Interstate cargo transportation is a crucial form of freight distribution in the United States. According to data provided by the U.S. Department of Transportation (DOT), cargo trucks carry the majority of freight in the continental United States, in both tonnage (66%) and value (73%). The trucking industry brought in $676.2 billion in revenue in 2016, according to the American Trucking Associations’ (ATA) American Trucking Trends 2017 report. Although the industry is a lucrative one, it’s also vulnerable to a number of costly risks, one of which is cargo theft.
Cargo Theft and Fictitious Freight Pickups
Advances in technology have greatly improved the safety and efficiency of the transportation industry. In a similar manner, technology has made things easier for thieves as well. There were almost 650 reported cargo thefts in 2017 with an average loss value of around $146,000 per incident. In addition to in-transit theft and cargo pilfering, some companies have found themselves victims of fictitious freight pickups. By impersonating trucking firms, thieves can simply pick up a trailer and be gone before the loss is even realized, making it even more difficult to recover.
The interstate cargo insurance market has a lot of options for insuring cargo against loss or damage. While theft is typically a covered peril, exclusions may remove coverage for driver theft or theft from unattended vehicle. Luckily, there are things that transportation companies can do to help reduce their risk of theft.
- Be aware of high-risk areas and times. In 2017, California was once again the leader in cargo thefts, followed by Texas, then New Jersey, Florida and Georgia. The holiday season tends to be a higher risk time of year for cargo theft due, in part, to the increase in shipments and cargo on the road.
- Set reasonable goals for drivers. Drivers who are rushing to meet unreasonable goals can put their cargo in jeopardy. For example, a driver may be forced to stop the truck in an unfamiliar or unsafe area to rest, leaving it more susceptible to theft.
- Carefully vet drivers and contractors. Employee theft and fictitious pickups most often are successful because no one took the time to check all identification to validate driver and other transportation personnel identities. Enacting a step-by-step carrier qualification process and ensuring it is consistently followed can help reduce employee theft and other inside jobs.
- Keep cargo moving and attended to. Cargo at rest is cargo at risk, as the phrase goes. And not only does leaving a vehicle unattended for too long increase the risk of theft, it removes coverage for that type of loss. Ensure drivers are sticking to scheduled routes, stopping in safe areas, and staying close to their vehicle at all times when on a break.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.