STORES Magazine - May 2011 - (Page 90)

LOSS PREVENTION / ORC Cargo Theft is On the Rise Reports on freight theft show a dramatic increase BY DAVID P. SCHULZ G oods rolling down the highway don’t always make it to their retail destination. In fact, loads of merchandise are stolen nearly 20 times a week, according to two organizations that track cargo theft on the nation’s highways and byways. Global logistics security solutions provider FreightWatch International recorded “899 cargo theft incidents with an average value of $471,200 per incident,” says senior director of intelligence Dan Burges. That adds up to $423.6 million in direct losses via large-scale cargo theft events; it does not include indirect costs like lost or damaged trailers and tractors, increased insurance rates or additional security, nor does it take into account “the vast array of small-scale losses such as dock pilferage, shrinkage, employee theft and the like,” Burges says. Additionally, “We know there are ample [unreported] thefts which we don’t find out about,” he says. Cargo theft information clearinghouse CargoNet reports there were 1,035 theft incidents last year, up nearly 50 percent from 2009 (the first year it began collecting such data). Value of the goods stolen in these thefts was estimated to be in excess of $400 million, roughly matching FreightWatch’s estimate. But as Maurizio Scrofani, CargoNet’s president, notes, “That is a difficult number to solidly communicate. The FBI states the problem as being between $15 billion and $30 billion.” Scrofani attributes the wide variance in theft estimates to insufficient information sharing, fragmentation of databases and staffing demands. “We are well aware that we are scratching the surface,” Scrofani says. “As multiple industries continue to communicate and work in a collaborative fashion, we should see an uptick in reporting based on communications alone.” Theft follows unemployment In its 2010 United States Cargo Theft Report, CargoNet parent Verisk Analytics tied theft directly to the national economy, specifically the rate of unemployment. The moving three-month average of cargo theft “shows that thefts traveled in the same direction as unemployment, with a one-month variance.” Another, perhaps more relevant, correlation detected by Verisk Analytics was “a strong relationship between cargo thefts and the retail cycle, which primarily runs from February 1st to January 31st.” The monthly averages show cargo theft incidents increased during April, May and June, then crested in July, one month earlier than the peak of retail sales, according to the CargoNet report. In the fall, there was a significant increase in freight theft during September and October, anticipating the retail holiday selling period between Thanksgiving and Christmas. Toward the end of the retail sales cycle, cargo theft incidents correspond to sales patterns in terms of both the decline after Christmas and the climb past the beginning of the retail sales calendar from February forward, with an increase (for Easter) in March, the report notes. “In 2010 we recorded more than 40 multi-trailer theft incidents, a dramatic growth over 2009, showing that criminals are attempting to gain more product and payoff for each job they attempt.”— Dan Burges, FreightWatch 90 STORES / MAY 2011 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - May 2011

STORES Magazine - May 2011
Editor’s Page
President’s Page
Retail People
Supply Chain
Getting Closer to Customers
Workforce Management
Customer Satisfaction
Customer Rewards
Human Resources
2011 Software Sourcebook Guide
Website Security
Divisional Update
NRF News
Point of View
Retail Industry Calendar
End Cap

STORES Magazine - May 2011