Authors: Chris Demetroulis Christina Reiz
According to Verisk CargoNet, cargo theft activity in the US and Canada surged to unprecedented levels in 2024, experiencing a 27% increase in incidents compared to the previous year.* Additionally, the estimated average value per cargo theft climbed to $202,364, marking a 7.7% rise from $187,895 year over year.
Cargo theft has long been a challenge in the logistics sector, with sophisticated criminal groups continually targeting high-value freight despite rigorous vetting by freight forwarders and brokers. These groups have adapted to modern security measures, making it increasingly challenging for traditional methods to effectively prevent theft, even when aligned with current risk mitigation best practices.
Key risk mitigation strategies
In the face of ongoing threats from organized criminal groups targeting theft-attractive loads, implementing key mitigation strategies is crucial to fortifying defenses and ensuring the secure transportation of cargo.
- Security training and awareness: Educate employees, drivers and logistics personnel about the risks of cargo theft and the importance of security protocols. Regular training sessions can help reinforce best practices and vigilance.
- Use of technology: Implement GPS tracking systems and telematics to monitor the location and status of cargo in real-time. Security cameras and alarm systems can also be installed at warehouses and loading docks.
- Secure parking: Encourage drivers to park in secure, well-lit areas, preferably in locations with surveillance cameras or security personnel. Avoid parking in isolated or high-crime areas.
- Cargo seals and locks: Use high-security seals and locks on trailers and containers to deter tampering and unauthorized access. Regularly inspect seals for signs of tampering.
- Route planning and diversification: Plan routes carefully to avoid high-risk areas known for cargo theft. Consider diversifying routes to make it harder for thieves to predict cargo movements.
- Background checks: Conduct thorough background checks on employees, especially those involved in transportation and logistics, to ensure they have no history of theft or criminal activity.
- Collaboration with law enforcement: Establish relationships with local law enforcement agencies to facilitate quick response in case of theft. Share information about theft trends and hotspots.
- Secure loading and unloading procedures: Implement strict protocols for loading and unloading cargo, including verifying the identity of personnel involved and monitoring the process.
- Regular audits and inspections: Conduct regular audits and inspections of security measures and procedures to identify vulnerabilities and areas for improvement.
- Driver safety protocols: Encourage drivers to remain vigilant and report any suspicious activity immediately. Provide them with emergency contact numbers and procedures.
Key steps to vet and qualify drivers for high-value loads
Despite the implementation of risk mitigation strategies, organized criminal groups continue to find ways to access theft-attractive loads. Consider these steps for any high-value load, whether insured under Cargo Legal Liability or Shipper's Interest, to vet and qualify drivers.
- Use platforms such as Carrier 411 and Highway for researching, vetting and qualifying motor carriers.
- Avoid placing high-value loads on "load boards."
- Use TrumpCard asset division or directly contract with vetted motor carriers to minimize reliance on third-party freight brokers for better control.
- Train your team to verify changes in motor carrier contact details manually by confirming directly with the carrier.
- Re-vet motor carriers every 45-60 days using resources such as Carrier 411.
- Establish formal procedures for addressing concerns, including contacting relevant parties, engaging an internal escalation team and notifying customers promptly.
Take action at renewal
Gallagher's global transportation insurance professionals are actively monitoring all evolving and emerging threats to enhance your business resilience in both the short and long term. Another way to think about resiliency is improving how your business identifies and manages its risk profile and potential other gaps in coverage. Your risk profile is how insurers evaluate your organization's risk — determining premiums, coverage and terms. Improving your risk profile involves reducing potential threats and strengthening your ability to handle unexpected events, which can lead to better insurance terms, increased investor confidence, greater organizational stability and opportunity for innovation.
Collaborating with a proactive broker is essential; a broker can analyze your unique risks and coverage gaps, negotiate with carriers to secure the best terms and provide insights and strategies to strengthen your risk profile.
