, in most cases, to take a truck home with you," he said.

Preventing cargo theft takes vigilance, experts advise.

Because thefts sometimes involve cooperation of a trucking company employee, Mr. Howse said some insurers are adding warranties in their cargo policies that state coverage will apply only to loads that are not left unattended and have GPS tracking devices, among other requirements.

www.businessinsurance.com

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A booming trucking industry means a lot of returns for people working in the industry in this province.

Clarke Road Transport has announced that, effective September 11th, it's making a significant increase of five cents per mile to its base rate for all their van owner/operators in Newfoundland and Labrador. The manager of recruitment with Clarke Road Transport, Vaughn Hatcher, will be hosting job fairs this Friday in Gander from 8 a.m. to noon at the Albatross Hotel, and Saturday from 8 a.m. to noon at Clarke Road Transport terminal in Mount Pearl. Hatcher states there are great opportunities for flatbed company drivers too.

CRT area manager for Newfoundland and Labrador, Tony Powell, says this increase, along with an earlier adjustment to their fuel surcharge formula, has resulted in an overall increase of $0.08 per mile for van owner/operators in 2011. He adds the pay has never been better, and, more importantly, it allows people to work and live in this province.

Powell says the future for the trucking industry looks extremely bright for many years to come.

www.vocm.com