How fleets, trucking industry can prevent cargo theft

Matt Cole:
What can trucking companies and the logistics industry as a whole do to mitigate cargo theft risk?

Jason Cannon:
Hey everybody. Welcome back. I'm Jason Cannon and my cohost is Matt Cole. Last week on the 10-44, we talked through the first half of the American Transportation Research Institute's in-depth research report on cargo theft. Be sure to check that out if you missed it. This week we're talking about the rest of the report, which focuses on prevention methods.

Matt Cole:
There are definitely some tried and true cargo theft prevention strategies that have been around for years that trucking companies and logistics providers should continue to adhere to. As part of re's report, motor carriers offered some more insight into what works for them in their operations.

Jeff Short:
What we did on the prevention strategies, of course is ask. We gave the option to write in anything the motor carriers had lots and lots of information that they found was pretty good. So on the driver's side, one of the most basic things don't leave keys in the truck. It's something we may all want to do when we park our own cars. Leave the keys in the car. Situational awareness, reasonable suspicion. You need to train your drivers to be always on the lookout for security issues. And another thing that was brought up is if you're leaving a shipper, let's say with a high value product in particular, drive 200 miles or so before stopping. It is a common technique that thieves will follow a truck from a location because they know what will be on board and then at the first place it parks, maybe they break into the trailer. So if you drive 200 miles, they're certainly less likely to be following you for that distance.

Jason Cannon:
Beyond the things that drivers can and should be doing, ATRI also heard from carriers about company processes and policies that can be implemented in the back office.

Jeff Short:
Definitely conduct routine security audits, conduct compliance reviews, make sure you have some security practices in place. They're being followed. Regular password changes for information systems, that's very important because thieves can figure out your password, break into your email account and pretend to be your carrier when they're operating with other carriers, communicating with brokers, that sort of thing. They can literally hijack your identity to go ahead and move freight fictitiously ultimately stealing it. Definitely vet the folks you work for. Don't be offended if someone is vetting you. It's what needs to be done. Make sure your customers are who they say they are. Make sure the brokers are who they say they are. Definitely, and most folks do this of course, but look into driver backgrounds, especially during the hiring process. Bills of lading. There was an instance we described in the report where a bill of bleeding was changed and the driver saw it was written on the BOL and instead of driving to Minnesota for instance, they drove to California without about it.

What that driver should have done probably hauled out to the folks involved in this transaction and said, this doesn't look right. Something strange here. Maybe someone is up to no good here. Compare your bill of lading against rate confirmations. There are changes to the bill of lading. Require an updated bill of lading from the shipper, always restrict access to insurance information. Monitor your motor carrier number activity. Some folks may choose to avoid high value or theft prone freight. That was one of the suggestions. That's something some carriers do. Certainly it could impact your business to do that, and it's not always the right choice for everyone.

Matt Cole:
Finally, carriers provided feedback on things that work related to equipment and infrastructure such as terminals and warehouses to prevent cargo theft.

Jeff Short:
Certainly physical deterrence to the trailer, padlocks, disc detainer, locks were mentioned. Pin locks. You can get customized trailer doors and seal covers, manual air brake knob locks, perimeter fencing and barriers around where you keep your trailers and that kind of moves into facility. Surveillance monitoring, definitely have motion sensitive video monitoring. CCTV gate alert systems. You should update gate codes regularly. You may have an ex-employee from three years ago who, and if the gate code still works, that could make you vulnerable. Perimeter patrols conducted by onsite guards regularly. Make sure there are no holes in fences, that sort of thing. And then on the truck tracking side, pretty standard stuff. GPS tracking geofencing in case the truck goes outside of a geofence. Just real-time monitoring systems in general and redundant systems. Let's say in Inca and trailer mounted cameras and GPS as a four instance in case one system is defeated, the other one will still work.

Jason Cannon:
While trucking companies don't experience strategic theft as often as logistic service providers, the tips from LSPs for preventing theft through double brokering and through similar methods also hold true for carriers.

Jeff Short:
These apply to motor carriers also, but some of the strategies mentioned by LSPs, the big ones were first and foremost vetting carriers they work with do an initial vetting. There's online software, online services to look into the backgrounds of the folks you're working with and then continue to monitor the carriers you work with and flag carriers that have been a problem in the past for certain LSPs suggested flagging folks who have been the victim of fraud. I'm not sure how I feel about that because that leads to folks kind of keeping this issue secret instead of dealing with it head. On the communication side, this stuff's really important for LSPs. You got to validate contact information, phone numbers, email addresses. Folks may use the number one instead of an I in a domain name and that can trick folks quickly looking through emails and that sort of thing. And you may not be dealing with the carrier that you're actually dealing with. Communicate with all parties involved in a transaction. That means carrier shippers, receivers, et cetera. And don't be afraid to ask questions with something suspicious. If you see something that's suspicious, hopefully, if you're verifying the information, folks on the other side shouldn't be upset with that because it's good to do this due diligence for the entire supply chain and make sure that a criminal element hasn't crept in here, especially if something looks really strange

Matt Cole:
Beyond what can be done at the individual company level. Attri also gathered feedback about ways the trucking industry as a whole can approach the cargo theft problem with an eye toward prevention.

Jeff Short:
So the first next step that emerged out of the research and a lot of folks were talking about this, is that there needs to be a security culture across the entire supply chain. When you look at the idea of safety culture that has always been big across the past couple of decades, creating a safety culture where you put up enough as many barriers as possible to prevent an accident, this would be the same thing, but putting up barriers to prevent cargo theft and that security culture needs to go across the entire supply chain. Obviously, everyone is working with a bunch of different companies and if they're all secure, that certainly strengthens the supply chain. So what does security culture mean? It would be a leadership driven, supportive security investment in security. Obviously, it's going to involve driver training and staff training. You got to involve all employees in cargoes theft awareness across the company.

Not everyone is focused on security, but sales folks, it's very important that they understand how important security is. Everyone within the company needs to understand, give people clear expectations and accountability, and then ultimately provide support for drivers and employees to show vigilance tools for reporting suspicious activity, checking the veracity of information, making sure things are legit drivers. Other employees need to have a way to do that if they see something suspicious. Otherwise, they may just move on through that information and not report it, and that can lead to a theft. On the state side of things, what can be done at the state level? There are a lot of states out there that don't designate cargo theft as a distinct crime. We put some model legislation into the report showing what some states have done to designate cargo theft as a distinct crime instead of being, not that it wouldn't be a crime, a lot of states just treat it like a regular old theft, but this is specific for cargo theft with graduated sentencing for cargo theft based on the value of the theft.

Some states put it all the way up into the millions with higher sentences for theft on that level. Then finally, we've seen state task forces and advisory boards being developed. We put some examples in the report of that finally, at the federal level, and folks said this time and time again, they would like to see a federal level centralized reporting agency, a government agency that collects all of this information anonymously. It would include data collection, management analysis, cross jurisdictional cargo theft, information sharing among all the way down to the smallest police departments, up through state police efforts and even at the federal level. And then finally, a dissemination of intelligence to all supply chain stakeholders, all trucking companies, LSPs shippers, receivers, et cetera.

Jason Cannon:
With theft reporting in mind, it's worth noting that some cargo theft incidents go completely unreported to law enforcement.

Jeff Short:
There are companies out there who have reported 0% of their incidents to law enforcement. The main reason they're not doing this is if the financial impact of the theft is low, let's say a very low value and not resellable item is stolen. It could be on accident that the criminal actually did this and stole something that has no value. They may not report that because it's not worth their time. And then a lot of folks feel frustrated that there are low recovery rates. Most of these goods are never seen again. For motor carriers in particular, more than 70% of goods stolen are never ever seen again. Because of that, there's a reluctance to invest the time into an investigation and reporting it on the carrier side because they know in all likelihood it's not going to solve. This particular incident is not going to be solved because let's say local law enforcement doesn't have the resources, the goods have moved out of state, and there's not a whole lot that can be done under the current system.

Matt Cole:
Reporting cargo theft to insurance is less common with just more than half of motor carriers indicating they report all cargo thefts to their insurer.

Jeff Short:
We did see a much lower level of reporting among carriers and LSPs to insurance companies. Lots of folks have cargo theft insurance. They ensure value of the cargo if it's completely lost, but we did see about 31% of carriers don't report any of their thefts to insurance, and 27% of LSPs the same thing. Report nothing to insurance, and the big issues are the cost of insurance. If something's below deductible, low value, they're not going to report it, and sometimes if it's above the deductible, they might not. The biggest fear is insurance premium consequences. Additionally, they feel that this could be an administrative hassle and it might just cost time than it's worth. So those are three of the reasons they might not report incidents to insurance.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.