How to Minimize Cargo Theft in Your Supply Chain

This month, a large cargo heist made international news when over a dozen armed thieves stole 20 shipping containers loaded with valuable goods from a freight yard near the port of Manzanillo, Mexico.

While the size and complexity of this heist are unique, similar stories frequently emerge from transportation hubs around the world. In 2021 and 2022, thieves took advantage of back-logs in Los Angeles to raid cargo containers. And, throughout 2021, armed robbers targeted ships waiting to dock in Manila Bay. All these events highlight the risk of cargo theft even in the increasingly automated and closely-watched ports and warehouses we use today.

While supply-chain disruptions due to COVID-19 restrictions make cargo more vulnerable, cargo security is a concern for international retail businesses in any season. Cargo theft not only causes immediate financial losses but also frustrated buyers who lose trust in your business.

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While it may seem there is little you can do as a brand to prevent compromised cargo, you can gain significant control over your cargo’s security by working with the right logistics partners. Let’s take a closer look at shipping security, different types of cargo theft, and what you as an e-commerce business can do to ensure safety in your supply chain.

Cargo theft: how big of a problem is it? 

According to CargoNet, in the US alone, net losses from cargo theft rose from 49 million dollars in 2019 to 68 million dollars in 2020. The actual economic loss is estimated to be up to ten times the cost of the stolen goods. Providers not only need to replace their stolen products, they also must repay shipping fees, customs fees, taxes, and more. 

Despite alarming headlines like these, cargo theft is on a decline, after reaching an all-time high in 2020. 

Where is cargo stolen?

Globally, most cargo theft occurs when goods are being transported, according to annual cargo theft reports published by the global supply chain intelligence providers BSI Supply Chain Services and Solutions and TT Club. 

However, the 2021 Cargo Theft Report shows that more thieves are targeting cargo at warehouses, distribution centers, and truck stops. 

In 2019, 29% of cargo thefts took place while goods were at storage facilities or factories, an increase of 4% from the year before. Additionally, theft from containers increased by 3% and theft from employees increased a whole 7%. These trends reveal that both thieves and inside actors can take advantage of supply-chain disruptions to steal goods while they are at rest. 

Different threats in different markets

Depending on the country and region you operate in, the threats of cargo theft vary. For example, countries with large import and export markets are a target for strategic heists and organized crime. Regions that rely on long-distance vehicle transport are more vulnerable to hijack attempts.  

Here’s a more specific list of cargo threats by region:

Europe, North America, and South America

In Europe and the US, the greatest threat is in-transit theft and supply-chain disruptions. This was especially evident in the United States when port congestion reached a record high in 2021. The average wait time for ships spiked to 17 days, and, as a result, containers piled up, pushing warehouse capacity to burst. When drivers were forced to move cargo to less secure overflow lots, thieves exploited the situation. 

In Europe, traffic congestion at border crossings contributes to the continued high levels of cargo theft. The risks are greatest at rest stops, parking lots, and facilities. Nearly 20% of all theft incidents reported in Europe also involved insider participation. 

In South American countries, most cargo theft occurs in transit; however cargo at warehouses and facilities is still at risk. Brazil was among the top 5 counties impacted by cargo theft for both 2020 and 2021, and reports also show a slight increase in insider participation in cargo theft during the past two years.

The Middle East and Africa  

In the Middle East and Africa, theft from warehouses now surpasses in-transit theft. In these areas, 76% of cargo theft occurs in warehouse and storage facilities, and high-value goods such as electronics are often targeted. This trend also reveals that insider participation and corruption play a large role in these incidents. 

Because of free trade zones in Saudi Arabia and the United Arab Emirates, these countries, in particular, receive large volumes of cargo for import and re-export. This activity is conducive to smuggling schemes, unfortunately often perpetrated by security company employees or drivers. 

Asia

The countries with the highest incidents of cargo theft within Asia in 2021 were India, Indonesia, China, and Bangladesh. In these countries, and Asia as a whole, storage-based cargo thefts account for approximately 50% of theft incidents. 

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However, in Southeast Asia, there also are a significant number of in-transit thefts. Both storage-based and in-transit cargo thefts are often a result of bribery and corruption. According to the 2021 Cargo Theft Report, the percentage of thefts conducted through fictitious pick-up and route diversion rose in 2021, and insider participation in cargo theft is a growing concern for supply chains in 2022. 

What is stolen? 

Usually, high-value and essential goods are targeted in cargo theft — especially in larger schemes. Globally, foods and beverages are among the most stolen goods, constituting on average 23% of stolen goods between 2018 and 2021. In 2021, agricultural produce also appeared among the top 5 commodities stolen, representing 12% of total stolen goods. 

On average, 10% of stolen items are computers, televisions, or other electronic devices. 

Construction materials usually constitute around 5% of stolen goods. But in 2021, this jumped to 9%, reflecting increased demand for materials due to sky-high lumber and steel prices. 

Types of cargo theft 

There are several types of cargo theft, and each requires different safety precautions to minimize risk. 

• Pilferage, or the stealing of cargo with little value, is an age-old problem. The perpetrators are often petty thieves with inside connections. Thankfully, pilfering incidents are on the decline due to better data tracking, high-security locks and cameras, and increased industry reporting.
• Straight cargo theft also involves stealing cargo physically from a location. But, while pilfering refers to stealing small amounts of inexpensive items, straight cargo theft involves stealing larger amounts of either valuable or invaluable goods. It occurs mainly at locations where cargo is at rest and unattended, such as at truck stops, drop lots, or warehouses. 
• Strategic cargo theft is constantly evolving and involves everything from fraud and identity theft to armed heists. One strategic tactic is fictitious pick-ups where thieves pose as or work with transportation providers to steal the cargo.
• Technology-aided theft is on the rise. Cyber-attacks and phishing schemes can give criminals access to sensitive delivery and transportation information. Some criminal groups also use GSP jammers to prevent law enforcement from locating stolen goods. Others replace security seals and locks on containers by using 3D printing, making it harder to detect tampering with shipping containers.

What can you as a brand do to make your cargo more secure?

While it’s hard to maintain strict oversight over every part of your supply chain, here are some key precautions that you can take as a brand to maximize cargo security:

1. Know where your supply chain is most vulnerable. 
2. Have clear security procedures for employees and providers.  
3. Make sure partners utilize modern security technology to protect your cargo.
4. Plan to reduce unnecessary rest time at warehouses or freight yards.

Or, work with a provider that gives you peace of mind

As a brand, control over your logistics partners and routes means more control over product security. And while using a full-service courier like DHL or Amazon can seem like the easy option, they provide little transparency for which providers they use and where they ship your goods.

In terms of security, it may seem like your business is stuck between a rock and a hard place: you either need to build your own supply chain from scratch or trust a corporation to do it for you. One is expensive and the other isn’t transparent for you or your customer.

We created our logistics business, CBIP, to provide a third option for brands and retailers who want more control over their logistics without doing everything themselves. We’re a fourth-party logistics company, a new type of logistics business for the 21st century.

When you work with us, you get a network of trusted logistics providers with full transparency on where they’re located and the risks involved with your plan. The best part? We can change your network based on increased risks of cargo theft. You can read about our six-step plan to create better logistics for your business here.

Interested in taking control of your network? Get on a free call with one of our professionals and we can tell you exactly how we’ll help.