It’s often regarded as an invisible crime: Cargo theft costs the U.S. billions of dollars a year, yet no one knows the extent of the problem. Logistics providers are often reluctant to report thefts, and law enforcement agencies have few hard statistics.

Tighter security since 9/11 is having a positive impact, however, and new laws promise to shed light on the problem. Meanwhile, there are several steps your business can take to ensure you aren’t a victim.

A Billion-Dollar Issue

The annual cost of cargo theft in the U.S. runs as high as $30 billion, according to FBI estimates, although most logistics experts believe the actual figure could be much higher due to under-reporting of thefts and the fact that cargo theft has never had its own classification in federal crime data.

That’s changing. The reauthorization of the Patriot Act signed into law in March requires the addition of cargo theft to the FBI’s Uniform Crime Reporting system by year’s end. More accurate statistics will help agencies see the extent of the problem and allocate their resources accordingly. The law also increases penalties for cargo theft.

Over the past five years, industry participation in such security initiatives as the Customs-Trade Partnership Against Terrorism (C-TPAT) is generally thought to have had a positive effect on theft and pilferage at crucial points in the pipeline. Best practices like container seals, increased facility lighting and fencing, and more security personnel have contributed to tighter security at port facilities and distribution centers, for example. But what about containers that have moved outside these secure areas?

Protect Yourself

It’s generally believed that motor carriers experience the vast majority of cargo theft. The California Highway Patrol reports that incidents range from armed hijackings at the side of the road to burglaries at common stops en route. In many cases, company employees or the truck drivers themselves are conspirators in the thefts.How can you protect your company and supply chains? Consider these suggestions:

  • Follow the standards. Enroll in C-TPAT and apply industry best practices for security. Expect the same from your vendors.
  • Tighten security at home. Limit access to loading and unloading facilities, and beef up security with technology and personnel.
  • Secure all shipments. Use industry-standard locks or seals on all container shipments.
  • Consider the future. Electronic container seals and Radio Frequency Identification tags are the way of the future, though currently they are too expensive and not yet standardized. Get ready for them.
  • Know your employees. Conduct thorough background screening of employees. Limit the number of employees who have access to shipping information.
  • Hold drivers accountable. Prepare a list of rules for drivers that will help them avoid unsecured areas and anticipate possible incidents.
This article appeared in October 2006. (CM)

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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