May 27, 2014 | Industry Insights
Value of Cargo Thefts Spikes 38.5% in Q1
Value of Cargo Thefts Spikes 38.5% in Q1
The first quarter of 2014 concluded with a decrease in the number of reported cargo theft incidents but a massive spike in the average loss value per incident, according to FreightWatch International’s Supply Chain Intelligence Center’s Q1-2014 Cargo Theft report.
A total of 206 full-truckload thefts occurred in the U.S., with an average loss per incident of $207,982. That’s a 38.5% increase in loss value from the same period a year earlier, and FreightWatch believes it’s an indicator that organized cargo criminals are growing in sophistication. Additionally, the firm notes that updated numbers it expects to receive from reporting systems will likely raise the loss numbers to even higher levels.
FreightWatch accompanies the numbers with a Cargo Theft Heat Map for the first quarter that highlights regions at highest risk for incidents. The data give a stunning reminder to logistics and supply chain professionals and logistics service providers that motor truck cargo is vulnerable at multiple stages in transport.
Food and drinks was again the cargo most often stolen this past quarter, comprising 21% of all cargo theft incidents. Home and garden products, at 15% of incidents, moved into second place above electronics (13%), which typically holds that spot. There were 27 metal cargo theft incidents, placing it at 13% alongside electronics. The remaining categories of products and their share of incidents are as follows: clothing/shoes, 10%; building/industrial, 9%; auto parts, 7%; alcohol/tobacco, 4%; miscellaneous, 4%; pharmaceuticals, 2%; and personal care, 2%.
By value, however, clothing/shoes dwarfed all other categories. While the average loss across all categories was $207,982, clothing/shoe theft losses totaled $943,699 in the first quarter, due to loss of several name-brand footwear thefts. Electronics was the nearest in loss value at $421,008. Alcohol/tobacco ($204,065) was third, with the other categories of products following at various levels from $185,154 (miscellaneous) in loss value downward.
California and Florida led the states in incidents, with 27% and 20% of all thefts, respectively. Georgia (11.2%), Texas (10.7%), and Illinois (7.3%) rounded out the top five states, comprising 76% of nationwide cargo theft events.
Unsecured parking, primarily at truck stops, was the primary location targeted by thieves (when a location was recorded), with 122 thefts in the first quarter. Warehouse/DC (12 thefts) and secured parking (11) didn’t come close in terms of vulnerability.
Freight heading to ports is typically at higher risk of theft than freight headed inland from ports. Organized cargo theft gangs rely on information gleaned about contents of shipping containers headed for export and target loads they can quickly sell, FreightWatch says. Theft of entire containers from ports has been the preferred method since 2011, and Los Angeles and Long Beach are the only two ports of the five largest reviewed by FreightWatch to have experienced higher rates of cargo crime from 2012 to 2013, with a combined increase of 18%, which was driven by a 60% surge in food/drink theft and 41% rise in electronics.
Despite efforts at security and tracking, loss values are rising. That increases motor truck cargo legal liability and freight forwarder legal liability concerns. Carriers’ cargo insurance rates typically reflect the risk of loss recorded in the areas you will travel and destinations of your load, so at Roanoke Trade we keep a watchful eye on trends in your region. Our insurer partners provide a full spectrum of insurance products to protect your company from financial catastrophe from cargo theft, and we work hard to find you the best rates for the best coverage.
We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE.
Sources: FreightWatch, Business Insurance