We get asked all the time to explain Non-Trucking coverage. The below is a simple and great explanation as told by Zurich.
Non-trucking liability insurance does not apply to bodily injury or property damage while a covered auto is used to carry property in any business or while a covered auto is used in the business of anyone to whom the auto is leased or rented.
Background – In most cases when an independent trucker signs a contract leasing his services to another trucking firm, primary insurance coverage is provided by that trucking company, but only while the vehicle is being operated under their authority. This creates a need for the independent trucker to have his own coverage that applies when it is not being used for business purposes.
Eligibility – Non-trucking coverage is available to any trucker that has signed a contract leasing his unit to another trucking company for a period of 30 days or more. This would typically apply to only tractors, trailers, and heavy trucks are eligible for coverage.
Notes – This coverage is low priced because it is very restrictive. If the independent trucker is transporting goods or in any way operating the vehicle for business purposes, there is no coverage. Hired and non-owned coverage & hazardous materials cannot be written in conjunction with a non-trucking policy. Additional insured endorsements should not be issued with non-trucking policies, with the exception of loss payable interests. When physical damage is provided for owner-operators as part of a non-trucking policy, the physical damage coverage applies whether the owner-operator is using the vehicle for business purposes or not.
Wednesday, December 30, 2009
Tuesday, December 22, 2009
Cargo Theft 101- The simple problem and the simple solution
Cargo theft is an often discussed issue in transportation insurance. One of our companies has written a treatise to address the issue and prevention. While it is written with the trucking insured in mind, it should not be construed to be a comprehensive policy. In the end, prevention should dovetail insurance coverage. Note the article does not address the many technological solutions that are out there for truckers, brokers, and shippers. Even so, it gives a very nice overview of the problem and a solution.
Motor Truck Cargo Theft
Cargo theft is a crime of opportunity. Goods transported along our nation’s highways are abundant and easy to access, offering cargo thieves low risk of detection and a potentially lucrative career. Law enforcement and industry officials estimate cargo theft costs the U.S. shipping industry $25 billion a year(1.)
Trends
Pharmaceuticals, building supplies, consumer electronics, computers, food and drugs are the most frequently targeted cargos in the shipping industry. The rate of theft of these types of cargos tends to increase during a depressed economy.
Cargo theft occurs most frequently in cargo terminals, transfer facilities and cargo consolidation areas. Other high-target areas include truck stops, parking lots, warehouses and trucks parked on the street. Although cargo theft occurs throughout the U.S., the most highly targeted theft states are Texas, Georgia, Tennessee, California and Florida(1).
Methods of Cargo Theft
A variety of methods are used to steal cargo(2.):
• Terminal robbery - organized groups enter a trucking facility, hold security guards or employees hostage and steal one or more loaded vehicles.
• Hijacking - cargo thieves conduct surveillance on a target after receiving “inside” information on the load. Once the driver stops, one or more gunman enters the cab, detain the driver and transport the load to a pre-determined destination.
• Burglary - a “theft group” enters a facility, posts one or more individuals to act as lookout then opens trailers or containers searching for valuable goods.
• Driver/insider information – a driver or employee stages a hijacking using advance knowledge of a specific trailer or container load and provides cargo and transportation information to a group preparing for a heist.
• Counterfeit shipping documents - drivers, acting as independent contractors, present counterfeit paperwork to security guards and flee with valuable loads of cargo from terminals.
• Grab and run - favored by criminals targeting trucks loaded with high-tech equipment, an individual or group follows a targeted truck in a van. Once the truck comes to a stop, suspects exit the van, open trailer doors and off-load cargo before the truck takes off.
Methods used to steal cargo(2.) (continued):
• Warehouse stolen cargo - stolen rigs are taken to a pre-designated storage facility for off-loading and storage. Warehouses include industrial storage facilities, public storage facilities, restaurants, pallet yards, single-family houses, apartments and abandoned or condemned buildings.
• Stealth Technology - battery powered GPS transmitters are installed to track pre-selected trailer loads. Criminals follow the signal and wait for it to be detected "at rest” then advance toward trailer and either off-load cargo or move the trailer to a safe harbor for unloading.
What Is Being Done:
The US Patriot Improvement and Reauthorization Act, passed in 2006, increased prison terms for those convicted of cargo theft. Theft of cargo worth less than $1,000 is punishable by three years in prison and up to 15 years in prison for theft of cargo worth more than $1,000. The law also requires cargo theft be listed under its own code in the Uniform Crime Reporting System, a national database used by the FBI.(3)
Prevention Measures
Prevention measures play an important role in limiting opportunities for theft. Actions that should be taken to help limit exposure to theft include:
a)Personnel
Pre-employment screening can be the first line of defense against cargo theft. Informants within an organization are often a major cause of cargo and vehicle thefts. Follow these basic practices to avoid hiring applicants who are likely to engage in cargo theft.
• Require every applicant to provide a list of previous employers and contact information going as far back in their work experience as possible
• Look for employment gaps that may indicate attempts to hide unfavorable references or unemployment
• Require applicants to provide motor vehicle reports, credit history and criminal background investigations, or request an authorization to obtain such reports
• Require controlled substance and alcohol testing for each applicant
• Provide initial and ongoing employee training
• Use locks or other protective devices to restrict employee access
b)Operations
Unattended vehicles
• Vehicles should be equipped with alarm systems
• Lock the vehicle up to and immediately following departure inspection
Operating in high risk areas or transporting valuable cargo
• Security procedures and precautions should be elevated to the highest level feasible
• Unauthorized stops in non-secured areas should be prohibited
• Vehicles should be manned by two drivers
• Drivers should move in convoys
• Ensure two-way communication with a home base
– Consider the use of a security escort in the convoy
Route schedule
• Schedule the most direct route from point A to point B with a minimum number of stops.
• Give instructions never to leave the cargo unattended for any period of time in a non-secured area.
• Routing and scheduling considerations:
- Geographic scope
- Travel to/through known or likely theft and hijacking areas
- Equipment changes and driver or team changes
• Deviations from the specified route must be reported to the company
• Loads or shipments should not be sub-contracted to third party without written permission
Secure information
• Educate all employees about the dangers of sharing any information on cargos being transported
• Determine communication responsibilities among shippers and truckers
• Consider inviting a local law enforcement agency to assess security
c)Equipment
• Examine equipment for integrity and condition prior to use
• Seal/lock trailers or containers
• Seal trailers or containers which are loaded but not immediately picked up or offloaded and back them securely against a solid wall
• Document the cargo loading process with video or photographic files
d)Driving rules
• Require photo identification at all facilities before cargo is tendered
• Equip all drivers with cell phones or use of a two way radio
• Monitor communication from a base operation
e)Facilities
• Require adequate lighting around the loading/unloading areas and parking lots
• Establish fencing or other barriers to prevent unauthorized entry
• Utilize gate and automated yard locks
• Deploy automated fire, burglar and video cameras systems
• Provide security personnel, or a central station monitored alarm system, subject to periodic audit by carrier personnel or authorized agents
Preparation and prevention can mean the difference between cargo arriving safely at its destination or ending up in the hands of thieves. Take time to understand the risks and protect your business.
1 FreightWatch International, 2009 Global Cargo Theft Summary Report, FreightWatch International February 11, 2009.
2 California Highway Patrol, Commercial Vehicle Section, Cargo Theft Interdiction Program,
http://www.chp.ca.gov/programs/ctip.html, 2009.
3 Federal Bureau of Investigation, CARGO THEFT'S HIGH COST Thieves Stealing Billions Annually
Motor Truck Cargo Theft
Cargo theft is a crime of opportunity. Goods transported along our nation’s highways are abundant and easy to access, offering cargo thieves low risk of detection and a potentially lucrative career. Law enforcement and industry officials estimate cargo theft costs the U.S. shipping industry $25 billion a year(1.)
Trends
Pharmaceuticals, building supplies, consumer electronics, computers, food and drugs are the most frequently targeted cargos in the shipping industry. The rate of theft of these types of cargos tends to increase during a depressed economy.
Cargo theft occurs most frequently in cargo terminals, transfer facilities and cargo consolidation areas. Other high-target areas include truck stops, parking lots, warehouses and trucks parked on the street. Although cargo theft occurs throughout the U.S., the most highly targeted theft states are Texas, Georgia, Tennessee, California and Florida(1).
Methods of Cargo Theft
A variety of methods are used to steal cargo(2.):
• Terminal robbery - organized groups enter a trucking facility, hold security guards or employees hostage and steal one or more loaded vehicles.
• Hijacking - cargo thieves conduct surveillance on a target after receiving “inside” information on the load. Once the driver stops, one or more gunman enters the cab, detain the driver and transport the load to a pre-determined destination.
• Burglary - a “theft group” enters a facility, posts one or more individuals to act as lookout then opens trailers or containers searching for valuable goods.
• Driver/insider information – a driver or employee stages a hijacking using advance knowledge of a specific trailer or container load and provides cargo and transportation information to a group preparing for a heist.
• Counterfeit shipping documents - drivers, acting as independent contractors, present counterfeit paperwork to security guards and flee with valuable loads of cargo from terminals.
• Grab and run - favored by criminals targeting trucks loaded with high-tech equipment, an individual or group follows a targeted truck in a van. Once the truck comes to a stop, suspects exit the van, open trailer doors and off-load cargo before the truck takes off.
Methods used to steal cargo(2.) (continued):
• Warehouse stolen cargo - stolen rigs are taken to a pre-designated storage facility for off-loading and storage. Warehouses include industrial storage facilities, public storage facilities, restaurants, pallet yards, single-family houses, apartments and abandoned or condemned buildings.
• Stealth Technology - battery powered GPS transmitters are installed to track pre-selected trailer loads. Criminals follow the signal and wait for it to be detected "at rest” then advance toward trailer and either off-load cargo or move the trailer to a safe harbor for unloading.
What Is Being Done:
The US Patriot Improvement and Reauthorization Act, passed in 2006, increased prison terms for those convicted of cargo theft. Theft of cargo worth less than $1,000 is punishable by three years in prison and up to 15 years in prison for theft of cargo worth more than $1,000. The law also requires cargo theft be listed under its own code in the Uniform Crime Reporting System, a national database used by the FBI.(3)
Prevention Measures
Prevention measures play an important role in limiting opportunities for theft. Actions that should be taken to help limit exposure to theft include:
a)Personnel
Pre-employment screening can be the first line of defense against cargo theft. Informants within an organization are often a major cause of cargo and vehicle thefts. Follow these basic practices to avoid hiring applicants who are likely to engage in cargo theft.
• Require every applicant to provide a list of previous employers and contact information going as far back in their work experience as possible
• Look for employment gaps that may indicate attempts to hide unfavorable references or unemployment
• Require applicants to provide motor vehicle reports, credit history and criminal background investigations, or request an authorization to obtain such reports
• Require controlled substance and alcohol testing for each applicant
• Provide initial and ongoing employee training
• Use locks or other protective devices to restrict employee access
b)Operations
Unattended vehicles
• Vehicles should be equipped with alarm systems
• Lock the vehicle up to and immediately following departure inspection
Operating in high risk areas or transporting valuable cargo
• Security procedures and precautions should be elevated to the highest level feasible
• Unauthorized stops in non-secured areas should be prohibited
• Vehicles should be manned by two drivers
• Drivers should move in convoys
• Ensure two-way communication with a home base
– Consider the use of a security escort in the convoy
Route schedule
• Schedule the most direct route from point A to point B with a minimum number of stops.
• Give instructions never to leave the cargo unattended for any period of time in a non-secured area.
• Routing and scheduling considerations:
- Geographic scope
- Travel to/through known or likely theft and hijacking areas
- Equipment changes and driver or team changes
• Deviations from the specified route must be reported to the company
• Loads or shipments should not be sub-contracted to third party without written permission
Secure information
• Educate all employees about the dangers of sharing any information on cargos being transported
• Determine communication responsibilities among shippers and truckers
• Consider inviting a local law enforcement agency to assess security
c)Equipment
• Examine equipment for integrity and condition prior to use
• Seal/lock trailers or containers
• Seal trailers or containers which are loaded but not immediately picked up or offloaded and back them securely against a solid wall
• Document the cargo loading process with video or photographic files
d)Driving rules
• Require photo identification at all facilities before cargo is tendered
• Equip all drivers with cell phones or use of a two way radio
• Monitor communication from a base operation
e)Facilities
• Require adequate lighting around the loading/unloading areas and parking lots
• Establish fencing or other barriers to prevent unauthorized entry
• Utilize gate and automated yard locks
• Deploy automated fire, burglar and video cameras systems
• Provide security personnel, or a central station monitored alarm system, subject to periodic audit by carrier personnel or authorized agents
Preparation and prevention can mean the difference between cargo arriving safely at its destination or ending up in the hands of thieves. Take time to understand the risks and protect your business.
1 FreightWatch International, 2009 Global Cargo Theft Summary Report, FreightWatch International February 11, 2009.
2 California Highway Patrol, Commercial Vehicle Section, Cargo Theft Interdiction Program,
http://www.chp.ca.gov/programs/ctip.html, 2009.
3 Federal Bureau of Investigation, CARGO THEFT'S HIGH COST Thieves Stealing Billions Annually
Wednesday, December 9, 2009
Contingent Auto Liability 101- a trucking insurance sales opportunity
If you are not writing Contingent Auto Liability and Contingent Cargo Coverage for Truck Brokers, you are missing an important sales and service opportunity for your trucking clients.
Truck Brokers
Truck brokers are licensed by the Federal Motor Carrier Safety Administration. They do not operate trucks and merely serve as an intermediary between the shipper and the trucker. In essence, they arrange or "place" loads for a shipper with truckers wanting to haul freight. Since truckers may not always have freight for a return trip or "backhaul" arranged, they often call a truck broker find a shipment to haul to make sure they log as few non-revenue producing miles as possible.
A truck broker helps the trucking community have greater utilization and profitability. Since a truck broker is essence a middleman, the trucker ends up getting less revenue per mile than they would have had they arranged for the transportation of freight directly with the shipper.
For that reason, truckers try to utilize truck brokers as little as possible. However, they recognize that truck brokers have a ready source of freight shipments that the truckers wouldn't obtain on their own and operating with a reduced revenue is better than returning home without freight and revenue, otherwise known as "deadheading."
Truckers With Brokerage Authority
Many truckers have their own brokerage operations. Why? On occasion, truckers will find that they have a shipment to one destination or "headhaul" that is profitably priced, however, they are not able to find any suitable freight to carry back for their "backhaul."
Rather than send one of their own trucks out to the boondocks and deadhead back without a paying load or strand the driver and truck there for several days while trying to arrange a profitable backhaul, some truckers, in their capacity as a freight broker, will offer the load to another trucker who is better situated to handle the shipment and grateful for the business.
Risk Exposures
The freight broker arranges the shipment of the cargo by naming the trucker on the bill of lading. The responsibility for providing auto liability coverage and cargo coverage rests upon the trucker. In compliance with regulations, the trucker is required to have certain minimum amounts of insurance in-force. The broker typically makes certain that the auto liability is in-force and at the minimum required limit by obtaining a certificate of insurance. Similarly, the broker verifies that the limit of trucker's cargo coverage is adequate to cover the value of the load being transported.
Coverage
Contingent Auto Liability coverage provides indemnity and optional defense to a truck broker for third-party liability claims. Contingent Cargo coverage provides indemnity and defense to a truck broker for third-party cargo claims. An example of where coverage applies is a case where the broker relies upon a certificate of insurance for a trucker to be valid and it turns out to be bogus- or the trucker is out of business ( actual claim). A claim ensues and the truck broker is brought into the fracas. The contingent policy provides for indemnity and optional defense.
Most insurers do not want to write this coverage and product scarcity leaves the truck broker exposed, not to mention a potential errors and omissions exposure for the insurance agent.
GTU Offers Contingent Auto Liability and/or Contingent Cargo Coverage
We have three facilities for the contingent auto liability and five facilities for the contingent cargo. We also write the GL, E & O and contents Coverages are specifically designed for the truck brokers and truckers with brokerage authority. All facilities are A rated.
Consider your clients' needs and examine your book of business and see which accounts have brokerage operations. Review your prospects and see who has brokerage authority but have no coverage. A sales and service opportunity becomes available and you can demonstrate your risk management abilities to your prospects and clients.
Truck Brokers
Truck brokers are licensed by the Federal Motor Carrier Safety Administration. They do not operate trucks and merely serve as an intermediary between the shipper and the trucker. In essence, they arrange or "place" loads for a shipper with truckers wanting to haul freight. Since truckers may not always have freight for a return trip or "backhaul" arranged, they often call a truck broker find a shipment to haul to make sure they log as few non-revenue producing miles as possible.
A truck broker helps the trucking community have greater utilization and profitability. Since a truck broker is essence a middleman, the trucker ends up getting less revenue per mile than they would have had they arranged for the transportation of freight directly with the shipper.
For that reason, truckers try to utilize truck brokers as little as possible. However, they recognize that truck brokers have a ready source of freight shipments that the truckers wouldn't obtain on their own and operating with a reduced revenue is better than returning home without freight and revenue, otherwise known as "deadheading."
Truckers With Brokerage Authority
Many truckers have their own brokerage operations. Why? On occasion, truckers will find that they have a shipment to one destination or "headhaul" that is profitably priced, however, they are not able to find any suitable freight to carry back for their "backhaul."
Rather than send one of their own trucks out to the boondocks and deadhead back without a paying load or strand the driver and truck there for several days while trying to arrange a profitable backhaul, some truckers, in their capacity as a freight broker, will offer the load to another trucker who is better situated to handle the shipment and grateful for the business.
Risk Exposures
The freight broker arranges the shipment of the cargo by naming the trucker on the bill of lading. The responsibility for providing auto liability coverage and cargo coverage rests upon the trucker. In compliance with regulations, the trucker is required to have certain minimum amounts of insurance in-force. The broker typically makes certain that the auto liability is in-force and at the minimum required limit by obtaining a certificate of insurance. Similarly, the broker verifies that the limit of trucker's cargo coverage is adequate to cover the value of the load being transported.
Coverage
Contingent Auto Liability coverage provides indemnity and optional defense to a truck broker for third-party liability claims. Contingent Cargo coverage provides indemnity and defense to a truck broker for third-party cargo claims. An example of where coverage applies is a case where the broker relies upon a certificate of insurance for a trucker to be valid and it turns out to be bogus- or the trucker is out of business ( actual claim). A claim ensues and the truck broker is brought into the fracas. The contingent policy provides for indemnity and optional defense.
Most insurers do not want to write this coverage and product scarcity leaves the truck broker exposed, not to mention a potential errors and omissions exposure for the insurance agent.
GTU Offers Contingent Auto Liability and/or Contingent Cargo Coverage
We have three facilities for the contingent auto liability and five facilities for the contingent cargo. We also write the GL, E & O and contents Coverages are specifically designed for the truck brokers and truckers with brokerage authority. All facilities are A rated.
Consider your clients' needs and examine your book of business and see which accounts have brokerage operations. Review your prospects and see who has brokerage authority but have no coverage. A sales and service opportunity becomes available and you can demonstrate your risk management abilities to your prospects and clients.
Monday, December 7, 2009
Truck Insurance Pricing Barometer- December 2009
Most transportation insurance rates in the third quarter were decreasing as marketplace competition has increased, according to a brokerage firm survey.
The NIP Group Inc. in Woodbridge, N.J., said that was the finding of its Transportation Insurance Pricing Survey (TIPS), which contacted transportation insurance brokers, wholesalers and underwriters involved with “thousands of account placements.”
Although survey respondents have seen fewer new entrants into the transportation marketplace than last quarter, “the overall view on the direction of rates is grim,” NIP reported.
The firm said, “This is evidenced by the fact that the number of respondents reporting rate decreases has gone up since last quarter across all account sizes. Similarly, the number of rate increases being reported has abated.”
Richard Augustyn, NIP chief executive officer, said survey results indicate that the market has reversed direction and is softer now compared to last quarter. “This change in direction is not what we were expecting based on last quarter’s results. We will continue to monitor TIPS results to see how this plays out during the key January renewal period.”
The survey measured premium changes across ten different transportation segments, including:
• Trucking Operations Intermodal Carriers
• Messenger/Courier Services Ambulance/Paratransit
• School Bus Contractors Bulk Transportation
• Airport Ground Transportation Charter/Tour Bus Operators
• Specialized Carriers & Riggers Limousine Services
Nearly all segments have experienced rate decreases over the past quarter, with bulk transportation seeing somewhat better results.
For that segment 34.78 percent reported no change in premiums, and 8.7 percent said they were up by 1-to-10 percent. Another 34.78 percent said they were down 1-to-10 percent, 8.7 percent said they were down 10-to-20 percent, and 13.04 said premiums were down 20-to-30 percent.
Respondents who found prices soft or softer totaled 53.66 percent, and 45.06 percent found “more” or “many more” insurers were writing insurance for the transportation sector.
The NIP Group Inc. in Woodbridge, N.J., said that was the finding of its Transportation Insurance Pricing Survey (TIPS), which contacted transportation insurance brokers, wholesalers and underwriters involved with “thousands of account placements.”
Although survey respondents have seen fewer new entrants into the transportation marketplace than last quarter, “the overall view on the direction of rates is grim,” NIP reported.
The firm said, “This is evidenced by the fact that the number of respondents reporting rate decreases has gone up since last quarter across all account sizes. Similarly, the number of rate increases being reported has abated.”
Richard Augustyn, NIP chief executive officer, said survey results indicate that the market has reversed direction and is softer now compared to last quarter. “This change in direction is not what we were expecting based on last quarter’s results. We will continue to monitor TIPS results to see how this plays out during the key January renewal period.”
The survey measured premium changes across ten different transportation segments, including:
• Trucking Operations Intermodal Carriers
• Messenger/Courier Services Ambulance/Paratransit
• School Bus Contractors Bulk Transportation
• Airport Ground Transportation Charter/Tour Bus Operators
• Specialized Carriers & Riggers Limousine Services
Nearly all segments have experienced rate decreases over the past quarter, with bulk transportation seeing somewhat better results.
For that segment 34.78 percent reported no change in premiums, and 8.7 percent said they were up by 1-to-10 percent. Another 34.78 percent said they were down 1-to-10 percent, 8.7 percent said they were down 10-to-20 percent, and 13.04 said premiums were down 20-to-30 percent.
Respondents who found prices soft or softer totaled 53.66 percent, and 45.06 percent found “more” or “many more” insurers were writing insurance for the transportation sector.
Wednesday, December 2, 2009
More on CargoNet
More information has come out about what exactly CargoNet will do which is a joint venture between ISO and the National Insurance Crime Bureau
From an article in National Underwriter.
Insurance Industry Tackles Cargo Theft
ISO and the National Insurance Crime Bureau (NICB) announced today their intent to create a national information sharing system to combat cargo crime. By networking existing databases and adding secure reporting and analytic functions, the new system will enable more efficient, accurate, and timely sharing of cargo-theft information between theft victims, their insurers, and law enforcement.
Cargo theft is a multibillion-dollar economic drain that exploits existing gaps in the nation’s information-sharing framework. When theft victims are unable to provide timely and accurate information concerning their losses, it hampers law enforcement’s ability to conduct an effective investigation. Aside from the immediate loss of merchandise, cargo theft affects insurers and their policyholders through added costs that are ultimately borne by consumers.
Even more troubling are the indirect costs of cargo theft through supply-chain interruption, which can jeopardize product safety when goods are taken from a controlled environment and resold to an unsuspecting public.
For the first time, a nationally coordinated data-sharing system is being built to take into account the needs of insurers, law enforcement, transportation companies, manufacturers, retailers, and their many agents and service providers. The core of the network is a new database called CargoNetTM, which will be launched in early 2010. The network will also encompass training and investigative support for law enforcement, as well as theft prevention services and analytics.
Vincent Cialdella, ISO senior vice president, explained, “ISO’s track record of building and managing sophisticated and secure systems to share sensitive loss and crime data is ideally suited to building CargoNetTM. We are greatly encouraged by the strong support we are receiving from leading cargo insurers. This initiative would not be possible without it. We are also encouraged by discussions we have had with transportation companies, manufacturers, and retailers, given the crucial role they play in this initiative.”
Joe Wehrle, president and chief executive officer of NICB, added, “This is a critical step in the plan that the industry and law enforcement mapped out in November 2006, when the National Cargo Theft Task Force recommended the development of intelligence databases and information sharing. Working with our members and law enforcement, NICB has been making progress against cargo theft on many fronts. We have recovered stolen cargo, developed intelligence, and dissolved organized groups behind the thefts. If CargoNet were in place today, I’m sure we’d be seeing a lot more recoveries, and we’d be making thieves think twice about stealing these loads.”
From an article in National Underwriter.
Insurance Industry Tackles Cargo Theft
ISO and the National Insurance Crime Bureau (NICB) announced today their intent to create a national information sharing system to combat cargo crime. By networking existing databases and adding secure reporting and analytic functions, the new system will enable more efficient, accurate, and timely sharing of cargo-theft information between theft victims, their insurers, and law enforcement.
Cargo theft is a multibillion-dollar economic drain that exploits existing gaps in the nation’s information-sharing framework. When theft victims are unable to provide timely and accurate information concerning their losses, it hampers law enforcement’s ability to conduct an effective investigation. Aside from the immediate loss of merchandise, cargo theft affects insurers and their policyholders through added costs that are ultimately borne by consumers.
Even more troubling are the indirect costs of cargo theft through supply-chain interruption, which can jeopardize product safety when goods are taken from a controlled environment and resold to an unsuspecting public.
For the first time, a nationally coordinated data-sharing system is being built to take into account the needs of insurers, law enforcement, transportation companies, manufacturers, retailers, and their many agents and service providers. The core of the network is a new database called CargoNetTM, which will be launched in early 2010. The network will also encompass training and investigative support for law enforcement, as well as theft prevention services and analytics.
Vincent Cialdella, ISO senior vice president, explained, “ISO’s track record of building and managing sophisticated and secure systems to share sensitive loss and crime data is ideally suited to building CargoNetTM. We are greatly encouraged by the strong support we are receiving from leading cargo insurers. This initiative would not be possible without it. We are also encouraged by discussions we have had with transportation companies, manufacturers, and retailers, given the crucial role they play in this initiative.”
Joe Wehrle, president and chief executive officer of NICB, added, “This is a critical step in the plan that the industry and law enforcement mapped out in November 2006, when the National Cargo Theft Task Force recommended the development of intelligence databases and information sharing. Working with our members and law enforcement, NICB has been making progress against cargo theft on many fronts. We have recovered stolen cargo, developed intelligence, and dissolved organized groups behind the thefts. If CargoNet were in place today, I’m sure we’d be seeing a lot more recoveries, and we’d be making thieves think twice about stealing these loads.”
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