Cargo theft: A $5 billion problem?
TORONTO, Ont. – Cargo crime is getting a lot of attention lately, thanks in part to a new study commissioned by the Canadian Trucking Alliance that indicates cargo crime is a $5 billion a year problem in Canada.
The study, aimed at raising awareness of the issue and helping convince lawmakers to provide the resources law enforcement requires to address the problem, also found there’s an increasing prevalence of violence during cargo theft incidences.
The study also uncovered a strong presence of organized crime in cargo theft rings, which provides them with the financial resources to carry out other types of criminal activity.
An executive summary of the study can be downloaded from www.cantruck.ca. Truck News executive editor James Menzies recently caught up with Will Mandau, vice-president of claims with Markel Insurance for some industry reaction to the findings.
TN: It seems the issue of cargo theft is getting a lot of attention these days, thanks in part to this CTA study. Is it safe to say the industry is finally getting organized when it comes to addressing cargo crime?
Mandau: There has been organization over the years in various forms, but now there is a higher profile because of the study.
The CTA has done a good job of elevating that and taking a different approach than in the past to lobby government and provide some statistics that will hopefully give them better support for getting funding and attention on this subject.
TN: I know you can’t discuss the details of the study beyond what was in the executive summary, but was there anything that came out of it that surprised you?
Mandau: Was I surprised? No. There aren’t a lot of reliable, credible statistics out there and even this study talks about it being a $5 billion problem. I don’t necessarily personally agree with that statement, but that was the value that came out from amongst the participants on the panel. But we do not have credible statistics in Canada to support a specific dollar amount of what the problem represents.
TN: Do you think the $5 billion figure is too high or too low?
Mandau: Far too high.
TN: The study found that organized crime is very much to blame for a lot of the cargo theft that is happening today. How sophisticated are these criminals? Do they have their own infrastructure such as warehouses and equipment?
Mandau: They’re very advanced and they’re getting more advanced as we go forward. It’s as if this was an untapped opportunity that organized crime has now taken advantage of and is leveraging.
Yes, they do have warehouses. Yes, they do have a means to acquire equipment to move product quickly and there have been a number of new venues and opportunities for the fencing of stolen property, whether it be flea markets or things like Kijiji and Craigslist and so forth, there are a lot of distribution opportunities available to the criminal element.
TN: If a cargo theft occurs, what should the victim do to improve the risk of recovering their load?
Mandau: Our mantra has always been ‘immediate and direct’ reporting, to get people activated and doing all they can to identify where this could be going. Getting police forces involved.
A trucking company should notify police as the first wave of information and we supply more in-depth information to the police forces to equip them with the information they need to do a concerted investigation.
But there are some other underlying issues. There are far better solutions to reducing the amount of crime and theft the trucking industry faces and that is taking basic safety precautions to protect their loads.
I think we would all be appalled if we went up to a local Walmart and found the doors were open or closed with a twist tie with all the product that’s in that large facility unprotected with no security alarms, no guards and no lighting. Yet, day in and day out, we have hundreds if not thousands of trailers sitting unprotected in low-security yards or on the side of the road with nothing but a seal on them, which is basically an invitation that there’s something of value in that truck. And people just walk up to it and take what they want from that truck – and that is ridiculous.
It’s really ridiculous in this day and age, knowing full well there are people who are actively organized looking for opportunities (to steal a load).
Even opportunistic crime can take place with very little deterrent and that is the number one form of cargo theft we are experiencing all across the region – readily-available product with no security attached to it. That is the root cause of the crime that I’m seeing.
Larger trucking firms are more sophisticated. They don’t escape crime either, but those are typically the highly-organized criminals. We all admit, if a crime ring wants property, they will get it through force. They’ll hijack loads or put the driver in peril and take what they want.
However, we can really reduce the overall crime impact and let police concentrate on those types of losses by eliminating this noise in the background where these people are not true victims, they’re allowing it to happen by knowingly leaving high-value product unprotected.
TN: How much of this criminal activity is perpetrated by insiders?
Mandau: There has to be a good number of them, but it’s very difficult to prove. We have determined through our investigations that there is definitely an element, but that can come from so many different sources. It’s not necessarily a driver giving up a load for $1,000 or $5,000, walking away from the load for a few hours and coming back and finding it stolen.
It can be somebody inside the trucking company, a dispatcher or what have you. And then you have the whole issue of load boards and other Web-based sources of loads, where people can steal identities so easily. People need to use common sense.
TN: Are these load boards crawling with thieves or can they be safely used with some due diligence?
Mandau: I think they’re safe with some proper due diligence, but people don’t take the time. You have to make sure you qualify the information and qualify the individual you are dealing with.
In the technological age, we have gone away from face-to-face transactions and shaking hands and qualifying people to make sure they are who they say they are. Right now, it’s e-mail back and forth and faxes back and forth and it’s so easy for a criminal to hide behind some false information or acquire information on the Web and create their own Web page so that it looks very similar to the trucking company they are trying to portray.
When brokering a load, there’s an obligation to qualify who you are dealing with. There should be a relationship and there are best practices to follow. It’s pretty easy to do but people are pressed for time so they take shortcuts.
TN: What can drivers do to reduce the risk of a cargo theft happening en-route if they’re transporting a high-value load?
Mandau: If it’s a high-value load, it begins with: do you have two drivers? Are you stopping at appropriate locations with secure facilities or driving direct? We know for a fact that organized criminals will tail vehicles, stake out premises and watch them for weeks or months looking for that opportunity to catch a load that’s not protected.
Drivers should be aware of their surroundings, not take chances. Don’t go in for a shower and leave a load unattended in the parking lot with no other driver there.
TN: We always think of loads of electronics, alcohol and tobacco as being the most vulnerable, but you also hear of loads of diapers, chicken and other items being stolen. Is any load safe?
Mandau: The thieves are highly organized. Organize
d criminals have markets for their loads before it’s stolen. They’re not opening doors, taking something and then trying to figure out what to do with it. It’s sold before it’s stolen and they plan for this well in advance.
Other products where you’re dealing with opportunistic crime, they could go the flea market route or they could be going to a plant somewhere and waiting for workers to go off shift and then calling them over and saying ‘Look what I’ve got, are you interested?’ It’s very lucrative.
Organized criminals are looking for a higher payback. They’re not looking for low-value loads because it’s not worth their while. As legitimate businesses are looking for operational efficiencies, organized criminals are looking for operational efficiencies as well.
TN: It seems odd there is no really effective central database where information on cargo theft incidences can be shared.
Mandau: Quite honestly, I’m surprised this hasn’t been mandated by the regulators. We’ve been attempting to do this now for, well for me personally since I joined Markel 14 years ago.
We really need to get a shared database. We were very happy when IBC opened up a cargo reporting database but it’s not where we want it to be yet. We want it to be North America-wide. Product does not stay in our backyard, it travels. It crosses borders internationally and overseas and we really need that intelligence. Hopefully with this crime study, government will realize this is not a victimless crime. These dollars are spent on various activities – it could be terrorist activities. These large dollars are put to use for all kinds of undesirable activities we as a society don’t want to support.
It even goes down to the municipal level. Mississauga grandfathered allowing truckers to park their rigs on the sides of industrial roads, because they don’t have the opportunity to take them to a secure yard or the facilities aren’t readily available. That practice has to stop. There’s no need to grandfather things. If there’s a practice that is inherently improper and adding to the problem, we have to stop it, not grandfather it.
TN: What else needs to be done to control this epidemic of cargo theft?
Mandau: We have to educate customers and ensure all losses are reported. That $5 billion figure, people are reading into all the unreported thefts. Some people have estimated up to 90% of theft is not reported. I find that astonishing and can’t believe for a minute that that’s the case, but the naysayers say it is because they don’t see police action.
The police don’t have the resources so we have to put the focus on the fact these funds are being used for more sinister purposes, which is leading to a lot of other crime.
Right now in Ontario, we don’t have a system in place for the MTO to share information with the police on the insurance of each vehicle in the province. The police officer pulls over a vehicle and can call the insurance company to see if the policy is in force, but that should already be there in the cruiser so they have the information readily available to them.
We’re really backwards when it comes to a lot of systems and there seems to be a reluctance to share information and we’re perplexed by that.
TN: The trucking industry is comprised mostly of small carriers with limited resources. If they can’t afford yard security, satellite tracking and other deterrents, what can they do to reduce their risk of being victimized by cargo theft?
Mandau: I think they have to exercise extreme caution. Trucking is a profession, it’s not something you go out and do because you have a few bucks so you buy a truck and go on Loadlink and start hauling things. You have to act with extreme caution and have some best practices and take measures to qualify who you’re dealing with.
If you’re running such tight margins that you can’t exercise proper precautions, you shouldn’t be in the business – that’s the reality. You have to have a certain level of professionalism.
The other option is, don’t go long-haul, don’t go into the US and don’t haul commodities that could be a target. Maybe start with short-haul, door-to-door with no stops in between so you’re not doing any overnight warehousing on the street somewhere until you gain experience and have the funding to put in place proper security.
You don’t have to have a massive satellite tracking system in place, just the ability to plan out a route, stop in secure yards and that will really reduce the risk.
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