My friend Jeff Trainor who runs a great tranportation insurance link on Linked In showed me interesting facts about what an insured is required to have as deemed by the Federal Motor Carrier Safety Administration ( FMCSA). This analysis was developed by a most capable attorney named Steven M. Gursten.
Helping truck accident lawyers better understand preservation of supporting documents strengthens a trucker's case.. Many commercial truck crash cases begin with investigation of the driver. For pre-deposition or interrogatory analysis, there are several other ways to “fact check” the accuracy of a driver’s daily log book. Receipts for food and gas accumulated throughout the day, bills of lading, toll receipts, “EZ Pass”-type toll collection system records, and on-board GPS tracking print-outs are just a few examples of the verifiable footprints a driver leaves behind when he’s on the road. A savvy truck accident lawyer will be able to determine whether it was feasible for the driver to actually make the trip he documented in his daily log. A trucker should make sure he has that information for his defense.
Federal truck law 49 CFR § 395.8(k)(1) requires motor carriers to retain all supporting discovery documents at their principal places of business for a period of six months from the date of receipt. Under the regs, “supporting documents” are defined as motor carrier records, maintained in the ordinary course of business, used by the motor carrier to verify the information recorded on the driver’s daily log.” Essentially, any documents directly related to the trucking company’s operation, which are retained by the truck in connection with the operation of its transportation business, are considered “supporting documents.”
Failure to preserve these supporting documents for six months after driver submission is considered a “critical” offense under Appendix B to § 385. In discovery, some carriers do not preserve their drivers’ daily logs and supporting documents, A carrier that does not preserve this data carrier is violating federal law.
If the carrier did have such supporting documents in its possession, and it’s later found that the driver violated federal driving limits, the case against the carrier itself will be significantly strengthened.
Under 49 CFR § 395.8(k)(1), the carrier has the burden to investigate and audit its driver’s hours of service through supporting documents. Simply ignoring false logs presented by its drivers will not absolve a carrier from liability.
If a trucker asks you what they can do to mitigate damages after a loss, give them this information.
Thursday, February 25, 2010
Tranportation Pricing Survey Confirms Continued Soft Marketplace
It is neat to see surveys on transportation insurance pricing. NIP Group is a market leader in the survey business. I am challenged to believe the survey results are anything but conjectural- in that the exposure basis is not reflected in the survey and you can bet exposures have lessened ( i.e. less trucks on the road). The survey also does not measure the relativity of loss experience either.
Even so I think you will find the report helpful below:
Transportation Insurance Pricing Survey (TIPS™) Results Released,
Rate Decreases Intensify as Stubborn Soft Market Persists
February 26th, 2010 (Woodbridge, NJ) — NIP Group, Inc. published the results of the Transportation Insurance
Pricing Survey (TIPS™) for the fourth quarter of 2009. Used to benchmark changes in availability and rates in the
transportation insurance market, the survey was issued to leading transportation insurance brokers, wholesalers
and underwriters representing thousands of account placements.
The majority of survey participants have responded that they believe the market is softening and that rate
decreases have intensified especially in Auto Liability since the prior quarter. Respondents also suggested that
there appears to be more insurance carriers chasing premium in the transportation insurance market.
Participants report that rate decreases have picked up across most policy types; Workers Comp being the one
clear exception. Rates in Auto Liability have been hit especially hard, as 30% more respondents believed that there
were significant rate decreases in 4Q09 vs. 3Q09, and the number of reported rate increases also fell sharply.
The survey also measures 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
The survey results indicate that rate decreases have picked up in most segments; Charter/Tour, School Bus and
Limo being the exceptions. The rate decreases are especially pronounced in the Bulk Transport segment.
“Since the last quarter rates continue to fall and are intensifying in Auto Liability the lead line of business in the
Transportation market based on the latest TIPS™ results,” said Richard Augustyn, CEO of NIP Group, Inc. “With
the exception of the Public Auto segment fierce competition for premium volume is driving rates lower. We will
continue to monitor TIPS™ results to see how much lower rates will fall given that the momentum behind this trend
appears very strong.”
Even so I think you will find the report helpful below:
Transportation Insurance Pricing Survey (TIPS™) Results Released,
Rate Decreases Intensify as Stubborn Soft Market Persists
February 26th, 2010 (Woodbridge, NJ) — NIP Group, Inc. published the results of the Transportation Insurance
Pricing Survey (TIPS™) for the fourth quarter of 2009. Used to benchmark changes in availability and rates in the
transportation insurance market, the survey was issued to leading transportation insurance brokers, wholesalers
and underwriters representing thousands of account placements.
The majority of survey participants have responded that they believe the market is softening and that rate
decreases have intensified especially in Auto Liability since the prior quarter. Respondents also suggested that
there appears to be more insurance carriers chasing premium in the transportation insurance market.
Participants report that rate decreases have picked up across most policy types; Workers Comp being the one
clear exception. Rates in Auto Liability have been hit especially hard, as 30% more respondents believed that there
were significant rate decreases in 4Q09 vs. 3Q09, and the number of reported rate increases also fell sharply.
The survey also measures 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
The survey results indicate that rate decreases have picked up in most segments; Charter/Tour, School Bus and
Limo being the exceptions. The rate decreases are especially pronounced in the Bulk Transport segment.
“Since the last quarter rates continue to fall and are intensifying in Auto Liability the lead line of business in the
Transportation market based on the latest TIPS™ results,” said Richard Augustyn, CEO of NIP Group, Inc. “With
the exception of the Public Auto segment fierce competition for premium volume is driving rates lower. We will
continue to monitor TIPS™ results to see how much lower rates will fall given that the momentum behind this trend
appears very strong.”
Monday, February 22, 2010
State of Transportation Insurance- February 2010
The Song Remains the Same...
The transportation insurance business is still very soft. It continues to be a buyer's marketplace due to some of the following factors:
1) Capacity- If you have been following the stock market, insurance companies have released stellar results. While a great deal of the stock price increases are a direct result of investment income turnaround, many gains have been made through better product management ( aka better loss ratios) than previously. Since there have been virtually no catastrophes on US shores, capacity is pervasive. With more insurance companies writing the business with excess capacity, lower pricing is pervasive. I would argue that not allowing AIG to fail has hurt a great many in the insurance business.
2) Distribution- In today's insurance economy, all markets can be accessed, therefore, any type of exclusive control by agents and MGA's is gone. This has created a marketing paranoia in the marketplace. Specifically, you could have a happy and satisfied insured, agent, MGA, and insurance company- and due to market forces either the insured, agent or MGA shop individually, or even worse all together, the business. Distribution is forcing downward pressure on pricing continually. And there is no end in sight. There is a lack of reassurance in the marketplace due to the fact that there is "that company" that could beat us.
3) Renewals- The industry by and large is a renewal industry. That is, there are very few carriers smartly writing continuous until canceled policies. That way the pricing does not change. Regrettably even those that offer these pay plans are not incentivizing more business to be on these pay plans. So you are left with policy expiration dates and renewals. With each renewal, the accounts are paying less. This is a business that simply does not get it and the product needs to be improved.
4) Less Exposure- In this blog, I have released numbers about the reduction of trucks on the road. Those trucks are not showing up on policies. There is less exposure. Most insurance carriers are not measuring the pricing change relative to the exposure base. If you had to ask an insurance carrier what the exposure attrition on their book of business is on an annual basis, I am not sure they could or would ever tell you. So when you are budgeting for premiums which each agent, MGA and company is doing so, there is a continued shortfall.
5) Technology- On a seperate subject that should have mataphorical significance, I applied to 3 colleges when I was of age ( I was lucky to get in one- Vanderbilt). Parathetically my daughter due to something called the Common App, applied to 12 colleges. There has been no measurement taken in the marketplace relative to how today we market business than when we did in yesteryear- and there are huge differences. I can tell you the upshot is not pretty. Agents used to market to one or two places. Now they market to 10. The diseconomy of being in the quote business rather than the writing business has hit us all. Technology was viewed as a savior of the business. It has only made the business more frenetic.
6) Commoditization- What is the difference between Great West, Northland, Maxum, Canal, Zurich, Sentry, Cherokee, Star, Lancer, Carolina Casualty, Continental Western, RLI, CNA, Ace, Hallmark, and others? Most buyers and sellers of insurance could not tell you- and that is the problem. If there is no differentiation ( and there is a difference) then all you are left with is price. The companies need to prove themselves as innovators and I only know of two companies that have done so.
Does this mean we all need to just go out there and shoot ourselves? No. But it suggests that if the only measurement tool is going to be reduced pricing, we should all plan on losing more than we gain. So it is up to all of us to reinvest in your relationship with your insured, your agent, your MGA, your insurance company, and prove your value. We have to assess oursleves constantly with humility that, even as subject matter experts hopefully extoling value, we are beatable daily. So a new paradigm is in order.
Failure to do same will result in the status quo. That is, if you are going to do business on the same basis, expect the same results. Let's all figure out a way to stop it. In my over 25 years at GTU, I would like to not chock it off to perseverance and insanity...
The transportation insurance business is still very soft. It continues to be a buyer's marketplace due to some of the following factors:
1) Capacity- If you have been following the stock market, insurance companies have released stellar results. While a great deal of the stock price increases are a direct result of investment income turnaround, many gains have been made through better product management ( aka better loss ratios) than previously. Since there have been virtually no catastrophes on US shores, capacity is pervasive. With more insurance companies writing the business with excess capacity, lower pricing is pervasive. I would argue that not allowing AIG to fail has hurt a great many in the insurance business.
2) Distribution- In today's insurance economy, all markets can be accessed, therefore, any type of exclusive control by agents and MGA's is gone. This has created a marketing paranoia in the marketplace. Specifically, you could have a happy and satisfied insured, agent, MGA, and insurance company- and due to market forces either the insured, agent or MGA shop individually, or even worse all together, the business. Distribution is forcing downward pressure on pricing continually. And there is no end in sight. There is a lack of reassurance in the marketplace due to the fact that there is "that company" that could beat us.
3) Renewals- The industry by and large is a renewal industry. That is, there are very few carriers smartly writing continuous until canceled policies. That way the pricing does not change. Regrettably even those that offer these pay plans are not incentivizing more business to be on these pay plans. So you are left with policy expiration dates and renewals. With each renewal, the accounts are paying less. This is a business that simply does not get it and the product needs to be improved.
4) Less Exposure- In this blog, I have released numbers about the reduction of trucks on the road. Those trucks are not showing up on policies. There is less exposure. Most insurance carriers are not measuring the pricing change relative to the exposure base. If you had to ask an insurance carrier what the exposure attrition on their book of business is on an annual basis, I am not sure they could or would ever tell you. So when you are budgeting for premiums which each agent, MGA and company is doing so, there is a continued shortfall.
5) Technology- On a seperate subject that should have mataphorical significance, I applied to 3 colleges when I was of age ( I was lucky to get in one- Vanderbilt). Parathetically my daughter due to something called the Common App, applied to 12 colleges. There has been no measurement taken in the marketplace relative to how today we market business than when we did in yesteryear- and there are huge differences. I can tell you the upshot is not pretty. Agents used to market to one or two places. Now they market to 10. The diseconomy of being in the quote business rather than the writing business has hit us all. Technology was viewed as a savior of the business. It has only made the business more frenetic.
6) Commoditization- What is the difference between Great West, Northland, Maxum, Canal, Zurich, Sentry, Cherokee, Star, Lancer, Carolina Casualty, Continental Western, RLI, CNA, Ace, Hallmark, and others? Most buyers and sellers of insurance could not tell you- and that is the problem. If there is no differentiation ( and there is a difference) then all you are left with is price. The companies need to prove themselves as innovators and I only know of two companies that have done so.
Does this mean we all need to just go out there and shoot ourselves? No. But it suggests that if the only measurement tool is going to be reduced pricing, we should all plan on losing more than we gain. So it is up to all of us to reinvest in your relationship with your insured, your agent, your MGA, your insurance company, and prove your value. We have to assess oursleves constantly with humility that, even as subject matter experts hopefully extoling value, we are beatable daily. So a new paradigm is in order.
Failure to do same will result in the status quo. That is, if you are going to do business on the same basis, expect the same results. Let's all figure out a way to stop it. In my over 25 years at GTU, I would like to not chock it off to perseverance and insanity...
Tuesday, February 16, 2010
The Answer is: $2750
The question?
What is the fine that will be levied on drivers of large commercial vehicles and buses if they violate a new US government ban on texting while driving behind the wheel? This is consistent with the federal government fine for drivers who text while driving federal government vehicles.
It makes you wonder if there is a way to determine if someone was texting at a certain time where a loss occurred and if there is a way of proving that. Look for some attorneys to figure this out.
What has not been discussed is that this is just another way a driver of a vehicle can be determined negligent. As we don't see there being less ways for drivers to be negligent, one would think this would increase loss cost.
What is the fine that will be levied on drivers of large commercial vehicles and buses if they violate a new US government ban on texting while driving behind the wheel? This is consistent with the federal government fine for drivers who text while driving federal government vehicles.
It makes you wonder if there is a way to determine if someone was texting at a certain time where a loss occurred and if there is a way of proving that. Look for some attorneys to figure this out.
What has not been discussed is that this is just another way a driver of a vehicle can be determined negligent. As we don't see there being less ways for drivers to be negligent, one would think this would increase loss cost.
Monday, February 8, 2010
What A Trucker Should Do to Mitigate Refrigeration Cargo Claims Before They Happen and Dealing with Truck Brokers
From Big Truck TV- Hank Seaton
I have gotten to be a fan of Big Truck TV and they bring up items from time to time with issues that relate to trucking insurance. Noted transportation attorney Hank Seaton has given a great analysis of what a trucker should do in his negotations with brokers and shippers relative to mitigating refrigeration breakdown claims per the dialogue below:
"How can we protect a trucker's interests when we’re dealing with brokers ( note this is relative to all truckers- not just reefer accounts)
There are really several things that a carrier should do and a lot of them relate to establishing business practices in a rules tariff. One of the items is to put into your rules circular that you will maintain constant temperature as required by the Bill of Lading in Transit and that your recorder off of the truck will be prima facia evidence that the temperature has been maintained because otherwise if the shipment gets to destination and it’s out of temperature, there’s going to be a presumption that you’re the one that damaged it in transit. However, if you have in your rules tariff that no, if we have a recorder that shows we maintained temperature, then it overcomes that presumption.
A second item – and I do think this is of utmost importance – is that truckload carriers limit their liability by tariff to the extent of their insurance. You’ll need to tell your shipper up front in the contract that your maximum limit for cargo loss or damage is $X and if the value of the shipment is higher than that, you’ll go out and buy additional insurance for that particular shipment but you will want to negotiate a special rate to cover the cost of the additional insurance.
Are there any little tricks a trucker should know about when dealing with refrigerated product?
In the refrigerated area there are some particular tricks of the trade you should be made aware of. Number one, does the trailer need to be pre-chilled because a reefer only maintains temperature, it’s not capable of lowering the temperature. If you go in with a reefer that has an ambient temperature of 90 degrees and you put refrigerated product in it, you’re going to have a problem – you need to pre-chill the trailer before loading the product. Recording the temperature on the load confirmation sheet, recording the nature of the product, knowing the susceptibility of the product to temperature damage are all very important issues.
What’s the deal with offsets and why is it important that our broker doesn’t use them?
A very important issue when dealing with a broker is the dreaded off-set. Often times a broker will tell the shipper, “Don’t worry about cargo claims because I’ll take care of them for you. I’ll accept responsibility for the cargo claims.” But the way the broker accepts that responsibility is to say, “You’re right Mr. Shipper, you’re owed the money, I’ll just take it out of the carrier’s receivables.” That’s called an off-set and it’s very important that a motor carrier get a broker to agree to pay the freight charges and to litigate the cargo claim, and not simply off-set them. Far too many small refrigerated carriers are run out of business by the off-set. If they’re factoring their receivables, they’re pledging to the factor that that receivable is due, owing and uncontested and then all of a sudden the factor gets a notice declaring the shipper isn’t paying that $120,000, they have a cargo claim – at that point, the factor says his client is damaged goods, and he basically owns and forecloses on him. So that is really a spiral of death and the off-set is something that you really need to address up front.
As far as protecting a trucker, what should we be aware of when dealing with new brokers?
Some of the things that you should do when dealing with brokers are, number one, check out their bona fides, see how long they’ve been in business, see how they pay their freight charges, and use a credit referencing service to determine their viability. Number two, do not surrender recourse to the shipper; there will be a tendency on the part of the broker to say, “Look only to me for payment of the freight charges.” You want to take the position that the broker is the agent of the shipper and that you can ultimately go to the shipper for payment. Number three, see how they deal with the offset. Provide that Carmack governs; it’s not a question of indemnity, it’s not a question of they can pay any claim they want to and take it out of your hide – you have a right to be involved in the mitigation of the loss. Those are the three major issues when dealing with brokers."
I have gotten to be a fan of Big Truck TV and they bring up items from time to time with issues that relate to trucking insurance. Noted transportation attorney Hank Seaton has given a great analysis of what a trucker should do in his negotations with brokers and shippers relative to mitigating refrigeration breakdown claims per the dialogue below:
"How can we protect a trucker's interests when we’re dealing with brokers ( note this is relative to all truckers- not just reefer accounts)
There are really several things that a carrier should do and a lot of them relate to establishing business practices in a rules tariff. One of the items is to put into your rules circular that you will maintain constant temperature as required by the Bill of Lading in Transit and that your recorder off of the truck will be prima facia evidence that the temperature has been maintained because otherwise if the shipment gets to destination and it’s out of temperature, there’s going to be a presumption that you’re the one that damaged it in transit. However, if you have in your rules tariff that no, if we have a recorder that shows we maintained temperature, then it overcomes that presumption.
A second item – and I do think this is of utmost importance – is that truckload carriers limit their liability by tariff to the extent of their insurance. You’ll need to tell your shipper up front in the contract that your maximum limit for cargo loss or damage is $X and if the value of the shipment is higher than that, you’ll go out and buy additional insurance for that particular shipment but you will want to negotiate a special rate to cover the cost of the additional insurance.
Are there any little tricks a trucker should know about when dealing with refrigerated product?
In the refrigerated area there are some particular tricks of the trade you should be made aware of. Number one, does the trailer need to be pre-chilled because a reefer only maintains temperature, it’s not capable of lowering the temperature. If you go in with a reefer that has an ambient temperature of 90 degrees and you put refrigerated product in it, you’re going to have a problem – you need to pre-chill the trailer before loading the product. Recording the temperature on the load confirmation sheet, recording the nature of the product, knowing the susceptibility of the product to temperature damage are all very important issues.
What’s the deal with offsets and why is it important that our broker doesn’t use them?
A very important issue when dealing with a broker is the dreaded off-set. Often times a broker will tell the shipper, “Don’t worry about cargo claims because I’ll take care of them for you. I’ll accept responsibility for the cargo claims.” But the way the broker accepts that responsibility is to say, “You’re right Mr. Shipper, you’re owed the money, I’ll just take it out of the carrier’s receivables.” That’s called an off-set and it’s very important that a motor carrier get a broker to agree to pay the freight charges and to litigate the cargo claim, and not simply off-set them. Far too many small refrigerated carriers are run out of business by the off-set. If they’re factoring their receivables, they’re pledging to the factor that that receivable is due, owing and uncontested and then all of a sudden the factor gets a notice declaring the shipper isn’t paying that $120,000, they have a cargo claim – at that point, the factor says his client is damaged goods, and he basically owns and forecloses on him. So that is really a spiral of death and the off-set is something that you really need to address up front.
As far as protecting a trucker, what should we be aware of when dealing with new brokers?
Some of the things that you should do when dealing with brokers are, number one, check out their bona fides, see how long they’ve been in business, see how they pay their freight charges, and use a credit referencing service to determine their viability. Number two, do not surrender recourse to the shipper; there will be a tendency on the part of the broker to say, “Look only to me for payment of the freight charges.” You want to take the position that the broker is the agent of the shipper and that you can ultimately go to the shipper for payment. Number three, see how they deal with the offset. Provide that Carmack governs; it’s not a question of indemnity, it’s not a question of they can pay any claim they want to and take it out of your hide – you have a right to be involved in the mitigation of the loss. Those are the three major issues when dealing with brokers."
Monday, February 1, 2010
Heists Targeting Truckers on Rise
From Dow Jones News Services
Thieves are swiping tractor-trailers filled with goods, triggering a spike in cargo theft on the nation's highways.
Over five days last month, an 18-wheeler carrying 710 cartons of consumer electronics was stolen from a Pennsylvania rest stop, a 53-foot-long rig packed with 43,000 pounds of paper was ripped off in Ottawa, Ill., and a 40-foot-long truck filled with reclining armchairs went missing in Atlanta.
Truckloads containing $487 million of goods were stolen in the U.S. in 2009, a 67% increase over the $290 million worth of products swiped a year earlier. Thieves stole 859 truckloads in 2009, up from 767 loads in 2008 and 672 in 2007, according to FreightWatch International, an Austin, Texas-based supply-chain security firm that maintains a database of thefts that several government agencies, including the Federal Bureau of Investigation, look to for trends.
Drivers at a truck stop in Nebraska in December. In many recent cargo robberies, thieves have taken whole rigs when drivers stepped away.
"In the past two months, we've just seen such an increase that it's to the point where criminals are just wreaking havoc," said Sandor Lengyel, a detective sergeant and squad leader in New Jersey State Police's cargo-theft unit. "They'll pretty much steal anything." Cargo thieves ripped off $28 million in goods in New Jersey in 2009, an 87% spike from the $15 million stolen in 2008, he said.
Law-enforcement authorities in Illinois, California and Pennsylvania are among several agencies and industry groups also reporting a spike.
Chubb Corp., a major insurer based in Warren, N.J., said that its own insurance claims and data from other sources show 725 cargo thefts in 2009, up 6.6% from 680 in 2008, and up 23% from 592 cargo thefts recorded for 2007. Chubb estimates the 2009thefts amounted to $435 million of products.
A truck found in Florida, after being stolen in North Carolina with a load of cigarettes. The latest wave of thefts is different from a run of tractor-trailer hijackings that occurred in the 1960s, when organized-crime rings forced drivers out at gunpoint and took their trucks. According to industry officials and police, the current thefts are generally nonviolent and typically happen at rest stops when the driver is away from the truck and eating or showering.
While organized-crime rings may be involved, "we are seeing a lot more amateurs get into this," said Sgt. Sid Belk, of the California Highway Patrol. Cargo bandits made off with $29 million of goods in 2009 in Southern California, up 67% from $17.4 million in 2008, according to the highway patrol.
Thieves "sit and wait and watch, and when the driver goes in to take a shower, that's when they steal the trucks," said Special Agent John Cannon, head of the Georgia's Bureau of Investigation's cargo-theft squad, which was launched in 2009. He believes that thefts of consumer goods in particular are "directly related to the economy; people are stealing things that they can get rid of quickly, and consumers are looking for a deal."
Thieves often know what cargo a truck is hauling because they will follow trucks from a plant, according to police.
Thieves drive the whole tractor-trailer away or hitch up to an unattended trailer, as truckers sometimes leave a trailer in a drop lot and drive off in just the tractor for an errand. Typically when stolen, the tractor portion is found close to the site of the theft. The empty trailer is usually found miles away, abandoned, and often repainted or reworked in an effort to disguise the stolen truck.
Cargo theft represents a big concern and cost for trucking and other freight haulers, says J.J. Coughlin, chairman of the SouthWest Transportation Security Council, a nonprofit industry group that represents more than 200 freight-shipping companies. The council estimates that the average loss in each theft is $350,000—and that is just the load inside the truck. "Sometimes you lose that too," he said of the tractor-trailer. Typically, though, the tractor-trailer is found miles away. "We find that thieves target the loads," he said.
Mr. Coughlin said that in an effort to combat the problem, freight shippers have been meeting more with police departments. The shippers have also been pushing owners of truck stops and drop lots to provide better security. "That is easier said than done," he said.
Also, in the past two years, the freight shippers have banded together to try to come up with solutions, such as sharing information about what kinds of loads are most stolen so that when those goods are shipped, everyone in the supply chain can be alerted to pay extra attention.
California, Florida, Texas, Georgia, Illinois and New Jersey are the top states for number of cargo thefts, according to FreightWatch. The crooks are targeting such things as electronics, food and beverages, clothing, pharmaceuticals and cigarettes.
The thefts can also threaten consumer safety. In February 2009, an unattended refrigerated truck loaded with $11 million of insulin made by Danish drug concern Novo Nordisk A/S was ripped off in Conover, N.C., while the driver was in a truck stop, according to Sgt. Shane Moore, of the Conover police department.
After the theft, the Food and Drug Administration and Novo Nordisk put out a news release, alerted the health-care industry, and advised pharmacies to inspect inventories, said Sean Clements, a company spokesman. Still, some of the stolen vials wound up in the hands of diabetics, several of whom showed up at medical centers in Kentucky and Texas over the summer sickened because the insulin was inactive, said Karen Riley, an FDA spokeswoman.
The FDA's Office of Criminal Investigations is looking into how the drugs were given to patients. Mr. Clements said the stolen insulin did not get to patients through Novo Nordisk's normal distribution. He said the "safety of our patients is of paramount concern," and that the company is working with investigators, and has taken steps to improve security.
Electronics were the target of a thief who struck near midnight on Jan. 13 at a minimart in Hazleton, Pa., two hours north of Philadelphia. A trucker hauling $500,000 of electronics to an Amazon.com Inc. distribution center left his trailer parked there while he made another delivery elsewhere, said Trooper Charles Everdale III, of the Pennsylvania's State Police auto-theft task force. When the trucker returned the trailer was gone, the trooper said. He said the partially empty trailer turned up in recent days in Palm Beach, Fla. Amazon declined to comment.
In the pharmaceutical industry, "most everyone has had some type of cargo theft" with a spike in "high-value loads" stolen over the last two years, said Chuck Forsaith, the director of supply-chain security for a unit of Purdue Pharma LP, a privately held pharmaceutical company in Stamford, Conn., and also director of the Pharma Cargo Security Coalition, an industry group
Thieves are swiping tractor-trailers filled with goods, triggering a spike in cargo theft on the nation's highways.
Over five days last month, an 18-wheeler carrying 710 cartons of consumer electronics was stolen from a Pennsylvania rest stop, a 53-foot-long rig packed with 43,000 pounds of paper was ripped off in Ottawa, Ill., and a 40-foot-long truck filled with reclining armchairs went missing in Atlanta.
Truckloads containing $487 million of goods were stolen in the U.S. in 2009, a 67% increase over the $290 million worth of products swiped a year earlier. Thieves stole 859 truckloads in 2009, up from 767 loads in 2008 and 672 in 2007, according to FreightWatch International, an Austin, Texas-based supply-chain security firm that maintains a database of thefts that several government agencies, including the Federal Bureau of Investigation, look to for trends.
Drivers at a truck stop in Nebraska in December. In many recent cargo robberies, thieves have taken whole rigs when drivers stepped away.
"In the past two months, we've just seen such an increase that it's to the point where criminals are just wreaking havoc," said Sandor Lengyel, a detective sergeant and squad leader in New Jersey State Police's cargo-theft unit. "They'll pretty much steal anything." Cargo thieves ripped off $28 million in goods in New Jersey in 2009, an 87% spike from the $15 million stolen in 2008, he said.
Law-enforcement authorities in Illinois, California and Pennsylvania are among several agencies and industry groups also reporting a spike.
Chubb Corp., a major insurer based in Warren, N.J., said that its own insurance claims and data from other sources show 725 cargo thefts in 2009, up 6.6% from 680 in 2008, and up 23% from 592 cargo thefts recorded for 2007. Chubb estimates the 2009thefts amounted to $435 million of products.
A truck found in Florida, after being stolen in North Carolina with a load of cigarettes. The latest wave of thefts is different from a run of tractor-trailer hijackings that occurred in the 1960s, when organized-crime rings forced drivers out at gunpoint and took their trucks. According to industry officials and police, the current thefts are generally nonviolent and typically happen at rest stops when the driver is away from the truck and eating or showering.
While organized-crime rings may be involved, "we are seeing a lot more amateurs get into this," said Sgt. Sid Belk, of the California Highway Patrol. Cargo bandits made off with $29 million of goods in 2009 in Southern California, up 67% from $17.4 million in 2008, according to the highway patrol.
Thieves "sit and wait and watch, and when the driver goes in to take a shower, that's when they steal the trucks," said Special Agent John Cannon, head of the Georgia's Bureau of Investigation's cargo-theft squad, which was launched in 2009. He believes that thefts of consumer goods in particular are "directly related to the economy; people are stealing things that they can get rid of quickly, and consumers are looking for a deal."
Thieves often know what cargo a truck is hauling because they will follow trucks from a plant, according to police.
Thieves drive the whole tractor-trailer away or hitch up to an unattended trailer, as truckers sometimes leave a trailer in a drop lot and drive off in just the tractor for an errand. Typically when stolen, the tractor portion is found close to the site of the theft. The empty trailer is usually found miles away, abandoned, and often repainted or reworked in an effort to disguise the stolen truck.
Cargo theft represents a big concern and cost for trucking and other freight haulers, says J.J. Coughlin, chairman of the SouthWest Transportation Security Council, a nonprofit industry group that represents more than 200 freight-shipping companies. The council estimates that the average loss in each theft is $350,000—and that is just the load inside the truck. "Sometimes you lose that too," he said of the tractor-trailer. Typically, though, the tractor-trailer is found miles away. "We find that thieves target the loads," he said.
Mr. Coughlin said that in an effort to combat the problem, freight shippers have been meeting more with police departments. The shippers have also been pushing owners of truck stops and drop lots to provide better security. "That is easier said than done," he said.
Also, in the past two years, the freight shippers have banded together to try to come up with solutions, such as sharing information about what kinds of loads are most stolen so that when those goods are shipped, everyone in the supply chain can be alerted to pay extra attention.
California, Florida, Texas, Georgia, Illinois and New Jersey are the top states for number of cargo thefts, according to FreightWatch. The crooks are targeting such things as electronics, food and beverages, clothing, pharmaceuticals and cigarettes.
The thefts can also threaten consumer safety. In February 2009, an unattended refrigerated truck loaded with $11 million of insulin made by Danish drug concern Novo Nordisk A/S was ripped off in Conover, N.C., while the driver was in a truck stop, according to Sgt. Shane Moore, of the Conover police department.
After the theft, the Food and Drug Administration and Novo Nordisk put out a news release, alerted the health-care industry, and advised pharmacies to inspect inventories, said Sean Clements, a company spokesman. Still, some of the stolen vials wound up in the hands of diabetics, several of whom showed up at medical centers in Kentucky and Texas over the summer sickened because the insulin was inactive, said Karen Riley, an FDA spokeswoman.
The FDA's Office of Criminal Investigations is looking into how the drugs were given to patients. Mr. Clements said the stolen insulin did not get to patients through Novo Nordisk's normal distribution. He said the "safety of our patients is of paramount concern," and that the company is working with investigators, and has taken steps to improve security.
Electronics were the target of a thief who struck near midnight on Jan. 13 at a minimart in Hazleton, Pa., two hours north of Philadelphia. A trucker hauling $500,000 of electronics to an Amazon.com Inc. distribution center left his trailer parked there while he made another delivery elsewhere, said Trooper Charles Everdale III, of the Pennsylvania's State Police auto-theft task force. When the trucker returned the trailer was gone, the trooper said. He said the partially empty trailer turned up in recent days in Palm Beach, Fla. Amazon declined to comment.
In the pharmaceutical industry, "most everyone has had some type of cargo theft" with a spike in "high-value loads" stolen over the last two years, said Chuck Forsaith, the director of supply-chain security for a unit of Purdue Pharma LP, a privately held pharmaceutical company in Stamford, Conn., and also director of the Pharma Cargo Security Coalition, an industry group
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