Since MRC's inception in 2001, we have captured details of each cargo theft investigation in our proprietary database in order to watch trends, make comparisons across the years and effectively report to our clients. This is an invaluable tool not only for MRC and our clients, but also for law enforcement agencies where such a National database has not existed. In fact, the information in our database has been requested by Federal Agencies in developing regional cargo theft task forces specific to current patterns identified by our database.
We do note however that the Patriot Act was amended in 2006 to allow law enforcement agencies to report cargo crime as a specific event; no longer just a footnote under burglary or vehicle theft. While data from that change is likely to be slow in coming, there does appear to be some increased interest in working on the cargo crime problem by the FBI and the Justice Department. It also appears that those primarily concerned with Homeland Security are coming to recognize the linkages between theft of cargo and the general insecurity of the logistics system, and may be looking to do something about it.
Through our database, our experiences and sharing information with law enforcement and investigators across the world, MRC has identified the following trends in cargo theft:
MRC'S INTERNAL INTELLIGENCE
Over the past three years our data has shown that the cases we have investigated have most frequently occurred in Texas, Georgia and California.
60% of all thefts in our database were from these categories:
Consumer Electronics and Computers
We note that theft of building materials continues to grow and should be considered a highly targeted commodity. The value of such cargo has increased by as much as four times since Hurricane Katrina, and the demand generated overseas, especially in China, has created a greater market for copper, brass, bronze, aluminum and steel.
COMMON METHODS OF CARGO THEFT:
Follow drivers/Unattended vehicles
WHO IS RESPONSIBLE:
Local Crime Rings
Organized Crime Groups/Gangs
Many stolen loads are sold before they are stolen, particularly the
high value loads.
Electronics are frequently moved to major metropolitan areas like
Miami, and are often sold over the internet.
Clothing is sold on the internet, at flea markets, and through
Food is sold through "mom and pop" stores and discount outlets or
in bulk on the open black market.
Over the years we have seen a rapid increase in warehouse burglaries. Organized gangs, most often from south Florida, have burglarized between seventy-five and one hundred high value goods warehouses and distribution centers in twenty or more cities in the United States. Especially hard hit have been computer and consumer electronics warehouses in the areas surrounding Chicago, Atlanta, Dallas, Miami, central New Jersey, San Francisco and Los Angeles. These gangs tend to hit more than once in the same area. Members of these gangs have been arrested across the country including California, Florida, Kentucky, Tennessee, Georgia, Illinois and Texas.
These gangs are sophisticated in their operations. Potential targets are identified and studied in advance, with the perpetrators being employees, vendors or job seekers to observe the inside of facilities. Perpetrators also research targets via internet searches and extensive surveillance operations.
Once the target is identified, perpetrators use several different methods to attack the targeted premises. The most common and successful attack method is to cut the telephone lines to the facility, back off, and wait to see if anyone responds. The burglars enter the building, usually through a personnel door on the ground floor or through the roof, disable the alarm backup system, remove tapes from video systems, disable the computers and their communications systems, and use the facility's own equipment or equipment stolen from other facilities to load one or more trailers. Having previously conducted surveillance of the warehouse operations, the thieves generally break into the warehouse when they know they have 4-16 hours to load the trailers and can even make several trips. In addition, the thieves generally know what they want and have a specific quantity "on order."
Increased pressure from law enforcement in the area of narcotics and drug trafficking has resulted in the necessity of many criminals and organized crime rings to shift their activities to cargo theft and other transportation related areas. Statistics show that an estimated $30-$50 billion in cargo is stolen worldwide each year. These networked, international cargo gangs have the ability to bribe insiders and establish contacts that can provide valuable information on high-end cargo loads and associated logistics. According to reports from the Central Intelligence Agency, international organized crime groups are most likely responsible for over half the reported cargo losses worldwide.
One of the most recent trends emerging in international cargo crime is the ability of criminals to use the Internet and high tech copying equipment to duplicate nearly flawless official documents. With these documents, the criminals have the ability to fraudulently obtain any type of cargo, including entire shipments. Money launderers use the worldwide trade system to convert this stolen cargo into legitimate funds. In addition, the illegal sale of stolen cargo undercuts prices in legitimate businesses in the United States.
Over the past several years and since September 11, 2001, Customs and Border Protection has instituted C-TPAT (Customs-Trade Partnership Against Terrorism), and the CSI (Container Security Initiative). C-TPAT is a voluntary joint business-government initiative to strengthen U.S. border security. The program acknowledges that importers rely on the controls of all supply chain partners (carriers, brokers, warehouse operators and manufacturers) to ensure the integrity of their security practices. The program was launched in November 2001 with seven initial participants, all large U.S. companies. As of April 2005, there were more than 9,000 companies participating, according to Secretary of the Department of Homeland Security.
Our overall impression is that organized crime is taking a larger role in cargo crime. Thefts are becoming more sophisticated, and although technology to secure and track cargo is improving, criminals often seem to be able to find ways to circumvent it. Underwriters, shippers, carriers, and warehousemen need to focus strongly on loss prevention, and many of them are doing that already as they work to comply with C-TPAT and other federal programs.