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The Quiet Threat

March 23, 2006 

By Fred Burton, Vice President for Counterterrorism and Corporate Security, Stratfor, a leading security consulting intelligence agency.

U.S. President George W. Bush recently signed into law a bill that authorizes the U.S. attorney general to assign a unique criminal code to thefts of commercial cargo, distinguishing this crime from other kinds of theft. The move, which is intended to aid coordination of federal and state efforts to address the crime, underscores the significant impact that cargo theft has within the U.S. economy and in corporate supply chains.

Cargo theft has persisted as a quiet threat to manufacturers and other businesses for years. Trucking companies have been lobbying Congress for at least 30 years to impose tougher penalties for the crime, which is closely linked in many areas to organized-crime groups. Lobbyists also have asked for cargo theft to be listed in the Uniform Crime Reporting System, which would allow for better tracking of trends. Until recently, however, industry's efforts went largely unheeded; because it generally is not a violent crime (particularly in the United States), there has been little media attention, and the federal government since 9/11 has focused on terrorist threats, foreign policy and jihadist groups.

With the federal government's new emphasis on transportation security -- including port security -- and studies concerning the connections between organized crime groups and terrorism, the trucking industry has been better able to get Washington's attention. The American Trucking Association succeeded in getting cargo theft included in the language of the USA PATRIOT Act defining activities that support terrorism. Perhaps even more significant is the legislation signed by Bush on March 9; giving cargo theft its own criminal code should make it easier for law enforcement agencies in different states to share information about cargo theft incidents -- which is essential, since by definition the crime involves transport.

Statistically speaking, the magnitude of cargo theft is considerable. FreightWatch International Group, a cargo logistics security company, estimates that cargo crimes worldwide result in as much as $50 billion each year in direct merchandise losses. In the United States, that number is estimated at $25 billion annually -- rising to $60 billion once all associated costs, such as replacement of stolen goods and higher insurance premiums, are factored in. Certain kinds of shipments -- especially small or high-value items -- are particularly at risk: Computer products, such as laptops or flat-screen monitors, other types of consumer electronics, cigarettes and designer apparel are the most frequently targeted. The value of a single shipment of computers or electronic items is estimated to be between $2 million and $8 million.

On the whole, state and municipal governments have been more proactive in dealing with cargo theft than the federal government has, even though the crime clearly involves interstate commerce. In Florida, a task force known as the Tactical Operations Multi-agency Cargo Anti-Theft Squad (TOMCATS) has been set up to coordinate the efforts of municipal, state and federal agencies in the Miami-Dade area. The Los Angeles Police Department has a Commercial Auto-Theft Section to deal with the problem, and Pennsylvania, Texas, Illinois and Nevada have similar task forces.

Cargo theft long has been closely associated with organized criminal groups. Though there historically have been links to Italian mafia groups, the crime in the United States now is carried out mainly by Latin American criminal gangs. Activity is dominated by Cuban groups in the south, clustering around Miami, and by Ecuadorians in the northeast, concentrating operations around the Port of New York.

Security studies have revealed a great deal about the tactics used by crime gangs and can help companies to protect their goods.

For instance, gangs have been known to steal items from warehouses, often using stolen tractor-trailers to cart them away; but much more frequently they hijack shipments that are already in transit. Such "prepackaged" thefts are highly convenient and can be carried out with amazing speed -- trailers can be unloaded in a matter of minutes -- once preoperational surveillance and intelligence collection has been conducted. Techniques used in the past included gang members getting work as temporary employees at trucking companies -- allowing them to observe distribution routes and routines -- or simply positioning themselves in such a way to strike up conversation with workers.

With information about shipping routes and schedules, a two- or three-man team might then follow behind a cargo shipment -- in some known cases, for distances up to 500 miles -- while waiting for the driver to stop, usually at a truck stop. At that point, the entire rig might be stolen, or the trailer unhitched while the driver is distracted (prostitutes are sometimes employed by gangs for this purpose). At other times, gangs steal only the items they want and then reseal the trailer, making their getaway long before an inventory of the rig's cargo can be conducted and the theft discovered.

Once stolen, the cargo may be transferred to another trailer, often with a forged bill of lading -- or a list of the truck's contents, where it is coming from and where it is going --and then driven to Miami or across the border to Mexico, and from there to other destinations around the world. Known destinations for electronics and other goods stolen within the United States include Brazil, Venezuela, Colombia, the Dominican Republic and Argentina. The destinations not only reflect points of origin and nodes for the organized crime groups carrying out the thefts, but also can overlap with high-volume international trade routes, which helps to mask the crime. For instance, stolen computers can be intermingled with legitimate computer shipments on their way to South America; U.S. Customs officials would have little reason -- and fewer means -- to check such outbound shipments for contraband or other infractions.

Although cargo theft has been tied to growing trends of violence in some parts of the world, including Mexico and Britain, there has been a pronounced lack of violence associated with the trend in the United States. Gang members are careful to avoid direct encounters with drivers or security guards, and the lack of violence keeps them from attracting the attention of law enforcement. However, as with any criminal activity, the potential for escalating violence exists.

In the United States, Georgia has become a center of gravity for cargo theft. There are two reasons for this: One is the high volume of trucks that pass through the state -- through the hub of Atlanta en route to major ports like Savannah and Miami. The other is that police in Florida have taken a tough stance on cargo crime (establishing units like the TOMCATS to focus on it) during the past two years, prompting Cuban gangs to move their operations farther to the north.

There are countermeasures that can help to reduce the risks of cargo theft. Countersurveillance along key shipping routes (such as the I-95 corridor running through Georgia and to Miami) is one consideration; drivers can be trained to watch for signs of surveillance by would-be thieves both at a shipment's point of origin and along the route. Route surveillance also can help companies to formulate threat assessments, identifying areas where cargo theft has been a problem and then working up alternative routes or improving security measures for shipments that must pass through such points.

Technology also is helpful, but it is not a complete solution to the problem. In recent years, companies have begun tracking their shipments by mounting Global Positioning System (GPS) units onto tractor-trailer rigs. The GPS devices allow monitors to know where the truck stops and how long it stays in that location. The theory is that if drivers make only authorized stops, there are fewer opportunities along the route for cargo theft gangs to swing into action. While that certainly is true, it addresses only thefts involving heists of the actual truck or trailer. And gangs now have begun to counter GPS measures by offloading stolen cargo into different trailers as soon as possible, a technique at which they have become very skilled. GPS tracking equipment, which uses line-of-sight technology, may or may not continue to function if devices are planted in the merchandise packages themselves.

Because cargo theft often requires someone on the inside to keep criminal gangs informed about shipping routes and schedules, one of the most important countermeasures for companies is vetting of drivers and shipping staff -- not to mention the defensive surveillance techniques drivers can use en route. These measures can be costly, but so are the higher insurance rates that carriers increasingly are levying when they are not employed. Cargo theft ultimately hurts corporate profit margins and increases prices for consumers, creating a lose-lose situation for the economy.

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