It’s a major problem that many Americans have never heard of—cargo theft. The FBI defines it as the criminal taking of any cargo, including goods, money or baggage, and it can have a significant financial impact on both a company and the broader U.S. economy. Companies like CargoNet offer solutions to the cargo theft issue.
Ryan Shepherd, general manager of CargoNet, a Verisk business, spoke to RewardExpert. He said companies need to start taking cargo theft seriously, now. “Any assumption that your company is safe simply because you’ve never had a theft incident is a mistake that can end up costing you,” he said.
There’s no doubt that the theft of precious cargo can wreak havoc on a company’s financial situation. And the fallout is not restricted to the value of the particular item stolen. “Cargo theft can be extremely damaging financially when you consider all the factors that can affect a company, such as lost time on the road, wages, damaged equipment, replacement cost for damaged equipment, increased insurance premiums or claims,” said Shepherd.
“Beyond that, you must factor in indirect costs that can affect the company down the road due to reputational risk that may lead to lost loads and the weakening of client relationships.” A CargoNet report found that losses totaled nearly $90 million in 2017.
Ten Times the Value
How big of a financial hit are we talking for an individual company? According to Shepherd, a company may have to add an additional $2 million in sales revenue just to offset a $200 thousand cargo loss.
“This is due to many factors, such as the cost to re-import via air freight an expedited replacement order, pay duties and value-added taxes, fuel, repacking, loss of consumer confidence, and loss of sale due to empty shelves,” Shepherd said.
The CargoNet Advantage
The financial cost of cargo theft is crystal clear. So how can companies best protect themselves? CargoNet offers what’s billed as a mulitlayered solution.
“A layered approach is often the best way for a company to reduce cargo theft. There’s not one singular path a company can take to protect itself in every situation, so combining solutions and having overlapping protocols should put your company in the best position to reduce cargo theft,” said Shepherd.
In addition, Shepherd pointed out that data analytics can also play a significant role in cutting the risk of theft. Analytics can measure such things as driver vetting and route risk analysis, and it can even point to certain routes that would require armed security escorts.
By becoming a client of CargoNet, companies get the following benefits: route risk analysis, cargo theft trend analytics, location risk, prevention training, an extensive law enforcement communication platform and, should a theft occur, cargo theft recovery assistance.
While other companies offer such products, Shepherd points out that CargoNet stands out for the following reasons:
- Extensive law enforcement connections extend from local, county and municipal agencies up to the largest federal agencies in North America.
- Unrivaled connection to the insurance underwriters and carriers that underwrite cargo policies.
- Due to the relationship with their parent company, Verisk Analytics, and the tremendous amount of resources and expertise that come with being associated with such a large data company, CargoNet have a deep understanding of data science, big data and the internal structures and safeguards that need consideration when they’re trusted with a client’s information.
- Their deeper data is vetted by analysts and is more robust.
The Recovery Process
Even with robust protection, thefts do happen. As their website states, ‘Cargo at rest is cargo at risk.’ If a theft happens, CargoNet works to help with recovery. That includes working with law enforcement, communication timely information and providing investigative support and information.
For more information, or to find out if CargoNet is right for your business, check out cargonet.com.