Cargo theft rates have consistently grown over the past five years, in some cases at an exponential rate. It’s no wonder that supply chain pros see this growing threat as a risk to their operations.

As global shipping grows more complex, so does cargo theft, which takes a significant portion of potential revenue out of the supply chain each year.

In FreightWatch’s 2011 Supply Chain Survey, based on responses from more than 200 senior managers responsible for supply chain security, findings revealed an overwhelming agreement (74 percent) that cargo theft has increased over the past five years, while 72 percent said they believe cargo theft will continue to rise over the next five years.

When asked about the key drivers for change in cargo theft over the past five years, the top three responses were: increased value of shipments; cargo theft is a low-risk, high-reward crime; and economic conditions.

Tellingly, 74 percent of all respondents believe that cargo theft had a major or moderate effect on their supply chain operations.

When looking at historical patterns of cargo theft, the majority of respondents indicated that theft in their particular industries had increased over the past five years, with 74 percent showing an increase, less than 6 percent showing a decrease and 19 percent stating that theft in their industry was static or unchanged.

Indeed, over the past five years, cargo theft rates have consistently grown, in some cases at an exponential rate.

In a separate report published in April, the logistics security solutions provider analyzed data for close to a five-year period (January 2006 through December 2010), during which overall cargo theft rates were found to have increased every year. Up 190 percent from the 310 incidents recorded in 2006, theft rates grew by double‐digit percentages annually until 2010.

With 899 theft incidents recorded last year, the rate of growth slowed to 4.1 percent.

“While still a record high, the single‐digit rate of growth demonstrates the emergent impact of efforts by supply chain professionals to make targeted loads — and, perhaps more significantly, high‐value loads — less available to criminals, as the average loss per incident decreased,” the report says.

The growth of cargo theft has begun to level off somewhat as shippers and their transportation providers harden the supply chain on high‐value cargo. As a result of heightened security efforts, the average loss value per stolen load decreased in 2010 by 17 percent over 2009.

Although thefts of pharmaceutical products soared by 283 percent from 2006 to 2008, the growth rate has been almost flat since 2008, likely due to intense efforts by the pharmaceutical industry to ramp up protection in the supply chain.

However, thefts targeting the consumer care market were found to have skyrocketed by 575 percent over five years, from eight recorded cases in 2006 to 54 in 2010. This shift in targeting could be the result of the hardening of the pharmaceutical supply chain as well as the desirability of consumer care products on the black market, according to FreightWatch.

An exception to the growth trend is the steady decline in electronic products’ portion of overall cargo theft. In 2006, electronics accounted for 38 percent of all theft incidents, but only 19 percent of the total by 2010. In fact, last year marked the first time that electronics failed to top the annual list of theft incidents.

The percentage of thefts of tobacco products also declined to just 1 percent of the total for four years running.

One of the more noticeable trends over the past five years is the exponential increase in multi-trailer thefts, incidents in which more than one trailer (or even several trailers) is stolen in a single event. While this isn’t a new tactic employed by thieves, multi‐trailer thefts occurred at unprecedented levels in 2010, with 45 recorded incidents. Never before had multi‐trailer thefts reached double digits, a fact that serves as a warning to logistics providers.

In the first half of 2011 alone, 25 multi-trailer incidents — amounting to 67 stolen trailers — were recorded, compared with 16 incidents and 35 stolen trailers in the first half of 2010, Truckinginfo.com reports.

In 2011′s first half, FreightWatch recorded 433 cargo theft incidents total.

Looking ahead, the top concerns about supply chain risk are large-scale cargo theft incidents (full truckload/container theft), less‐than‐truckload theft and vendor security compliance. When asked why cargo theft will continue to rise over the next five years, respondents’ primary response was an increase in consumer demand for high-value products — specifically in the electronics, pharmaceutical and clothing markets — coupled with the continuing expense of these items.

“As a whole, supply chain professionals see cargo theft as a major risk for their operations over the next five years. With 74 percent having felt moderate to major impacts on their supply chain operations due to theft, coupled with the ever‐continuing rise in cargo theft rates and loss values, it is no wonder that this criminal enterprise looms as one of the most significant concerns of the decade,” FreightWatch’s latest annual supply chain report concludes. “As such, the industry continues to increase information sharing, best practices and cooperative measures to ensure the timely arrival and safe passage of goods throughout the nation’s supply chain.”

Earlier

How the Supply Chain Fought Cargo Theft in 2010

Cargo Theft Rate Climbed in 2009

Organized Crime Hitting Supply Chains

Resources

Annual Supply Chain Survey: Results 2011
FreightWatch, June 2, 2011

U.S. Cargo Theft: A Five‐Year Review
FreightWatch, April 27, 2011

…Cargo Thefts Declined Slightly in 2011′s First Half
Truckinginfo.com, Aug. 3, 2011

U.S. Cargo Theft: A Five-Year Review
CSO Roundtable

2011 3rd Quarter Supply Chain ISAC Report of Cargo Theft Activity
Supply Chain Information Sharing and Analysis Center (LoJack SCI)

2010 Supply Chain ISAC Report of Cargo Theft Activity
Supply Chain Information Sharing and Analysis Center (LoJack SCI)