Cargo Security Should Not be Scary

Kevin Anderson Cargo Liability, Contracts, Transportation

As Halloween approaches, a truly scary pattern has emerged in the news: the new found boldness/audacity/stupidity of thieves.  For instance, two brothers in Pennsylvania recently stole an entire bridge (50 feet by 20 feet) and tried to sell it for scrap.  The trucking industry has also been hit hard.  FreightWatch reported that cargo thefts in the third quarter of 2011 rose markedly.  It is important that carriers take steps to prevent cargo thefts, and to limit their liability if they become targets of cargo thieves.

When it comes to preventing cargo theft, nothing is a replacement for a little common sense.

  • Whenever possible, drivers should park in well lit and secure locations.  FreightWatch reported that 79% of thefts in the third quarter were from unsecured parking lots, while only 6% occurred at secured parking lots.
  • Make it a company policy that drivers must shut off the engine, lock the doors and take the key with them when they park.  A thief will not think twice about breaking a window to jump in the cab of a truck that is left running.
  • No one should talk about the cargo with anyone outside of your company.  According to FreightWatch, food/drinks, electronics and building/industrial materials were the most targeted product types accounting for 54% of all cargo thefts.  Don’t advertise the fact that you are hauling a high value or desirable load.

Technology can also be a great way to prevent cargo thefts.  From GPS, to RFID, Air Cuff Locks, Glad Hand Locks, and King Pin Locks etc., today there is an abundance of products available to help ensure the security of your cargo.  There is even a new product that can immobilize a truck remotely if it is stolen.  However, if your drivers fail to use or do not know how to use the security technology available to them, it becomes worthless.  Make sure that you have the training, policies, and procedures in place to ensure your drivers use all of the technology available to them to keep your cargo secure.

Regardless of the precautions you take, you may find yourself the victim of a cargo theft.  In these cases it is important to ensure that you have taken the proper precautionary steps to limit your liability.  Prudent carriers will limit their liability through a tariff, shipper-carrier or broker-carrier contract.  Without a valid limitation of liability through one of these documents, the carrier may be held liable for the full actual loss by virtue of the Carmack Amendment.  It should be noted that cargo insurance limitations or exemptions do not limit a carrier’s liability under the Carmack Amendment.  If a carrier only has $100,000 in cargo insurance, but the cargo stolen is valued at $500,000, the carrier will be held liable for the excess $400,000, unless the carrier’s liability is limited through a valid tariff, shipper-carrier or broker-carrier contract.  The most effective precaution a carrier can take is to validly limit is liability contractually prior to hauling any load.

Shippers must also take proper precautions.  First and foremost, shippers need to know what carrier is going to be hauling a load and only tender the load to that carrier.  Too often shippers load carriers without confirming their credentials.  This can often lead to a shipment being driven off by a thief pretending to be a legitimate carrier.

Shippers also must know the value of their cargo and ensure that the shipment is properly insured.  If a carrier has contractually limited its liability, the shipper should declare the value of the shipment and ensure the carrier has the wherewithal to cover the maximum possible loss or obtains appropriate insurance to cover the full value of the specific shipment.  Most often the shipper will need to pay additional freight charges in order to compensate the carrier for the additional liability assumed by the carrier.  For its own financial well being, a shipper should not tender a shipment to a carrier that has limited its liability below the full actual value of the load.  If the shipper does and the shipment is stolen, the shipper will be the one taking the financial hit.

While thieves are getting bolder, there are easy common sense steps that carriers and shippers can take to ensure the security of their cargo and limit their liability if they are the target of a cargo thief.