Weak Supply Chains Hunting Ground for Theft of High-Valued Products

Earlier this year reports of international rings targeting California’s booming agriculture industry and increasingly stealing truckloads of high-value nuts made front-page news. In fact, in 2015 California nut shipment thefts totaled losses of $4.6 million with 31 cases reported. Indeed food and beverages have replaced electronics as the most-stolen goods in the U.S., with losses in this category totaling $3.81 million in the second quarter of 2016, according to CargoNet. Why is food, particularly nuts, such a hot commodity for criminals? Nuts are expensive, they have a long shelf life, and they don’t have serial numbers necessary to track or trace the goods.

Moreover, thieves are capitalizing on weaknesses in supply chains to carry out their crimes. Vulnerability comes from a variety of factors, including the speed in which today’s supply chains operate and the difficulty to reconcile security measures. In addition, supply chains are often so long and fragmented making it hard for everyone involved in the process to ensure that security is viewed with the same level of urgency. When it comes to California’s nut shipment thefts, thieves use high-tech tactics, hacking into trucking companies to steal their identities. Armed with false shipping papers, they pose as legitimate truckers, driving off with loads of nuts such as almonds, walnuts or pistachios valued at $150,000, and some worth $500,000 each. Days later, when a shipment fails to arrive to its intended destination, the nuts may already be in another state or on a ship destined for Europe or Asia, where they fetch top dollar on the black market, according to authorities.

In addition, according to an article in the Los Angeles Times, scammers have used  “ghost trucks” that duplicate legitimate ones but are untraceable on trucking databases. Thieves have also tested security measures by sending scout trucks that abruptly leave processing plants without picking up loads.

Nuts are not the only things cargo thieves are after. Theft within the pharmaceutical industry is a growing problem, as well. What’s more, the value of these products and the potential harm that may result from a theft makes this industry sector particularly sensitive to the issue. Pilferage is the modus operandi of most street-level players, but according to FreightWatch some pharmaceutical cargo theft incidents may be tied to organized crime syndicates. They “use this as a method of intelligence gathering, breaking into loads to verify the cargo and then pulling back to judge response time and determine what security measures may be in place on the load,” a 2015 FreightWatch report said after the number of cargo thefts in the drug industry increased a whopping 125% in the third quarter over the previous quarter and 350% over the same quarter in 2014.

Stepping up cargo theft prevention is critical for transportation firms and logistics service providers. This includes having well-trained drivers, choosing routes very carefully and switching up the routes taken, implementing anti-theft measures, keeping cargo moving (the longer a loaded trailer or container sits unattended, the higher the risk for theft), and having regular contact with the dispatcher, among other measures. Having a comprehensive cargo insurance program in place is also vital to the continued success for global logistics risks. Roanoke Trade specializes in providing cargo insurance to protect against theft and the resulting consequences. For more information about our transportation insurance products, please contact one of our professionals at 1-800-ROANOKE (800-762-6653).