WASHINGTON — Much of the nation’s cargo theft problem may be hidden from sight – kept off the books intentionally by trucking companies attempting to control costs.
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New data from the American Transportation Research Institute (ATRI) reveals that more than two-thirds of all motor carrier cargo theft incidents are valued below $50,000, meaning a significant share falls below typical deductibles.
This financial threshold, combined with the fear of escalating premiums, leads over 40% of motor carriers to avoid reporting all theft incidents to their insurance carriers.
“Unfortunately, we’ve reached a point where cargo theft has become a standard cost of doing business for trucking companies, with consumers ultimately footing the bill for many billions of dollars in losses,” said Ben Banks, president of trucking and logistics company TCW, in a press statement.
“Something must be done to stop these costly crimes. ATRI’s new research on cargo theft puts real-world numbers to the issue and will hopefully motivate stakeholders to act quickly on solutions.”
Recent data on losses due to cargo theft across freight modes has been pegged at $15 billion to $35 billion annually. But ATRI’s report, based on survey responses from 95 for-hire motor carriers representing a total of nearly 90,000 trucks, as well as 28 logistics companies, focused specifically on for-hire trucking.
The survey results found that annual direct costs of cargo stolen from motor carriers in the U.S. ranged from $456.7 million to $937.4 million, with an average loss per incident of $29,108 and loss per registered truck $383.60.
A plurality (31%) of respondents that experienced theft indicated that their insurance deductible for cargo theft ranged from $10,000 to $49,999, with 20% indicating deductibles in the range of $5,000 to $9,999.
“Given that 69.9% of carriers reported an average value per theft of less than $50,000, a significant share of theft incidents are below carriers’ deductibles and thus uncovered by insurance,” according to the report.
“Ultimately, with insurance costs rising, trucking companies will implement any available measure to stabilize or reduce these costs. Such measures include not reporting a cargo theft incident, particularly when it is a lower-value theft or can be handled without insurance company involvement.”
Action items
ATRI summarized research participants’ suggestions on steps needed to address cargo theft, converting them into three “action items”:
Foster “Security Culture” across the Supply Chain
- Train drivers in theft prevention and situational awareness.
- Promote awareness and accountability to all staff.
- Provide support for driver vigilance, including tools for verifying authenticity of documents and reporting suspicious activity.
- Create a company-wide security mindset or “security culture” across the supply chain.
Enact Model State Legislation
Legislative provisions would include:
- Designating Cargo Theft as a Distinct Crime
- Graduated Sentencing for Cargo Theft
- State Task Force/Advisory Board
Develop a Federal-Level Centralized Reporting Agency
Oversight and responsibilities to include:
- Data Collection and Management. A nationwide system for collecting accurate, timely cargo theft information from all levels of law enforcement and private sector stakeholders; and a system that manages and updates the collected data in a quickly accessible and secure database.
- Data Analysis. Methods must be developed for continually analyzing these data to identify evolving trends, risk calculations, and cargo theft performance metrics
- Cross-Jurisdictional Cargo Theft Information Sharing. A method for automatically informing all relevant law enforcement jurisdictions in near-real time of cargo thefts.
- Dissemination of Intelligence. This same program or agency could develop and distribute dashboards, guidelines, trends, patterns and hot spots in real time to all supply chain supply chain stakeholders.
Related articles:
- Sneaker reseller’s arrest highlights surge in US cargo thefts
- Rising cargo theft demands proactive shipping risk management
- Strategic cargo theft is a rapidly growing concern
Click for more FreightWaves articles by John Gallagher.
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