Insights and articles

Cargo theft

Cargo security within containers was once a challenge for insurers. When cargo is onboard a ship it is easy to protect, the majority of cargo theft occurs during the final two or three days after it has been unloaded at the port, and the final distribution by road or rail begins.

Common practice was to consolidate smaller loads into one container. Containers were opened a number of times during the transit period to add to, or deliver part of, the load. This frequent accessing of the load gave rise to many opportunities for pilferage.

Today we see fewer consolidated loads, improved container security as well as increased security at ports. Stevedores can no longer easily take advantage of open containers. While increased security has meant a reduction in number of theft claims, those that do occur are much bigger in value - the average dollar value of claims has risen by 500 per cent in the last 15 years.

Theft happens now on a much bigger scale, involving organised crime and a lucrative black market. Changes in criminal distribution networks have spawned an increase in major hijackings and violent crime. In the US for example, many of the high value goods come in via Mexico where criminal gangs are very active. But this problem is not limited to North America, it is as pressing in Northern Europe and South America.

Gangs are not only stealing containers but are attacking warehouses where products are stored. In some countries, the quality of warehousing is poor, secure parking for trucks non-existent and road quality inferior. There is also active banditry in some areas and intermediate storage facilities are poorly protected.

Tech-savvy criminals are exploiting online freight exchange websites to access information. The ease of access and user-friendliness of cargo tracking facilities represents a new potential security threat to shippers for products with strong market demand. Disposing of stolen goods is not a problem. These days goods can be ordered on the internet from anywhere in the world, with the end consumer having no idea of the source of the goods or even if the source is legitimate. These gangs run sophisticated operations, target specific goods and sell them according to demands on the black market.

However, there are some simple measures a shipper can take to help protect their cargo:

  • Know your logistics provider and review freight contracts regularly
  • Ensure that your provider uses secure parking where available
  • Check routes in advance and identify alternatives
  • Make sure your online cargo tracking facilities are secure
  • Install tracking devices and have a plan to intervene if necessary.

Importantly, make sure you have a marine cargo policy in place that includes cover for theft and protects your goods until the final destination with a Sellers Contingency clause if applicable. Your policy should be with a local provider who has access to a world-wide network of marine surveyors who can assist you if something happens to your goods while they are overseas.


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