the lading vanishes

It had never experienced cargo theft, so the California distributor was shocked when two loaded containers vanished in broad daylight while parked in its yard. But to the outside team that was called in to investigate, things looked suspicious from the start. To begin with, the thieves knew which two trailers were fully loaded, even though 95 percent of the trailers stored in the yard were empty on the day in question. For another, the trailers stolen were only vulnerable for 90 minutes—they had been placed in the yard at approximately 2: 00 p.m. and were scheduled to be picked up between 3: 15 and 3: 30 p.m. Skeptical that outsiders with two available tractors had randomly stumbled across the two loaded containers within that small window of opportunity, the investigators were eventually able to persuade the company that it was the victim of an inside job. Subsequent investigations showed the theft had indeed been orchestrated by one of the company's own supervisors.

The distributor probably shouldn't have been surprised. Cargo theft—whether it's an inside job or a heist engineered by outsiders—has become one of the new growth industries. Industry experts now put the cost of cargo theft at $10 billion to $20 billion annually in the United States, up from an estimated $1 billion in the late '70s. As more trucks travel the nation's highways, criminals have discovered there's a fortune to be made by stealing what are essentially "warehouses on wheels." Lax security at many warehousing and transportation outfits means there's a low probability of being caught, and criminal penalties for cargo crime are extremely light. Small wonder so many criminals have realized it's far less risky to get caught with a truckload of stolen goods than a shipment of cocaine or heroin.

As the crooks become more organized and entrepreneurial, it's not unusual for product to be negotiated and sold before it's ever stolen. We've even seen cases in which shady dealers provide detailed shopping lists of what they want their operatives to steal. One day the list might include electronics, cosmetics, computers, fragrances and home entertainment equipment. On another, it might be cigarettes, jewelry, pharmaceuticals and food.

Though cargo theft was once the exclusive domain of established organized crime families, dozens of new cargo theft rings have sprung up across the United States in the past decade. Some steal unmanned trucks. Others go in for armed hijacking. Yet others devise sophisticated deception schemes. A trucker with bogus identification and paperwork recently showed up at a distribution center and picked up a container loaded with $80,000 worth of product. Neither the gate guard nor the dispatch office had any indication that they had been scammed until the real trucker showed up for the container later that day.

Of course, outsiders are not always to blame. Disappearances of trucks parked at storage facilities or diners (or even as the result of armed hijackings) are not always the outside jobs they appear to be. As the California distributor learned, many times these thefts are either set up or personally committed by employees (typically drivers working in collusion with shipping or receiving staff) or even by vendors or contractors.

Seven ways to play it safe
Whether they ship high-value goods or modestly priced commodities, companies understandably feel besieged from both without and within. I'm frequently asked to recommend steps they can take to protect their cargo.What follows is a list of some of the more effective safeguards:

• Don't react passively to a loss! Once you've discovered a theft, have it thoroughly investigated rather than simply filing a police report or insurance claim. The knowledge that many victimized companies do not aggressively investigate has made cargo thieves increasingly brazen.
• If you do business in states with high rates of cargo theft (such as New York, California and Florida), install global positioning system (GPS) technology in your vehicles. Newer versions of GPS will allow you to track your trucks to within 100 feet, provide two-way communication if a driver suspects he's being stalked, let drivers activate concealed duress buttons in armed hijackings, and provide geo-fencing notification if a vehicle detours off the assigned route.
• Number the tops of trailers so that law enforcement can identify stolen containers via aerial surveillance.
• Set up a toll-free tip-line program throughout your company.We've received dozens of calls on our anonymous hotline number that were instrumental not only in preventing theft, but also in apprehending the miscreants after cargo vanished.
• Always stage high-value loaded containers in secured storage facilities.You can enhance security by installing digital camera systems that record activity 24 hours a day. Sophisticated video technology can also be interfaced with intrusion detection systems, allowing you to view the site from thousands of miles away.
• If you direct ship from one facility to another, always use pre-numbered security seals to protect against the trucker's stealing product while in transit. However, it's important to remember that unless you consistently follow strict seal procedures, security seals can be circumvented by devious workers.
• If you work with an outside trucking firm, establish minimum security standards. You want to be sure that they're doing enough proactively and that they will do the right thing if a theft occurs. Many companies assume that once they turn the goods over to an outside carrier, they no longer have to be concerned about cargo theft. That could be a costly assumption: As many shippers have learned to their sorrow, a carrier's certificate of insurance is no guarantee that their cargo is protected from theft. All too often, these policies contain exclusions that cover them for every contingency except the one that actually occurs.