Few people give it much thought, but the cost of cargo loss combined with that of cargo theft annually adds up to more than $50 Billion in lost resources in America. According to the National Cargo Security Council, these losses occur as a result of containers and trailers being mislabeled, damaged, or somehow failing to arrive at scheduled destinations.

On top of these human-error losses, there are instances of theft as well, most often attributed to criminals stealing goods right from the ports or warehouses, and seagoing pirates attacking crews to steal valuable cargo. Although the issue of cargo theft and cargo loss has long been kept out of the public eye, and has long been inaccurately assessed, it is now receiving much more attention. A report compiled by risk management company Marsh focused considerable attention on the scope of the problem, and how it’s having a major impact on the shipping industry.

Statistics on cargo loss

It must be said that the vast majority of shipments do in fact, reach their destinations without any mishaps, but the huge volume of worldwide shipments is so large that even a small percentage of cargo theft and cargo loss allows it to reach the $50 billion mark. It is estimated by the World Shipping Council (WSC) that in the year 2016, 130 million containers loaded with cargo were shipped internationally, and that of these, approximately 10,000 were somehow lost or stolen.

In seagoing operations alone, the WSC was able to determine from its member companies that during the eight-year period from 2008 to 2016, nearly 1,600 containers were lost at sea for various reasons. Of course, some of these losses are directly attributable to catastrophic weather conditions, as was the case in 2015 when the El Faro was sunk with all of its 391 containers and 294 trailers, as it struggled against Hurricane Joaquin. The lost containers from El Faro accounted for nearly half the total number of containers lost at sea during 2015.

Cargo theft on trucking shipments

Cargo theft on trucking shipments in the United States has also increased dramatically over the past two decades, as the value of cargo has gone up. The FBI has estimated that nationwide cargo thefts amount to somewhere between $15 Billion and $30 Billion every year, and those figures are expected to rise in the coming year.

Estimates of the value of stolen cargo in the past have been significantly understated because there has been no uniform system of reporting cargo thefts across all states in the country. In 2010, a federal act was finally put in place to recognize this fact and make it mandatory to report cargo theft in the same way everywhere.

Known as the Uniform Criminal Reporting definition of cargo theft, it standardized the way thefts are defined and reported, so more accurate numbers can be compiled on the breadth of the problem. While some inconsistency in this area continues to linger, the overall reporting among states on cargo theft has improved considerably.

Cargo valuation

Another problem with assigning a proper value to cargo theft is the way cargo value is actually calculated. When cargo is stolen, a number of different people are affected, for instance, the merchandiser, an insurance company, the defendants in the case, and even the legal system, all of whom consider cargo valuation from different perspectives.

Some consider it to be the cost of manufacturing the load, some estimate that it’s the value of the load’s raw materials, some consider it the insurable value, and still, others consider the true value to be the retail value of the load. Whole trailers have been hijacked while in transit, for instance as a driver takes a bathroom break, and quick-change artists unhitch the rig from its original tractor and re-hitch it to their own truck.

Preventing cargo theft

By examining the statistics on cargo theft in this country, it is possible to devise strategies which can minimize the impact and the incidence of future cargo theft. For example, it is known that the most popular kinds of cargo to thieves are food and drink loads, which annually account for approximately 20% of all cargo thefts. Pharmaceuticals and consumer electronics are also very popular, although they don’t approach the numbers for food and drink thefts.

Industrial materials and building materials are gaining in popularity, and may at some point rival consumer electronics, pharmaceuticals, and food and drink loads. It is also known that the highest incidence of cargo theft occurs in the states of Texas, California, and Florida and that the biggest concentration of thefts occurs in warehouses, simply because they typically house a high volume of product in one area.

Nearly half of all burglaries occur between Friday and Sunday when there are fewer employees on the premises to watch over freight. In fact, almost 90% of all warehouse cargo thefts in the US occur at locations which are either unsecured or completely unattended. For loads which are in transit, more than 60% of all cargo thefts occur at truck stops or overnight rest stops.

Improving security

Since drivers are considered the first line of defense against cargo theft, it is imperative that drivers be educated about potential threats, and about the most likely circumstances for theft to occur. Tracking inventory closely is a good policy for minimizing cargo theft since any discrepancies can be quickly discovered and reacted to.

Regular warehouse inspections should be scheduled, and if any irregularities or vulnerabilities turn up during these inspections, they need to be handled appropriately. Any warehouse which is unsecured or unattended needs to have some security measures put in place to discourage cargo theft.

Since today’s cargo thieves and burglars are much more sophisticated than those of years past, it is necessary to take countermeasures to prevent cargo theft. It is known that cargo thieves monitor routes and survey freights which they consider being desirable targets, so one good tactic would be to change shipping routes to throw off criminals tracking specific cargo shipments. Driver education to prevent talking about their loads at rest stops and in transit can also help curb criminal activity.

Lastly, it’s a great idea to have shippers, carriers, 3PL’s, and law enforcement authorities in regular contact, so that any incidents can be reported quickly, and hijacked shipments can be quickly recovered. It must be stated that even the best preventive measures will not completely thwart the criminal minded in their quest to steal valuable cargo, but by implementing these measures described above, and perhaps others as well, the incidence of cargo theft can be considerably reduced from present levels.