Canadian Underwriter

How supply chain back-ups are contributing to cargo theft

March 9, 2022   by Jason Contant

Large distribution centre with many trucks

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Supply chain disruptions and back-ups due to COVID-19 and other factors (such as a shortage of drivers or trucks to deliver product) are contributing to concerns around cargo theft, a transportation industry expert says.

“When you have more [cargo] that’s sitting around, that’s going to increase that level of concern around cargo theft because you just know that there’s more of it to target,” Scott Cornell, national practice leader of transportation with Travelers’ inland marine division, says in an interview. “Keep in mind, too, the more that’s sitting around, the harder it is to predict where they’re going to go to steal it.”

When less space was being used to store or park the cargo, “you knew that if [cargo thieves] were going to steal it, they had to go to these specific areas,” Cornell says. “Now if it’s more spread out…if you’re trying to use different lanes to relieve some of that pressure, you’re also creating a wider spread of location where that theft can occur and now you have to defend against that.”

Another ripple effect on a build-up of supply is some clients may need to rent space in another yard that may not be as secure as their “normal” yard, for example. “Now if you’re backed up and you need more space, you’re going to have less control over the environment that cargo is stored in because you’re literally just looking for space.”

What can your clients do to prevent or mitigate cargo theft?

Obviously, cargo insurance can help. Clients may need different cargo insurance coverage depending on their role in the supply chain. For example, legal liability-based cargo insurance covers the cargo itself; other forms act like a “named peril” to specifically lay out what is and is not insured. “Cargo insurance in general is designed to provide coverage for that property that’s on the move and considered cargo,” Cornell says.

Semi-truck at a storage warehous

While the average driver usually tries to be very alert about the possibility of cargo theft, it can be empowering to share information with drivers, especially if it’s directly relevant to what they’re moving, Cornell says.

“If you have a driver who’s moving electronics, let’s provide detailed information to that driver over where the electronics are being stolen, what electronics are being stolen, how they’re being stolen, when they’re being stolen,” he says.

“That provides the driver with some really good information on which they can make the best decision. For example, ‘Hey, I’m not going to park it here.’ Or, ‘If I park it here, I’m going to use the locking devices that I have, or I’m going to back the trailer up to something so that the rear doors can’t be opened. I’m going to make sure it’s in a well-lit area and that there’s a lot of people that can see my tractor-trailer.’ Things like that.

“I think empowering the drivers with that knowledge, so that they know what they can do to avoid [theft] and contribute to your security plan, is a very powerful thing.”

Cornell adds it’s important for clients to answer the following questions:

  • What’s your plan if you experience a theft? (Do you have a plan?)
  • Are you ready? How are you going to react?
  • What are your resources?
  • Have you done a tabletop/desktop exercise that you’ve laid out with staff that if we do encounter a theft incident, here are the steps we’re going to take, and these are the people that need to be called?

Cargo theft in Canada tends to be concentrated in areas of large economic and population density, such as the Toronto and Montreal areas. While some regions (such as Peel and York regions in Ontario) have some enforcement dedicated to cargo theft, not every region does, Cornell says. “And those resources are limited; they can only handle so much. So, what is your plan?”


Feature image by Lindstrom