July 4th holiday puts supply chain on high alert for freight theft

Transportation, logistics, and supply chain professionals should be on high alert this coming weekend as extended business closures signal a green light to cargo thieves, experts caution.

The warning comes in the wake of a recent CargoNet study revealing a record high level of theft last July 4th weekend, when activity rose 123% compared to 2019 to reach its highest level in four years. With extra time to get away with their crimes, thieves will target both in-transit freight and warehouse inventory again this year, with computer electronics as the most at-risk items.

“In previous years, household goods and food and beverage items were the most commonly targeted commodities. This would include items like appliances, toys, alcoholic beverages, and seafood,” according to CargoNet analysts. “The Covid-19 pandemic has caused shortages and price inflation of specific goods, and we think the items most affected—like computer electronics—are the items most at-risk this holiday.”

CargoNet reviewed theft data between July 1 and July 7 for the previous five years for its June 23 report. There were a total of 127 theft events reported in the analysis period, or an average of 25 per year. The average stolen shipment was worth $145,699 per event, and 42% of theft events occurred on a Friday or Saturday, according to the report. California, Texas, Florida, and Illinois recorded the most thefts over the five-year analysis period, and the analysts said those states remain the most at-risk this year. They also pointed to an increase in full truckload cargo theft across the South and Midwest.

Scott Cornell, transportation lead and crime and theft specialist at Travelers Insurance, attributed much of the 2020 cargo theft increase to the pandemic and its effects on the U.S. economy.

“We know that when we see anything impact the economy as a whole, we’ll see some significant shifts,” he said, pointing to a more than 60% increase in cargo theft during the second quarter of 2020, at the peak of the pandemic.

Coming into 2021, Cornell said the overall number of thefts was decreasing, but he also pointed to a shift in targeted items, echoing CargoNet’s data on computer electronics.

“We’ve seen significant trends toward computers, laptops,” he said, pointing to CargoNet’s data showing thieves targeting full truckloads of computer electronics from warehouses in California. CargoNet has recorded over 50 thefts of electronics shipments in the state since this past September, and thefts have increased 89% when compared to the previous year. On average, each full truckload theft event was worth $595,928 and each partial truckload $197,157, according to CargoNet.

Supply chain professionals can implement risk mitigation strategies to avoid the increased dangers this holiday weekend and for the longer term. Those include arranging for same-day delivery of short-haul shipments, embedding covert tracking devices, and using high-security locks to prevent trailer burglaries, according to CargoNet.

Cornell agreed and added that Travelers recommends a “layered” approach to security when it comes to combating cargo theft.

“A layered approach means [having] good processes and procedures first,” he said, adding that it should be “the foundation for everything you do.”

That foundation includes:

• Educating employees and training all staff on what cargo theft is, what the current trends are, and raising general awareness of the problem;
• Using a “red zone” rule, in which the driver doesn’t stop within the first 250 miles or so of pick up, which Cornell says can help cut down on thefts;
• Using high-quality locking devices and avoiding loading trucks too early;
• Making sure loads are stored in secure lots;
• Implementing technology solutions, including covert tracking devices, which can be used in trailers and inside cargo;
• Having a formal response plan in place in the event of a theft.

Although the long weekend will allow thieves more time to steal cargo and more time to get away with their crimes, Cornell says he expects the large increase in thefts recorded last year to slow in 2021.
“I think we’ll see some pullback; [we’ll] see the numbers level out,” he said, adding that second-quarter data on cargo theft will offer a good indication of where the trends are heading, especially as the economy reopens from the pandemic. “The more open we get, the more we’ll see things go back closer to pre-2020 [levels].”