Organized retail crime is dangerous and costly for businesses, and the problem extends far beyond stores. A new report indicates that cargo theft remains a major problem.

Organized retail crime affects almost every single retailer, most of whom believe the level of organized retail crime activity has risen in recent years, according to new findings from the National Retail Federation (NRF).

Of 129 retail companies surveyed for the NRF’s latest annual Organized Retail Crime report, 94.5 percent said they have been the victim of organized retail crime over the past 12 months, up 6 percent from last year and the most in the survey’s seven-year history. Meanwhile, 84.8 percent of retailers believe organized retail crime activity has increased over the last three years.

The NRF also found that an increasing number of retailers believe thieves are becoming more brazen and that, on average, more than one in 10 organized retail crime apprehensions lead to some level of violence like physical assault or battery.

While organized retail crime has historically highlighted coordinated thefts in stores, this year’s findings indicate that such activity should not be an issue solely addressed at the store level, as half of retailers (49.6 percent) said they have been a victim of cargo theft in the past 12 months.

The NRF findings follow a FreightWatch International report released in January that found cargo theft in the United States rose by 4.1 percent in 2010, with 899 reported theft incidents. That is the highest number on record, according to the security-solutions provider.

Last year, theft occurred at an average of 75 incidents per month, and the supply chain industry suffered full truckload or container losses at a rate of 2.5 each day, according to FreightWatch. Of the total number of incidents reported, 81 percent involved full truckload or container thefts, 3.4 percent were warehouse burglaries and 1.3 percent involved some type of violence.

“After a significant spike in cargo theft activity in 2009, we expected theft rates to level out somewhat in 2010,” Ron Greene, the general manager of FreightWatch International, U.S.A., said in an announcement of a separate 2010 report. “What we are witnessing, however, is a more targeted approach by cargo thieves, seeking multi-trailer thefts and large-scale warehouse burglaries, including the largest loss on record.”

Of the 899 reported theft incidents last year, 28 were valued at more than $1 million each, including three that were valued at over $10 million.

“Cargo theft is a rewarding, profitable enterprise, and criminals are increasingly finding ways to infiltrate the supply chain,” NRF senior asset protection adviser Joe LaRocca said in a statement last week.

While theft most often occurs en route from the distribution center to the store (57.4 percent), other points of victimization along the supply chain occur between the manufacturer and the distribution center (39.7 percent), at the distribution center (22.1 percent) and as merchandise moves from one store to another (22.1 percent).

The top cities where organized retail crime rings are most problematic (in alphabetical order):

• Atlanta, Ga.;
• Chicago, Ill.;
• Dallas, Texas;
• Houston, Texas;
• Las Vegas, Nev.;
• Los Angeles, Calif.;
• Miami, Fla.;
• New York, N.Y./Northern N.J.;
• Philadelphia, Pa.; and
• Phoenix, Ariz.

Many of these metropolitan areas are home to a port where cargo is docked and transferred.

As the economy forces retail executives to pay close attention to every line item in their budgets, loss-prevention executives say senior leadership is more likely to understand how organized retail crime affects the company’s bottom line. More than half of NRF survey respondents (58.3 percent) believe their top management understands organized retail crime, up 16 percent from last year.

As a result, 46.5 percent of respondents said their company is allocating additional resources — including more personnel and greater investment in technology — to combat the problem.

Related

How the Supply Chain Fought Cargo Theft in 2010

Cargo Theft Rate Climbed in 2009

Resources

Organized Retail Crime Survey 2011
National Retail Federation, June 2011

Organized Criminals Becoming More Violent, Endangering Safety of Retail Associates…
National Retail Federation, June 8, 2011

FreightWatch Annual Report — U.S. Cargo Theft: 2010
FreightWatch International, Jan. 18, 2011

Cargo Theft Losses on the Rise in 2010
FreightWatch International, July 22, 2010