Cargo Theft on The Rise: What to Look out For & How to Proactively Manage

Cargo Theft
The importance of maintaining control over freight costs continues to increase as cargo theft appears to be on the rise again in 2020. However, TruckingInfo reported in 2018 that the incidence of cargo theft declined by 14%. The slight contractions in the prevalence of theft of cargo in 2018 are not a free pass to let the issue go unaddressed. As the world comes to terms with the state of the economy, the risk of cargo theft will inevitably increase. To avoid a rise in cargo theft incidence, shippers and logistics service providers (LSPs) need to understand a few things about the true costs and severity of cargo theft in today’s world, the indicators of unexplained losses, and the steps to reduce it.

The Severity of Cargo Theft in the Modern Supply Chain

The theft of cargo, even if only happening at relatively low levels, still represents a grave threat to supply chains. Depending on the company, a shipment may cost well into the millions of dollars. In the pharmaceutical industry, high-cost medications could cost into the billions. While high-value cargo draws the risk of theft, low-cost cargo—consumable goods—is the second most stolen form of freight. As reported by Devin Nye of Supply Chain Brain:

“The FBI report provides two very important points from which to draw insights: the total value of stolen cargo, and the amount recovered. For example, the second most valuable item stolen is consumable goods, with a 7.3% recovery rate. Other categories such as clothing, vehicle parts, household goods, and building materials don’t lag far behind in value, but none comes close to being recovered as often. Often thieves will steal entire trucks and trailers, resulting in losses of the highest-value items, which are recovered about 60% of the time.”

Recognizing the Indicators of Theft Enables Proactive Intervention

The indicators of theft are obvious. They include:
  • An unexplained loss of freight.
  • An increase in the frequency of freight loss.
  • Higher freight costs when working with a given supplier or carrier without a rationale for sudden changes.
  • Kickbacks from drivers or partners that seem unjustified.
  • Trouble reconciling invoices against sold products.
With that in mind, the indicators of cargo theft may be difficult to track. After all, $10 might not seem like a big loss. That is until it’s applied to $10 per pallet for 10,000 total shipments over one year, and financial losses. In this example, the loss rises to $1 million over time. Imagine the losses if that same example were spread over 10 years and each loss was only $1. The cost would still be the same over time.

Additional Measures to Prevent and Reduce Theft

Shippers and LSPs that take a proactive approach to manage the risk of cargo theft can keep it under control and isolate problems before they turn into losses. The best practices for reducing cargo theft lie in automation and letting accurate data prove what is and is not happening to your freight. Such practices include:
  1. Automate reporting of freight delivered.
  2. File all claims for loss or damage immediately.
  3. Eliminate paper-based filing processes.
  4. Use analytics to determine likely causes of and opportunities for theft.
  5. Hold carriers accountable for theft that occurred while in carriers’ liability.
  6. Consider purchasing insurance for high-value, in-demand goods before shipping.
  7. Use big data and telematics to track all movements and know what really happened.

Unify Your Efforts With a Comprehensive TMS

A final tip for reducing theft of cargo remains—using a comprehensive, connected, and real-time capable transportation management system (TMS) to track and manage your freight. Additionally, a comprehensive claims management tool can provide added efficiencies and automation in the event that a loss or theft does occur. Since the best solution for avoiding theft lies in increasing visibility into every movement—increasing the risk of catching a theft in progress—an advanced system that increases visibility will lower your risk.

Overcome the Issues and Prevalence of Cargo Theft By Requesting a Demo of the MercuryGate Platform Together with MercuryMyEZClaim to Reduce Theft and Achieve Greater Efficiencies in Freight Claims Pro

Pete Celestina

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