Cargo Theft and Protecting Your Shipment
Cargo Theft and Protecting Your Shipment. Did you know that each year about $30 billion worth of cargo is lost due to theft? Understanding the causes and more prominent times of cargo theft can help you protect your shipments.
It’s a tale as old as shipping and trade. Cargo is on the way to a designated location, only to be taken unexpectedly to another location by someone not involved in the shipment. Sounds like modern-day pirates. Cargo theft is arguably the most unfortunate part of the freight shipping process, especially when nowadays shipping cargo effectively and efficiently is so important for small businesses. But there are ways you can prepare and protect your shipment from the cargo thieves out there. We’re diving into cargo theft and protecting your shipment.
Cargo Theft: Facts and Causes
Cargo theft is big business and is sadly not going away anytime soon. The new trend among cargo thieves is resorting to only taking a small portion of a truckload’s cargo rather than the whole thing. According to data from CargoNet, partial theft practices increased by 60% in the first quarter of 2020 compared to the first quarter of 2019, and by 34% in the second quarter of 2020 compared to the second quarter of 2019.
This begs the question, what causes cargo theft? A few factors that cause upticks in cargo theft incidences include:
Economic conditions. The COVID-19 pandemic brought great strains on supply chain flexibility and overall economic mood. This often leads to an increase in cargo theft.
Natural disasters. Similar to economic conditions, natural disasters could cause cargo theft in impacted areas. In a limited capacity and flexibility situation, cargo is more prone to theft.
Busy shipping seasons. The fourth quarter of every year often sees an increase in cargo theft simply because of the busy holiday shipping season. Long weekends throughout the year are also common times for cargo theft.
Highly populated areas. High-volume locations like big cities or highly populated states are prone to cargo theft. So are areas where storage and warehousing are prominent.
What Kinds of Cargo Are at Risk of Theft?
When it comes to cargo theft, the thieves aren’t too picky. However, the most cargo types targeted by these pirates are food and drink products, pharmaceuticals, and electronics.
Additionally, certain areas of the nation have higher cargo theft rates than others. According to Food Logistics, places like Tennessee and Illinois have large amounts of storage and warehousing, making them suitable environments for theft. In states with ports like California, Florida, Georgia, New Jersey, and Texas, there is more volume of products in transit for thieves to target. Houston is one of the country’s top export regions, leaving the door open for fraud. Many of these states also ship the most targeted types of cargo frequently.
Protecting Your Shipment From Cargo Theft
As the shipper, you could do a couple of things to protect your shipment. Two key ways to protect your shipment from cargo theft are getting the right insurance coverage and filing a freight claim in the event of theft. Here’s how each can help you mitigate supply chain disruptions and keep your shipping processes running smoothly.
Getting the Right Coverage
Knowing the critical differences between carrier liability and freight insurance policies is vital. Carrier liability refers to what the carrier is responsible for covering. Freight insurance provides additional coverage above and beyond the carrier’s default protection policy or limited liability coverage. It can offer protection for the full value of your shipment as opposed to simple carrier liability policies.
Getting the right freight insurance coverage to cover your shipment in the event of cargo theft helps your business avoid losing money. You can download our free Freight & Liability Insurance Explained eBook for a more comprehensive look at freight insurance options.
Filing a Freight Claim
You’ll need to know how to file a freight claim for cargo theft. Each carrier has its freight claim filing process, and following their instructions is important. Contacting your carrier for specific details will help keep the claims process moving. Below are the general steps you need to take to file a freight claim:
Complete the carrier’s claim form.
Provide a copy of the repair quote, if the item is able to be repaired.
Provide the copy of the salvage/scrap value, if the item is salvageable.
Submit the claim per the carrier’s instructions to the carrier’s claims department.
If your cargo is stolen and you have to file a claim with the carrier, you likely won’t have a copy of the repair quote or salvage/scrap value. In this situation, make sure you have the manufacturer’s documentation, your Bill of Lading, and any other important documents regarding the cargo and the shipping information.
Protecting and Preventing Cargo Theft with a 3PL
Don’t let possible pirate attacks stop you from shipping. We can help you determine if you should add additional insurance. Get the added security your shipment needs and experience the FreightCenter difference today with a free online quote or call us at 8007167608.
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